HR 472 IHCommentsClose CommentsPermalink

To reform the Troubled Assets Relief Program of the Secretary of the Treasury by establishing the Family Foreclosure Rescue Corporation modeled on the successful Home Owner’s Loan Corporation, and to purchase and insure home mortgage loans for the purposes of providing relief to homeowners, restoring stability to the financial system, preventing further harm to the economy, and protecting taxpayers.CommentsClose CommentsPermalink

January 13, 2009CommentsClose CommentsPermalink

Mr. BACA introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink

To reform the Troubled Assets Relief Program of the Secretary of the Treasury by establishing the Family Foreclosure Rescue Corporation modeled on the successful Home Owner’s Loan Corporation, and to purchase and insure home mortgage loans for the purposes of providing relief to homeowners, restoring stability to the financial system, preventing further harm to the economy, and protecting taxpayers.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Family Foreclosure Rescue Corporation Act of 2009’.CommentsClose CommentsPermalink

SEC. 2. PURPOSES.

The purposes of this Act are--CommentsClose CommentsPermalink





(1) to provide immediate authority and facilities that the Secretary of the Treasury can use to assist struggling homeowners in order to restore liquidity and stability to the financial system of the United States; andCommentsClose CommentsPermalink





(2) to ensure that such authority and such facilities are used in a manner that--CommentsClose CommentsPermalink





(A) protects America’s family equity including home values, college funds, retirement accounts, and life savings;CommentsClose CommentsPermalink





(B) preserves homeownership and promotes jobs and economic growth;CommentsClose CommentsPermalink





(C) maximizes overall returns to the taxpayers of the United States; andCommentsClose CommentsPermalink





(D) provides public accountability for the exercise of such authority.CommentsClose CommentsPermalink

SEC. 3. AMENDMENTS TO TARP.

(a) Family Foreclosure Rescue Corporation Program Under TARP- Title I of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211) is amended--CommentsClose CommentsPermalink





(1) by inserting after the title designation and heading the following:CommentsClose CommentsPermalink

‘Subtitle A--Program for Purchases of Troubled Assets’; andCommentsClose CommentsPermalink

(2) by adding at the end the following new subtitle:CommentsClose CommentsPermalink

‘Subtitle B--Family Foreclosure Rescue Corporation ProgramCommentsClose CommentsPermalink

‘SEC. 150. AUTHORITY UNDER TARP PROGRAM.

‘The authority of the Secretary to take any action under this title includes the authority to take the actions authorized under this subtitle and to use amounts made available under subtitle A under the provisions of this subtitle.CommentsClose CommentsPermalink

‘SEC. 151. PURCHASES OF HOME MORTGAGES.

‘(a) Offices; Authority-CommentsClose CommentsPermalink





‘(1) AUTHORITY- The Secretary is authorized to establish a Family Foreclosure Rescue Corporation program (or ‘FFRC program’) to purchase, and to make and fund commitments to purchase, home mortgage loans from any financial institution, on such terms and conditions as are determined by the Secretary, and in accordance with this subtitle and the policies and procedures developed and published by the Secretary.CommentsClose CommentsPermalink





‘(2) COMMENCEMENT OF PROGRAM- Establishment of the policies and procedures and other similar administrative requirements imposed on the Secretary by this subtitle are not intended to delay the commencement of the FFRC program.CommentsClose CommentsPermalink





‘(3) ESTABLISHMENT OF THE FAMILY FORECLOSURE RESCUE CORPORATION- The Family Foreclosure Rescue Corporation is hereby established as an independent office within the Treasury, which office shall be headed by Chairman, who shall report to the Secretary, and shall be appointed by the President, by and with the advice and consent of the Senate, except that an interim Chairman may serve pending confirmation by the Senate.CommentsClose CommentsPermalink





‘(b) Consultation- In exercising the authority under this section, the Secretary shall consult with the Board of Governors of the Federal Reserve System, the Corporation, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, and the Secretary of Housing and Urban Development.CommentsClose CommentsPermalink





‘(c) Necessary Actions- The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this subtitle, including, without limitation, the following:CommentsClose CommentsPermalink





‘(1) The Secretary shall have direct hiring authority with respect to the appointment of employees to administer this subtitle.CommentsClose CommentsPermalink





‘(2) Entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code.CommentsClose CommentsPermalink





‘(3) Designating financial institutions, the Corporation, the Board, the Federal Housing Administration, the Federal National Mortgage Association, and the Federal Home Loan Mortgage Corporation, as financial agents of the Federal Government for purposes of implementing the provisions of this subtitle, and such institutions shall perform all such reasonable duties related to this subtitle as financial agents of the Federal Government as may be requiredCommentsClose CommentsPermalink





‘(4) In order to provide the Secretary with the flexibility to manage home mortgages in a manner designed to minimize cost to the taxpayers, establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase, hold, guarantee and sell home mortgages and to issue obligations.CommentsClose CommentsPermalink





‘(5) Issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities or purposes of this subtitle.CommentsClose CommentsPermalink





‘(6) Entering into indemnity agreements with servicers or trustees that would indemnify the servicer or trustees for legal liability to investors arising from sale, disposition or modification of home mortgages if--CommentsClose CommentsPermalink





‘(A) the servicer or trustee has acted reasonably in selling, disposing of or modifying the mortgage; andCommentsClose CommentsPermalink





‘(B) the servicer or trustee has acted in accordance with a request for sale, modification or disposition from the Secretary or his designee under the FFRC program established by this subtitle.CommentsClose CommentsPermalink





‘(7) Developing a program, with respect to first-lien home mortgage loans purchased by the Secretary, through which the security interests of second lien-holders with respect to the residential property securing the first-lien home mortgage loan purchased by the Secretary, are extinguished in exchange for partial payment.CommentsClose CommentsPermalink





‘(d) Program Guidelines- Before the earlier of the end of the 2-business-day period beginning on the date of the first purchase of home mortgages pursuant to the authority under this section or the end of the 45-day period beginning on the date of enactment of this subtitle, the Secretary shall publish program guidelines, including the following:CommentsClose CommentsPermalink





‘(1) Mechanisms for purchasing home mortgages in exchange for cash, Treasury securities or other assets.CommentsClose CommentsPermalink





‘(2) Methods for pricing and valuing home mortgages.CommentsClose CommentsPermalink





‘(3) Procedures for selecting home mortgage asset managers.CommentsClose CommentsPermalink





‘(4) Criteria for identifying home mortgages for purchase. Such criteria shall include (A) loan-to-value ratio, (B) debt-to-income ratio; and (C) such other criteria as the Secretary may prescribe.CommentsClose CommentsPermalink





‘(e) Preventing Unjust Enrichment- In making purchases under the authority of this subtitle, the Secretary shall take such steps as may be necessary to prevent unjust enrichment of financial institutions and home owners participating in a program established under this subtitle.CommentsClose CommentsPermalink

‘SEC. 152. INSURANCE OF HOME MORTGAGES.

‘(a) Authority-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Secretary shall establish a program to guarantee home mortgages consistent with section 159(b) and the purposes of this subtitle.CommentsClose CommentsPermalink





‘(2) GUARANTEES- In establishing any program under this subsection, the Secretary shall develop guarantees of home mortgages and the associated premiums for such guarantees. Such guarantees and premiums may be determined by category or class of the home mortgages to be guaranteed.CommentsClose CommentsPermalink





‘(3) EXTENT OF GUARANTEE- The Secretary may guarantee the timely payment of principal of, and interest on, home mortgages in amounts not to exceed 100 percent of such payments. Such guarantee may be on such terms and conditions as are determined by the Secretary, provided that such terms and conditions are consistent with section 159(b) and the purposes of this subtitle.CommentsClose CommentsPermalink





‘(b) Reports- Not later than 90 days after the date of enactment of this subtitle, the Secretary shall report to the appropriate committees of Congress on the program established under subsection (a).CommentsClose CommentsPermalink





‘(c) Premiums-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Secretary shall collect premiums from any financial institution and any borrower participating in the program established under subsection (a). Such premiums shall be in an amount that the Secretary determines necessary to meet the purposes of this subtitle and to provide sufficient reserves pursuant to paragraph (3).CommentsClose CommentsPermalink





‘(2) AUTHORITY TO BASE PREMIUMS ON PRODUCT RISK- In establishing any premium under paragraph (1), the Secretary may provide for variations in such rates according to the credit risks and other risks associated with the particular home mortgage that is being guaranteed. The Secretary shall publish the methodology for setting the premium for a class of home mortgages together with an explanation of the appropriateness of the class of home mortgages for participation the program established under this section. The methodology shall ensure that the premium is consistent with paragraph (3).CommentsClose CommentsPermalink





‘(3) MINIMUM LEVEL- The premiums referred to in paragraph (1) shall be set by the Secretary at a level necessary to create reserves sufficient to meet anticipated claims, based on an actuarial analysis, and to ensure that taxpayers are fully protected, unless the Secretary determines that a lower premium combined with other protections for taxpayers, including but not limited to provisions for shared equity mortgages would more fully meet the purposes of this subtitle.CommentsClose CommentsPermalink





‘(d) Home Mortgage Insurance Financing Fund-CommentsClose CommentsPermalink





‘(1) DEPOSITS- The Secretary shall deposit fees collected under this section into the Fund established under paragraph (2)CommentsClose CommentsPermalink





‘(2) ESTABLISHMENT- There is established a Home Mortgage Insurance Financing Fund within the Family Foreclosure Rescue Corporation that shall consist of the amounts collected pursuant to paragraph (1), and any balance in such fund shall be invested by the Secretary in United States Treasury securities, or kept in cash on hand or on deposit, as necessary.CommentsClose CommentsPermalink





‘(3) PAYMENTS FROM FUND- The Secretary shall make payments from amounts deposited in the Fund and from other sums authorized by this subtitle to fulfill obligations of the guarantees provided to financial institutions under subsection (a).CommentsClose CommentsPermalink





‘(4) TERMINATION OF FUND- The Fund shall be terminated by the period ending one year after the repayment of the last home mortgage loan insured or guaranteed by the Secretary and any amounts remaining in the Fund shall be deposited as provided in section 156(e).CommentsClose CommentsPermalink

‘SEC. 153. CONSIDERATIONS.

‘In exercising the authorities granted in this subtitle, the Secretary shall take into consideration--CommentsClose CommentsPermalink





‘(1) providing mechanisms for families to keep their homes and to stabilize communities;CommentsClose CommentsPermalink





‘(2) ensuring stability and preventing disruption to financial market in order to limit the impact of the financial crisis on the economy and protect American jobs, savings, and retirement security;CommentsClose CommentsPermalink





‘(3) protecting the interests of taxpayers by maximizing overall returns and minimizing the impact on the national debt;CommentsClose CommentsPermalink





‘(4) determining the most efficient use of funds under this subtitle;CommentsClose CommentsPermalink





‘(5) ensuring that all financial institutions are eligible to participate in the program, without discrimination based on size, geography, form of organization, or the size, type, and number of assets eligible for purchase under this subtitle;CommentsClose CommentsPermalink





‘(6) paying due attention to financial institutions, including those serving low- and moderate-income populations and other underserved communities, and that have assets less than $1,000,000,000;CommentsClose CommentsPermalink





‘(7) stabilizing United States public instrumentalities, such as counties and cities, which may have suffered significant increased costs or losses in the current market turmoil;CommentsClose CommentsPermalink





‘(8) protecting the retirement security of Americans by purchasing home mortgages by or on behalf of an eligible retirement plan described in clause (iii), (iv), (v), or (vi) of section 402(c)(8)(B) of the Internal Revenue Code of 1986, except that such authority shall not extend to any compensation arrangements subject to section 409A of such Code; andCommentsClose CommentsPermalink





‘(9) purchasing home mortgage loans, residential other real estate owned by financial institutions and mortgages on multifamily properties.CommentsClose CommentsPermalink

‘SEC. 154. FFRC OVERSIGHT BOARD.

‘(a) Establishment- There is established the Family Foreclosure Rescue Corporation Oversight Board, which shall be responsible for--CommentsClose CommentsPermalink





‘(1) reviewing the exercise of authority under a program developed in accordance with this subtitle, includingCommentsClose CommentsPermalink





‘(A) policies implemented by the Secretary and the Family Foreclosure Rescue Corporation created under sections 151 and 152, including the appointment of financial agents, the designation of asset classes to be purchased, and plans for the structure of vehicles used to purchase home mortgages; andCommentsClose CommentsPermalink





‘(B) the effect of such actions in assisting American families in preserving home ownership, stabilizing financial markets, and protecting taxpayers;CommentsClose CommentsPermalink





‘(2) making recommendations, as appropriate, to the Secretary regarding use of the authority under this subtitle; andCommentsClose CommentsPermalink





‘(3) reporting any suspected fraud, misrepresentation, or malfeasance to the Special Inspector General for the FFRC Program or the Attorney General of the United States, consistent with section 535(b) of title 28, United States Code.CommentsClose CommentsPermalink





‘(b) Membership- The Oversight Board shall be comprised of--CommentsClose CommentsPermalink





‘(1) the Chairman of the Board of Governors of the Federal Reserve System;CommentsClose CommentsPermalink





‘(2) the Secretary;CommentsClose CommentsPermalink





‘(3) the Director of the Federal Home Finance Agency;CommentsClose CommentsPermalink





‘(4) the Chairman of the Securities Exchange Commission;CommentsClose CommentsPermalink





‘(5) the Chairman of the Corporation; andCommentsClose CommentsPermalink





‘(6) the Secretary of Housing and Urban Development.CommentsClose CommentsPermalink





‘(c) Chairperson- The chairperson of the Oversight Board shall be the Chairman of the Corporation.CommentsClose CommentsPermalink





‘(d) Meetings- The Oversight Board shall meet 2 weeks after the first exercise of the purchase authority of the Secretary under this subtitle, and at least monthly thereafter.CommentsClose CommentsPermalink





‘(e) Additional Authorities- In addition to responsibilities described in subsection (a), the Oversight Board shall have the authority to ensure that the policies implemented the Secretary are--CommentsClose CommentsPermalink





‘(1) in accordance with the purposes of this subtitle;CommentsClose CommentsPermalink





‘(2) in the economic interests of the United States; andCommentsClose CommentsPermalink





‘(3) consistent with protecting taxpayers, in accordance with section 161(a).CommentsClose CommentsPermalink





‘(f) Credit Review Committee- The Oversight Board may appoint a credit review committee for the purpose of evaluating the exercise of the purchase authority provided under this subtitle and the assets acquired through the exercise of such authority, as the Oversight Board determines appropriate.CommentsClose CommentsPermalink





‘(g) Reports- The Oversight Board shall report to the appropriate committees of Congress and the Congressional Oversight Panel established under section 125, semiannually, on the matters described under subsection (a)(1).CommentsClose CommentsPermalink





‘(h) Termination- The Oversight Board, and the authority of the Oversight Board under this section, shall terminate on the expiration of the 15-day period beginning upon the later of--CommentsClose CommentsPermalink





‘(1) the date that the last home mortgage loan acquired by the Secretary under section 151 has been sold or transferred out of the ownership or control of the Federal Government; orCommentsClose CommentsPermalink





‘(2) the date of expiration of the last insurance contract issued under section 152.CommentsClose CommentsPermalink

‘SEC. 155. REPORTS.

‘(a) In General- Before the expiration of the 60-day period beginning on the date of the first exercise of the authority granted in section 151(a), or of the first exercise of the authority granted in section 152, whichever occurs first, and every 30-day period thereafter, the Secretary shall report to the appropriate committees of Congress, with respect to each such period--CommentsClose CommentsPermalink





‘(1) an overview of actions taken by the Secretary, including the factors to be taken in consideration in section 153;CommentsClose CommentsPermalink





‘(2) the actual obligation and expenditure of the funds provided for administrative expenses by section 164 during such period and the expected expenditure of such funds in the subsequent period; andCommentsClose CommentsPermalink





‘(3) a detailed financial statement with respect to the exercise of authority under this subtitle, including--CommentsClose CommentsPermalink





‘(A) all agreements made or renewed;CommentsClose CommentsPermalink





‘(B) all insurance contracts entered into pursuant to section 152;CommentsClose CommentsPermalink





‘(C) all transactions occurring during such period, including the types of parties involved;CommentsClose CommentsPermalink





‘(D) the nature of the assets purchased;CommentsClose CommentsPermalink





‘(E) all projected costs and liabilities;CommentsClose CommentsPermalink





‘(F) operating expenses, including compensation for financial agents;CommentsClose CommentsPermalink





‘(G) the valuation or pricing method used for each transaction; andCommentsClose CommentsPermalink





‘(H) a description of the vehicles established to exercise such authority.CommentsClose CommentsPermalink





‘(b) Tranche Reports to Congress-CommentsClose CommentsPermalink





‘(1) REPORTS- The Secretary shall provide to the appropriate committees of Congress, at the times specified in paragraph (2), a written report, including--CommentsClose CommentsPermalink





‘(A) a description of all of the transactions made during the reporting period;CommentsClose CommentsPermalink





‘(B) a description of the pricing mechanism for the transactions;CommentsClose CommentsPermalink





‘(C) a justification of the price paid for and other financial terms associated with the transactions;CommentsClose CommentsPermalink





‘(D) a description of the impact of the exercise of such authority on the financial system, supported to the extent possible, by specific data;CommentsClose CommentsPermalink





‘(E) a description of challenges that remain in the financial system, including any benchmarks yet to be achieved; andCommentsClose CommentsPermalink





‘(F) an estimate of additional actions under the authority provided under this subtitle that may be necessary to address such challenges.CommentsClose CommentsPermalink





‘(2) TIMING- The report required by this subsection shall be submitted not later than 7 days after the date on which commitments to purchase home mortgages under the authorities provided in this subtitle first reach an aggregate of $50,000,000,000 and not later than 7 days after each $50,000,000,000 interval of such commitments is reached thereafter.CommentsClose CommentsPermalink





‘(c) Sharing of Information- Any report required under this section shall also be submitted to the Congressional Oversight Panel established under section 125.CommentsClose CommentsPermalink





‘(d) Sunset- The reporting requirements under this section shall terminate on the later of--CommentsClose CommentsPermalink





‘(1) the date that the last home mortgage acquired by the Secretary under section101 has been sold or transferred out of the ownership or control of the Federal Government; orCommentsClose CommentsPermalink





‘(2) the date of expiration of the last insurance contract issued under section 152.CommentsClose CommentsPermalink

‘SEC. 156. RIGHTS; MANAGEMENT; SALE OF HOME MORTGAGES; REVENUES AND SALE PROCEEDS.

‘(a) Exercise of Rights- The Secretary may, at any time, exercise any rights received in connection with home mortgages purchased under this subtitleCommentsClose CommentsPermalink





‘(b) Management of Home Mortgages-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Secretary shall have authority to manage home mortgages purchased under this subtitle, including revenues and portfolio risks therefrom.CommentsClose CommentsPermalink





‘(2) In managing home mortgages purchased under the authorities of this subtitle, the Secretary shall implement a systematic plan to maximize loan modifications in order to minimize foreclosures, including by reducing interest rates, writing down principal sums owed, providing guarantees, and other measures.CommentsClose CommentsPermalink





‘(3) With respect to loans not eligible for modification, and with respect to loans that enter into default, the Secretary shall implement a plan to minimize foreclosures, through short sales or by other means, and to reduce negative impacts on communities from foreclosures, short sales or other dispositions, consistent with the purposes of this subtitle.CommentsClose CommentsPermalink





‘(4) With respect to loans modified by the Secretary, the Secretary shall implement a program of shared equity mortgages such that upon any sale or disposition within five years from the date of loan modification any increases in the equity of any home securing a loan modified by the Secretary are shared between the home owner and the Family Foreclosure Rescue Corporation, based upon a schedule to be issued by the Secretary, such schedule to provide for an increasingly smaller share of such equity increase to be payable to the Secretary over that five-year period.CommentsClose CommentsPermalink





‘(c) Sale of Home Mortgages- The Secretary may, at any time, upon terms and conditions and at a price determined by the Secretary, guarantee, sell, or enter into securities loans, repurchase transactions, or other financial transactions in regard to, any home mortgages purchased under this subtitle.CommentsClose CommentsPermalink





‘(d) Proceeds of Sales and Other Revenues- Revenues of, and proceeds from the sale of home mortgages purchased under this subtitle, or from any shared equity home mortgage program established by the Secretary under this subtitle, or from the sale, exercise, or surrender of warrants or senior debt instruments acquired under section 161, and any amounts remaining in the Fund upon its termination, shall be paid into the general fund of the Treasury for reduction of the public debt except as provided in section (e).CommentsClose CommentsPermalink





‘(e) Transfer of a Percentage of Profits-CommentsClose CommentsPermalink





‘(1) DEPOSITS- Not less than 20 percent of any revenues of, and proceeds from the sale of home mortgages purchased under this subtitle, or from any shared equity home mortgage program established by the Secretary under this subtitle, or from the sale, exercise, or surrender of warrants or senior debt instruments acquired under section 161, and not less than 20 percent of any amounts remaining in the Fund upon its termination, shall be deposited as provided in paragraph (2).CommentsClose CommentsPermalink





‘(2) USE OF DEPOSITS- Of the amount referred to in paragraph (1)--CommentsClose CommentsPermalink





‘(A) 65 percent shall be deposited into the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4568);CommentsClose CommentsPermalink





‘(B) 35 percent shall be deposited into the Capital Magnet Fund established under section 1339 of that Act (12 U.S.C. 4569).CommentsClose CommentsPermalink





‘(3) REMAINDER DEPOSITED IN THE TREASURY- All amounts remaining after payments under paragraph (1) shall be paid into the General Fund of the Treasury for reduction of the public debt.CommentsClose CommentsPermalink





‘(f) Application of Sunset to Home Mortgages- The authority of the Secretary to hold, guarantee, sell or dispose of any home mortgage purchased under this subtitle before the termination date in section 165, or to purchase or fund the purchase of a home mortgage under a commitment entered into before the termination date in section 165, is not subject to the provisions of section 165.CommentsClose CommentsPermalink

‘SEC. 157. CONTRACTING PROCEDURES.

‘(a) Streamlined Process- For purposes of this subtitle, the Secretary may waive specific provisions of the Federal Acquisition Regulation upon a determination that urgent and compelling circumstances make compliance with such provisions contrary to the public interest. Any such determination, and the justification for such determination, shall be submitted to the Committees on Oversight and Government Reform and Financial Services of the House of Representatives and the Committees on Homeland Security and Governmental Affairs and Banking, Housing, and Urban Affairs of the Senate within 7 days.CommentsClose CommentsPermalink





‘(b) Additional Contracting Requirements- In any solicitation or contract where the Secretary has, pursuant to subsection (a), waived any provision of the Federal Acquisition Regulation pertaining to minority contracting, the Secretary shall develop and implement standards and procedures to ensure, to the maximum extent practicable, the inclusion and utilization of minorities (as such term is defined in section 1204(c) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note)) and women, and minority and women-owned businesses (as such terms are defined in section 21A(r)(4) of the Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)), in that solicitation or contract, including contracts to asset managers, servicers, property managers, and other service providers or expert consultants.CommentsClose CommentsPermalink





‘(c) Eligibility of FDIC, Board, Federal Housing Administration, Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation- Notwithstanding subsections (a) and (b), the Corporation, Board, Federal Housing Administration, Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation--CommentsClose CommentsPermalink





‘(1) shall be eligible for, and shall be considered in, the selection of financial agents to perform any duty assigned to the Secretary by this subtitle;CommentsClose CommentsPermalink





‘(2) in performing such duties shall report to the Chairman of the Family Foreclosure Rescue Corporation; andCommentsClose CommentsPermalink





‘(3) shall be reimbursed by the Secretary for any services provided.CommentsClose CommentsPermalink

‘SEC. 158. CONFLICTS OF INTEREST.

‘(a) Standards Required- The Secretary shall issue regulations or guidelines necessary to address and manage or to prohibit conflicts of interest that may arise in connection with the administration and execution of the authorities provided under this subtitle, including conflicts arising in--CommentsClose CommentsPermalink





‘(1) the selection or hiring of contractors or advisors, including asset managers;CommentsClose CommentsPermalink





‘(2) the purchase of home mortgages;CommentsClose CommentsPermalink





‘(3) the management of the assets held;CommentsClose CommentsPermalink





‘(4) post-employment restrictions on employees; andCommentsClose CommentsPermalink





‘(5) any other potential conflict of interest, as the Secretary deems necessary or appropriate in the public interest.CommentsClose CommentsPermalink





‘(b) Timing- Regulations or guidelines required by this section shall be issued as soon as practicable after the date of enactment of this subtitle.CommentsClose CommentsPermalink

‘SEC. 159. FORECLOSURE MITIGATION EFFORTS.

‘(a) Residential Mortgage Loan Servicing Standards- To the extent that the Secretary acquires home mortgages, including mortgages securing loans for multifamily housing, the Secretary shall implement a plan within 60 days of enactment of this subtitle that seeks to maximize loan restructuring on a sustainable basis and to minimize foreclosures.CommentsClose CommentsPermalink





‘(b) Loan Guarantees-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Secretary may use loan guarantees and other credit enhancements to facilitate loan modifications, to prevent avoidable foreclosures, and to provide necessary liquidity to home mortgage markets.CommentsClose CommentsPermalink





‘(2) Such loan guarantee authority may be used by the Secretary with respect to any and all classes of home mortgage loans the Secretary has acquired and wishes to sell.CommentsClose CommentsPermalink





‘(3) Such loan guarantee authority may be used by the Secretary with respect to other home mortgage loans not acquired by the Secretary provided that the holder, servicer, or trustee with respect to such home mortgage loan to be guaranteed by the Secretary shall through modification, refinancing, or otherwise write down the principal amount owed and reduce the interest rate charged such that the new loan amount does not exceed 90 percent of the home’s currently and independently appraised value and loan payments to be made by the borrower do not exceed 38 percent of the borrower’s currently documented and verified income.CommentsClose CommentsPermalink





‘(4) The percentage requirements with respect to the result of loan modifications specified in the immediately preceding sentence of paragraph (3) may be altered upon request of the Secretary by unanimous vote of the Oversight Board and upon 60 days notice to the appropriate Committees of Congress.CommentsClose CommentsPermalink





‘(c) Coordination- The Secretary shall coordinate with the Corporation, the Board, the Federal Housing Finance Agency, the Secretary of Housing and Urban Development, and other Federal Government entities that hold assets to attempt to identify opportunities for the acquisition of classes of home mortgages that will improve the ability of the Secretary to improve the loan modification and restructuring process.CommentsClose CommentsPermalink





‘(d) Tenants- The Secretary shall, where permissible, permit bona fide tenants who are current on their rent to remain in their homes under the terms of the lease. In the case of a mortgage on a residential rental property, the plan required under this section shall include protecting Federal, State, and local rental subsidies and protections, and ensuring any modification takes into account the need for operating funds to maintain decent and safe conditions at the property.CommentsClose CommentsPermalink





‘(e) Consent to Reasonable Loan Modification Requests- The Secretary shall consent, where appropriate, and considering net present value to the taxpayer, to reasonable requests for loss mitigation measures, including term extensions, rate reductions, principal write downs, increases in the proportion of loans within a trust or other structure allowed to be modified, or removal of other limitations on modifications.CommentsClose CommentsPermalink

‘SEC. 160. ASSISTANCE TO HOMEOWNERS.

‘(a) Definitions- As used in this section--CommentsClose CommentsPermalink





‘(1) the term ‘Federal property manager’ means--CommentsClose CommentsPermalink





‘(A) the Federal Housing Finance Agency, in its capacity as conservator of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation;CommentsClose CommentsPermalink





‘(B) the Corporation, with respect to residential mortgage loans and mortgage-backed securities held by any bridge depository institution pursuant to section 11(n) of the Federal Deposit Insurance Act (12 U.S.C. 1821(n)); andCommentsClose CommentsPermalink





‘(C) the Board, with respect to any mortgage or mortgage-backed securities or pool of securities held, owned, or controlled by or on behalf of a Federal reserve bank, other than mortgages or securities held, owned, or controlled in connection with open market operations under section 14 of the Federal Reserve Act (12 U.S.C. 353), or as collateral for an advance or discount that is not in default;CommentsClose CommentsPermalink





‘(2) the term ‘consumer’ has the same meaning as in section 103 of the Truth in Lending Act (15 U.S.C. 1602);CommentsClose CommentsPermalink





‘(3) the term ‘insured depository institution’ has the same meaning as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); andCommentsClose CommentsPermalink





‘(4) the term ‘servicer’ has the same meaning as in section 6(i)(2) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(i)(2)).CommentsClose CommentsPermalink





‘(b) Homeowner Assistance by Agencies-CommentsClose CommentsPermalink





‘(1) IN GENERAL- To the extent that the Federal property manager holds, owns, or controls mortgages, mortgage backed securities, and other assets secured by residential real estate, including multifamily housing, the Federal property manager shall implement a systematic plan that seeks to maximize assistance for homeowners and minimize foreclosures, to use its authority to modify mortgage loans held by the Federal property manager, and to provide incentives to the servicers of other mortgage loans to take advantage of the HOPE for Homeowners Program under section 257 of the National Housing Act, the authorities provided under this subtitle, and other available programs to minimize foreclosures.CommentsClose CommentsPermalink





‘(2) MODIFICATIONS- In the case of a residential mortgage loan, modifications made under paragraph (1) may include--CommentsClose CommentsPermalink





‘(A) reduction in interest rates;CommentsClose CommentsPermalink





‘(B) reduction of loan principal; andCommentsClose CommentsPermalink





‘(C) other similar modifications.CommentsClose CommentsPermalink





‘(3) TENANT PROTECTIONS- In the case of mortgages on residential rental properties, modifications made under paragraph (1) shall ensure--CommentsClose CommentsPermalink





‘(A) the continuation of any existing Federal, State, and local rental subsidies and protections; andCommentsClose CommentsPermalink





‘(B) that modifications take into account the need for operating funds to maintain decent and safe conditions at the property.CommentsClose CommentsPermalink





‘(4) TIMING- Each Federal property manager shall develop and begin implementation of the plan required by this subsection not later than 60 days after the date of enactment of this subtitle.CommentsClose CommentsPermalink





‘(5) REPORTS TO CONGRESS- Each Federal property manager shall, 60 days after the date of enactment of this subtitle and every 30 days thereafter, report to Congress specific information on the number and types of loan modifications made and the number of actual foreclosures occurring during the reporting period in accordance with this section.CommentsClose CommentsPermalink





‘(6) CONSULTATION- In developing the plan required by this subsection, the Federal property managers shall consult with one another and, to the extent possible, utilize consistent approaches to the requirements of this subsection.CommentsClose CommentsPermalink





‘(c) Actions With Respect to Servicers- In any case in which a Federal property manager is not the owner of a residential mortgage loan, but holds an interest in obligations or pools of obligations secured by residential mortgage loans, the Federal property manager shall--CommentsClose CommentsPermalink





‘(1) encourage implementation by the loan servicers of loan modifications developed under subsection (b);CommentsClose CommentsPermalink





‘(2) assist in facilitating any such modifications, to the extent possible; andCommentsClose CommentsPermalink





‘(3) encourage loan servicers to make foreclosed properties available for sale to State and local governments at a discount.CommentsClose CommentsPermalink





‘(d) Availability of Foreclosed Properties to State and Localities-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Each Federal property manager shall make available to any State or local government that is receiving emergency assistance under section 2301 of the Foreclosure Prevention Act of 2008 (Division B of Public Law 110-289) for purchase, at a discount, residential properties that it owns through foreclosure in that State or locality, in order to facilitate the sale of such properties and to stabilize neighborhoods affected by foreclosures.CommentsClose CommentsPermalink





‘(2) INFORMATION CLEARINGHOUSE-CommentsClose CommentsPermalink





‘(A) PROVISION OF INFORMATION TO THE SECRETARY- Each Federal property manager shall make available to the Secretary of Housing and Urban Development information on properties available for purchase under this subsection.CommentsClose CommentsPermalink





‘(B) CLEARINGHOUSE- The Secretary of Housing and Urban Development and the Federal property managers shall develop a clearinghouse for the information compiled under this paragraph, and make such clearinghouse easily accessible by States and local governments described in paragraph (1).CommentsClose CommentsPermalink





‘(e) Limitation- The requirements of this section shall be in addition to any other duty or requirement imposed on the Federal property managers under otherwise applicable law.CommentsClose CommentsPermalink

‘SEC. 161. MINIMIZATION OF LONG-TERM COSTS AND MAXIMIZATION OF BENEFITS FOR TAXPAYERS.

‘(a) Long-Term Costs and Benefits-CommentsClose CommentsPermalink





‘(1) MINIMIZING NEGATIVE IMPACT- The Secretary shall use the authority under this subtitle in a manner that will minimize any potential long-term negative impact on the taxpayer, taking into account the direct outlays, potential long-term returns on assets purchased, and the overall economic benefits of the program, including economic benefits due to reduced foreclosures and defaults, reduced bankruptcies, neighborhood impacts, improvements in economic activity and the availability of credit, the impact on the savings and pensions of individuals, reductions in losses to the Federal Government, and other factors.CommentsClose CommentsPermalink





‘(2) AUTHORITY- In carrying out paragraph (1), the Secretary shall--CommentsClose CommentsPermalink





‘(A) hold the assets to maturity or for resale for and until such time as the Secretary determines that the market is appropriate for selling such assets, in order to maximize the value for taxpayers;CommentsClose CommentsPermalink





‘(B) issue loan guarantees or credit enhancements on loans to be sold, where appropriate; andCommentsClose CommentsPermalink





‘(C) sell such assets at a price that the Secretary determines, based on available financial analysis, will maximize return on investment for the Federal Government.CommentsClose CommentsPermalink





‘(3) PRIVATE SECTOR PARTICIPATION- The Secretary shall encourage the private sector to participate in purchases of home mortgage loans consistent with the provisions of this subtitle.CommentsClose CommentsPermalink





‘(b) Use of Market Mechanisms- In making purchases under this subtitle, the Secretary shall--CommentsClose CommentsPermalink





‘(1) make such purchases at the lowest price that the Secretary determines to be consistent with the purposes of this subtitle;CommentsClose CommentsPermalink





‘(2) maximize the efficiency of the use of taxpayer resources by using market mechanisms, including auctions or reverse auctions, where appropriate; andCommentsClose CommentsPermalink





‘(3) encourage private sector participation in purchases of home mortgage loans through auctions, reverse auctions and direct purchases as authorized by this subtitle.CommentsClose CommentsPermalink





‘(c) Direct Purchases- If the Secretary determines that use of a market mechanism under subsection (b) is not feasible or appropriate, and the purposes of the subtitle are best met through direct purchases by the Secretary from an individual financial institution, the Secretary shall pursue additional measures to ensure that prices paid for assets are reasonable and reflect the underlying value of the asset.CommentsClose CommentsPermalink





‘(d) Purchase Authority for Warrants and Debt Instruments-CommentsClose CommentsPermalink





‘(1) IN GENERAL- In exchange for asset purchases, guarantees or capital infusions, the Secretary may receive from any financial institution--CommentsClose CommentsPermalink





‘(A) in the case of a financial institution that is registered (or approved for registration) and traded on a national securities exchange or a national securities association registered pursuant to section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o-3), a warrant giving the right to the Secretary to receive nonvoting common stock or preferred stock in such financial institution, as the Secretary determines appropriate; orCommentsClose CommentsPermalink





‘(B) in the case of any financial institution other than one described in subparagraph (A), a senior debt instrument from such financial institution, as described in paragraph (2)(C).CommentsClose CommentsPermalink





‘(2) TERMS AND CONDITIONS- The terms and conditions of any warrant or senior debt instrument acquired under paragraph (1) shall meet the following requirements:CommentsClose CommentsPermalink





‘(A) PURPOSES- Such terms and conditions shall, at a minimum, be designed--CommentsClose CommentsPermalink





‘(i) to provide for reasonable participation by the Secretary, for the benefit of taxpayers, in equity appreciation in the case of a warrant, or a reasonable interest rate premium, in the case of a debt instrument; andCommentsClose CommentsPermalink





‘(ii) to provide additional protection for the taxpayer and stability to the financial system.CommentsClose CommentsPermalink





‘(B) AUTHORITY TO SELL, EXERCISE, SURRENDER- The Secretary may sell, exercise, or surrender a warrant or any senior debt instrument received under this subsection, based on the conditions established under subparagraph (A).CommentsClose CommentsPermalink





‘(C) CONVERSION- The warrant shall provide that if, after the warrant is received by the Secretary under this subsection, the financial institution that issued the warrant is no longer listed or traded on a national securities exchange or securities association, as described in paragraph (1)(A), such warrants shall convert to senior debt, in an amount determined by the Secretary and subject to such other conditions as are determined by the Secretary.CommentsClose CommentsPermalink





‘(D) PROTECTIONS- Any warrant representing securities to be received by the Secretary under this subsection shall contain antidilution provisions of the type employed in capital market transactions, as determined by the Secretary. Such provisions shall protect the value of the securities from market transactions such as stock splits, stock distributions, dividends, and other distributions, mergers, and other forms of reorganization or recapitalization.CommentsClose CommentsPermalink





‘(E) EXERCISE PRICE- The exercise price for any warrant issued pursuant to this subsection shall be set by the Secretary, in the interest of the taxpayers.CommentsClose CommentsPermalink





‘(F) SUFFICIENCY- The financial institution shall guarantee to the Secretary that it has authorized shares of nonvoting stock available to fulfill its obligations under this subsection. Should the financial institution not have sufficient authorized shares, including preferred shares that may carry dividend rights equal to a multiple number of common shares, the Secretary may, to the extent necessary, accept a senior debt note in an amount, and on such terms, as will compensate the Secretary equivalently, in the event that a sufficient shareholder vote to authorize the necessary additional shares cannot be obtained.CommentsClose CommentsPermalink

‘SEC. 162. MARKET TRANSPARENCY.

‘(a) Pricing- To facilitate market transparency, the Secretary shall make available to the public, in electronic form, a description, the amounts, and the pricing of assets acquired under this subtitle, within 2 business days of purchase, trade, or other disposition.CommentsClose CommentsPermalink





‘(b) Disclosure- For each type of financial institutions that sells home mortgages to the Secretary under this subtitle, the Secretary shall determine whether the public disclosure required for such financial institutions with respect to off-balance sheet transactions, derivatives instruments, contingent liabilities, and similar sources of potential exposure is adequate to provide to the public sufficient information as to the true financial position of the institutions. If such disclosure is not adequate for that purpose, the Secretary shall make recommendations for additional disclosure requirements to the relevant regulators.CommentsClose CommentsPermalink

‘SEC. 163. OVERSIGHT AND AUDITS.

‘(a) Comptroller General Oversight-CommentsClose CommentsPermalink





‘(1) SCOPE OF OVERSIGHT- The Comptroller General of the United States shall, upon enactment of this subtitle, commence ongoing oversight of the activities and performance of the Secretary and of any agents and representatives the Secretary (as related to the agent or representative’s activities on behalf of or under the authority of the Secretary), including vehicles established by the Secretary under this subtitle. The subjects of oversight shall include the following:CommentsClose CommentsPermalink





‘(A) The performance of the Secretary in meeting the purposes of this subtitle, particularly those involving--CommentsClose CommentsPermalink





‘(i) foreclosure mitigation;CommentsClose CommentsPermalink





‘(ii) cost reduction;CommentsClose CommentsPermalink





‘(iii) financial market stability;CommentsClose CommentsPermalink





‘(iv) neighborhood stabilization; andCommentsClose CommentsPermalink





‘(v) taxpayer protection.CommentsClose CommentsPermalink





‘(B) The financial condition and internal controls of the Secretary’s programs, representatives and agents.CommentsClose CommentsPermalink





‘(C) Characteristics of transactions and commitments entered into, including transaction type, frequency, size, price paid, and all other relevant terms and conditions, and the timing, duration and terms of any future commitments to purchase assets.CommentsClose CommentsPermalink





‘(D) Characteristics and disposition of acquired assets, including type, acquisition price, current market value, sale prices and terms, and use of proceeds from sales.CommentsClose CommentsPermalink





‘(E) Efficiency of the operations of the Secretary in the use of appropriated funds.CommentsClose CommentsPermalink





‘(F) Compliance with all applicable laws and regulation by the Secretary, its agents and representatives.CommentsClose CommentsPermalink





‘(G) The efforts of the Secretary to prevent, identify, and minimize conflicts of interest involving any agent or representative performing activities on behalf of or under the authority of the Secretary.CommentsClose CommentsPermalink





‘(H) The efficacy of contracting procedures pursuant to section 157(b), including, as applicable, the efforts of the Secretary in evaluating proposals for inclusion and contracting to the maximum extent possible of minorities (as such term is defined in 1204(c) of the Financial Institutions Reform, Recovery, and Enhancement Act of 1989 (12 U.S.C. 1811 note), women, and minority- and women-owned businesses, including ascertaining and reporting the total amount of fees paid and other value delivered by the Secretary to all of his agents and representatives, and such amounts paid or delivered to such firms that are minority- and women-owned businesses (as such terms are defined in section 21A of the Federal Home Loan Bank Act (12 U.S.C. 1441a)).CommentsClose CommentsPermalink





‘(2) CONDUCT AND ADMINISTRATION OF OVERSIGHT-CommentsClose CommentsPermalink





‘(A) GAO PRESENCE- The Secretary shall provide the Comptroller General with appropriate space and facilities in the Department of the Treasury as necessary to facilitate oversight until the termination date established in section 165.CommentsClose CommentsPermalink





‘(B) ACCESS TO RECORDS- To the extent otherwise consistent with law, the Comptroller General shall have access, upon request, to any information, data, schedules, books, accounts, financial records, reports, files, electronic communications, or other papers, things or property belonging to or in use by the Secretary, or any vehicles established by the Secretary under this subtitle, and to the officers, directors, employees, independent public accountants, financial advisors, and other agents and representatives of the Secretary (as related to the agent or representative’s activities on behalf of or under the authority of the Secretary) or any such vehicle at such reasonable time as the Comptroller General may request. The Comptroller General shall be shall be afforded full facilities for verifying transactions with the balances or securities held transactions with the balances or securities held by depositaries, fiscal agents, and custodians. The Comptroller General may make and retain copies of such books, accounts, and other records as the Comptroller General appropriate.CommentsClose CommentsPermalink





‘(C) REIMBURSEMENT OF COSTS- The Treasury shall reimburse the Government Accountability Office for the full cost of any such oversight activities as billed therefore by the Comptroller General of the United States. Such reimbursements shall be credited to the appropriation account ‘Salaries and Expenses’, Government received and remain available until expended.CommentsClose CommentsPermalink





‘(3) REPORTING- The Comptroller General shall submit reports of findings under this section, regularly and no less frequently than once every 60 days, to the appropriate committees of Congress, and the Special Inspector General for the Home Mortgage Program established under this subtitle on activities and performance of the Secretary. The Comptroller may also submit special reports under may also submit special reports under this subsection as warranted by the findings of its oversight activities.CommentsClose CommentsPermalink





‘(b) Comptroller General Audits-CommentsClose CommentsPermalink





‘(1) ANNUAL AUDIT- The Secretary shall annually prepare and issue to the appropriate committees of Congress and the public audited financial statements prepared in accordance with generally accepted accounting principles, and the Comptroller General shall annually audit such statements in accordance with generally accepted auditing standards. The Treasury shall reimburse the Government Accountability Office for the full cost of any such audit as billed therefore by the Comptroller General. Such reimbursements shall be credited to the appropriation account ‘Salaries and Expenses, Government Accountability Office’ current when payment is received and remain available until expended. The financial statements under this paragraph shall be on the fiscal year basis prescribed under section 1102 of title 31, United States Code.CommentsClose CommentsPermalink





‘(2) AUTHORITY- The Comptroller General may audit the programs, activities, receipts, expenditures, and financial transactions of the Secretary and any agents and representatives of the Secretary (as related to the agent or representative’s activities on behalf of or under the authority of the Secretary), including vehicles established by the Secretary under this subtitle.CommentsClose CommentsPermalink





‘(3) CORRECTIVE RESPONSES TO AUDIT PROBLEMS- The Secretary shall--CommentsClose CommentsPermalink





‘(A) take action to address deficiencies identified by the Comptroller General or other auditor engaged by the Secretary; orCommentsClose CommentsPermalink





‘(B) certify to appropriate committees of Congress that no action is necessary or appropriate.CommentsClose CommentsPermalink





‘(c) Internal Control-CommentsClose CommentsPermalink





‘(1) ESTABLISHMENT- The Secretary shall establish and maintain an effective system of internal control, consistent with the standards prescribed under section 3512(c) of title 31, United States Code, that provides reasonable assurance of--CommentsClose CommentsPermalink





‘(A) the effectiveness and efficiency of operations, including the use of the resources of the Secretary;CommentsClose CommentsPermalink





‘(B) the reliability of financial reporting, including financial statements and other reports for internal and external use; andCommentsClose CommentsPermalink





‘(C) compliance with applicable laws and regulations.CommentsClose CommentsPermalink





‘(2) REPORTING- In conjunction with each annual financial statement issued under this section, the Secretary shall--CommentsClose CommentsPermalink





‘(A) state the responsibility of management for establishing and maintaining adequate internal control over financial reporting; andCommentsClose CommentsPermalink





‘(B) state its assessment, as of the end of the most recent year covered by such financial statement of the Secretary, of the effectiveness of the internal control over financial reporting.CommentsClose CommentsPermalink





‘(d) Sharing of Information- Any report or audit required under this section shall also be submitted to the Congressional Oversight Panel established under section 125.CommentsClose CommentsPermalink





‘(e) Termination- Any oversight, reporting, or audit requirement under this section shall terminate on the later of--CommentsClose CommentsPermalink





‘(1) the date that the last asset acquired by the Secretary under section; orCommentsClose CommentsPermalink





‘(2) the date of expiration of the last insurance contract issued under section 152.CommentsClose CommentsPermalink

‘SEC. 164. JUDICIAL REVIEW AND RELATED MATTERS.

‘(a) Judicial Review-CommentsClose CommentsPermalink





‘(1) STANDARD- Actions by the Secretary pursuant to the authority of this subtitle shall be subject to chapter 7 of title 5, United States Code, including that such final actions shall be held unlawful and set aside if found to be arbitrary, capricious, an abuse of discretion, or not in accordance with law.CommentsClose CommentsPermalink





‘(2) LIMITATIONS ON EQUITABLE RELIEF-CommentsClose CommentsPermalink





‘(A) INJUNCTION- No injunction or other form of equitable relief shall be issued against the Secretary for actions pursuant to section 151, 152, 156, and 159, other than to remedy a violation of the Constitution.CommentsClose CommentsPermalink





‘(B) TEMPORARY RESTRAINING ORDER- Any request for a temporary restraining order against the Secretary for actions pursuant to this subtitle shall be considered and granted or denied by the court within 3 days of the date of the request.CommentsClose CommentsPermalink





‘(C) PRELIMINARY INJUNCTION- Any request for a preliminary injunction against the Secretary for actions pursuant to this subtitle shall be considered and granted or denied by the court on an expedited basis consistent with the provisions of rule 65(b)(3) of the Federal Rules of Civil Procedure, or any successor thereto.CommentsClose CommentsPermalink





‘(D) PERMANENT INJUNCTION- Any request for a permanent injunction against the Secretary for actions pursuant to this subtitle shall be considered and granted or denied by the court on an expedited basis. Whenever possible, the court shall consolidate trial on the merits with any hearing on a request for a preliminary injunction, consistent with the provisions of rule 65(a)(2) of the Federal Rules of Civil Procedure, or any successor thereto.CommentsClose CommentsPermalink





‘(3) LIMITATION ON ACTIONS BY PARTICIPATING COMPANIES- Unless expressly provided in a written contract with the Secretary, no action or claim, other than one brought under chapter 7 of Title 5, United States Code, may be brought against the Secretary by any person that divests its assets under a program under this subtitle.CommentsClose CommentsPermalink





‘(4) STAYS- Any injunction or other form of equitable relief issued against the Secretary for actions pursuant to section 151, 152, 156, and 159, shall be automatically stayed. The stay shall be lifted unless the Secretary seeks a stay from a higher court within 3 calendar days after the date on which the relief is issued.CommentsClose CommentsPermalink





‘(b) Related Matters-CommentsClose CommentsPermalink





‘(1) TREATMENT OF HOMEOWNERS’ RIGHTS- The terms of any residential mortgage loan that is part of any purchase by the Secretary under this subtitle shall remain subject to all claims and defenses that would otherwise apply, notwithstanding the exercise of authority by the Secretary under this subtitle.CommentsClose CommentsPermalink





‘(2) SAVINGS CLAUSE- Any exercise of the authority of the Secretary pursuant to this subtitle shall not impair the claims or defenses that would otherwise apply with respect to persons other than the Secretary.CommentsClose CommentsPermalink





‘(3) TREATMENT OF INVESTORS’ RIGHTS- (A) Under existing standard industry practice, if a servicer of pooled residential mortgages owes a duty to determine whether the net present value of the payments on a mortgage loan, as modified, sold, refinanced or otherwise disposed of, is likely to be greater than the anticipated net recovery that would result from default or foreclosure, such servicer owes such duty to all investors and holders of beneficial interests in such loan, but not to any individual or group of investors or beneficial interest holders.CommentsClose CommentsPermalink





‘(B) Any servicer of pooled residential mortgages shall be deemed to have satisfied the duty specified in subsection (A) if the servicer agrees to or implements a modification, sale, refinancing, or other disposition, including acceptance of partial payments, interest rate reductions, principal write downs, short sales, and other measures to mitigate loss, so long as the servicer reasonably determines that the net present value of the payments on a mortgage loan, as modified, sold, refinanced or otherwise disposed of, is likely to be greater than the anticipated net recovery that would result from default or foreclosure.CommentsClose CommentsPermalink

‘SEC. 165. TERMINATION OF AUTHORITY.

‘(a) Termination- The authorities provided under sections 151(a) and 152 shall terminate on December 31, 2009.CommentsClose CommentsPermalink





‘(b) Extension Upon Certification- The Secretary, upon submission of a written certification to Congress, may extend the authority provided under this subtitle to expire not later than 2 years from the date of enactment of this subtitle. Such certification shall include a justification of why the extension is necessary to assist American families and stabilize financial markets, as well as the expected cost to the taxpayers for such an extension.CommentsClose CommentsPermalink

‘SEC. 166. CREDIT REFORM.

‘(a) In General- Subject to subsection (b), the costs of purchases of assets made under section 151(a) and guarantees of assets under section 152, and any cash flows associated with the activities authorized in section 102 and subsections (a), (b), and (c) of section 156 shall be determined as provided under the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.), as applicable.CommentsClose CommentsPermalink





‘(b) Costs- For the purposes of section 502(5) of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5))--CommentsClose CommentsPermalink





‘(1) the cost of assets and guarantees of assets shall be calculated by adjusting the discount rate in section 502(5)(E) (2 U.S.C. 661a(5)(E)) for market risks; andCommentsClose CommentsPermalink





‘(2) the cost of a modification of a asset or guarantee of a asset shall be the difference between the current estimate consistent with paragraph (1) under the terms of the asset or guarantee of the asset and the current estimate consistent with paragraph (1) under the terms of the asset or guarantee of the asset, as modified.CommentsClose CommentsPermalink

‘SEC. 167. PRESERVATION OF QUALIFIED SPECIAL PURPOSE ENTITY STATUS.

‘Notwithstanding Statement Number 140 of the Financial Accounting Standards Board or and any other provision of law, a Qualified Special Purpose Entity (in this section referred to as a ‘QSPE’) may participate in a program established by the Secretary under this subtitle, in the discretion of the servicer or trustee of the QSPE, by selling, disposing of or modifying any home mortgage loan from the assets of the QSPE, as provided by the Secretary, and such participation shall not alter the status of the entity selling, modifying or disposing of such loans as a QSPE for purposes of Statement 140 or any other provision of law.CommentsClose CommentsPermalink

‘SEC. 168. DEFINITIONS.

‘For purposes of this subtitle, the following definitions shall apply:CommentsClose CommentsPermalink





‘(1) APPROPRIATE COMMITTEES OF CONGRESS- The term ‘appropriate committees of Congress’ means--CommentsClose CommentsPermalink





‘(A) the Committee on Banking, Housing, and Urban Affairs, the Committee on Finance, the Committee on the Budget, and the Committee on Appropriations of the Senate; andCommentsClose CommentsPermalink





‘(B) the Committee on Financial Services, the Committee on Ways and Means, the Committee on the Budget, and the Committee on Appropriations of the House of Representatives.CommentsClose CommentsPermalink





‘(2) BOARD- The term ‘Board’ means the Board of Governors of the Federal Reserve System.CommentsClose CommentsPermalink





‘(3) CONGRESSIONAL SUPPORT AGENCIES- The term ‘congressional support agencies’ means the Congressional Budget Office and the Joint Committee on Taxation.CommentsClose CommentsPermalink





‘(4) CORPORATION- The term ‘Corporation’ means the Federal Deposit Insurance Corporation.CommentsClose CommentsPermalink





‘(5) FAMILY FORECLOSURE RESCUE CORPORATION- The term ‘Family Foreclosure Rescue Corporation’ mean the entity established by the Secretary under section 151.CommentsClose CommentsPermalink





‘(6) FINANCIAL INSTITUTION- The term ‘financial institution’ means any institution, trust, partnership, incorporated entity or other legal form, including but not limited to, any bank, savings association, credit union, security broker or dealer, insurance company, or securitization trust.CommentsClose CommentsPermalink





‘(7) FUND- The term ‘Fund’ means the Home Mortgage Insurance Financing Fund established under section 102.CommentsClose CommentsPermalink





‘(8) HOME MORTGAGES- The term ‘home mortgages’ means residential mortgages originated on or before the date of enactment of this subtitle, including residential mortgages held in securitization trusts, residential mortgages held by financial institutions, mortgages supporting multifamily housing, servicing rights with respect to home mortgages, other real estate owned by financial institutions, and residential mortgage-backed securities, the purchase, guarantee, modification or disposition of which the Secretary determines promotes financial market stability.CommentsClose CommentsPermalink





‘(9) SECRETARY- The term ‘Secretary’ means the Secretary of the Treasury.CommentsClose CommentsPermalink





‘(10) FFRC PROGRAM- The term ‘FFRC program’ means the home mortgage relief program established under section 151(a)(3).CommentsClose CommentsPermalink





‘(11) SHARED EQUITY MORTGAGE- The term ‘shared equity mortgage’ means a mortgage product through which increases in the equity in a home realized upon sale or disposition are shared among the homeowner, the Secretary, or other parties.CommentsClose CommentsPermalink

‘SEC. 169. PRESERVATION OF AUTHORITY.

‘Nothing in this subtitle may be construed to limit the authority of the Secretary under any other provision of law.’.CommentsClose CommentsPermalink





(b) Clerical Amendments-CommentsClose CommentsPermalink





(1) TITLE 5- Section 5314 of title 5, United States Code, is amended by adding at the end the following new item:CommentsClose CommentsPermalink





‘Chairman, Family Foreclosure Rescue Corporation.’.CommentsClose CommentsPermalink





(2) TITLE 31- Section 301 of title 31, United States Code, is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(h) The Department has one Chairman of the Family Foreclosure Rescue Corporation, appointed by the President, by and with the advice and consent of the Senate, who reports to the Secretary .’.CommentsClose CommentsPermalink





(3) TABLE OF CONTENTS AMENDMENT- The table of contents in section (1)(b) of the Emergency Economic Stabilization Act of 2008 (Public Law 110-343; 122 Stat. 3765) is amended--CommentsClose CommentsPermalink





(A) by adding after the item relating to title I the following:CommentsClose CommentsPermalink

‘Subtitle A--Program for Purchases of Troubled Assets’;

andCommentsClose CommentsPermalink





(B) by adding after the item relating to section 136 the following:CommentsClose CommentsPermalink

‘Subtitle B--Family Foreclosure Rescue Corporation Program

‘Sec. 150. Authority under TARP Program.CommentsClose CommentsPermalink





‘Sec. 151. Purchases of home mortgages.CommentsClose CommentsPermalink





‘Sec. 152. Insurance of home mortgages.CommentsClose CommentsPermalink





‘Sec. 153. Considerations.CommentsClose CommentsPermalink





‘Sec. 154. FFRC Oversight Board.CommentsClose CommentsPermalink





‘Sec. 155. Reports.CommentsClose CommentsPermalink





‘Sec. 156. Rights; management; sale of home mortgages; revenues and sale proceeds.CommentsClose CommentsPermalink





‘Sec. 157. Contracting procedures.CommentsClose CommentsPermalink





‘Sec. 158. Conflicts of interest.CommentsClose CommentsPermalink





‘Sec. 159. Foreclosure mitigation efforts.CommentsClose CommentsPermalink





‘Sec. 160. Assistance to homeowners.CommentsClose CommentsPermalink





‘Sec. 161. Minimization of long-term costs and maximization of benefits for taxpayers.CommentsClose CommentsPermalink





‘Sec. 162. Market transparency.CommentsClose CommentsPermalink





‘Sec. 163. Oversight and audits.CommentsClose CommentsPermalink





‘Sec. 164. Judicial review and related matters.CommentsClose CommentsPermalink





‘Sec. 165. Termination of authority.CommentsClose CommentsPermalink





‘Sec. 166. Credit reform.CommentsClose CommentsPermalink





‘Sec. 167. Preservation of qualified special purpose entity status.CommentsClose CommentsPermalink





‘Sec. 168. Definitions.CommentsClose CommentsPermalink





‘Sec. 169. Preservation of authority.’.CommentsClose CommentsPermalink

SEC. 4. TAX PROVISIONS.

(a) Preservation of Status as Real Estate Mortgage Investment Conduit- If a REMIC (as defined in section 860D(a) of the Internal Revenue Code of 1986) sells, modifies or otherwise disposes of a home mortgage loan under a program established by the Secretary of the Treasury under this Act--CommentsClose CommentsPermalink





(1) such sale, modification or disposition shall not be treated as a prohibited transaction under section 860F(a)(2) of such Code, andCommentsClose CommentsPermalink





(2) for purposes of part IV of subchapter M of chapter 1 of such Code--CommentsClose CommentsPermalink





(A) an interest in the REMIC shall not fail to be treated as a regular interest (as defined in section 860G(a)(1) of such Code) solely because of such sale, modification or disposition, andCommentsClose CommentsPermalink





(B) any proceeds of such sale, modification or disposition shall be treated as amounts received under qualified mortgages.CommentsClose CommentsPermalink





(b) Continued REMIC Status-CommentsClose CommentsPermalink





(1) Any REMIC shall cease to be a REMIC if, after the period ending three months from the date of enactment of this Act, instruments governing the conduct of servicers or trustees with respect to home mortgage loans underlying the REMIC have the effect of prohibiting servicers or trustees from exercising discretion to sell, modify or dispose of a home mortgage loan in order to participate in a program established by the Secretary of the Treasury under section 101 of this Act.CommentsClose CommentsPermalink





(2) Any REMIC shall cease to be a REMIC if, after the period ending three months from the date of enactment of this Act, instruments governing the conduct of servicers or trustees with respect to home mortgage loans underlying the REMIC either--CommentsClose CommentsPermalink





(A) commit to a party, other than the servicer or trustee, any discretion regarding loan modifications for loans that are in default or whose default is reasonably foreseeable; orCommentsClose CommentsPermalink





(B) have the effect of restricting servicers’ or trustees’ exercise of their discretion to modify, sell or dispose of any and all home mortgage loans as part of a program established by the Secretary of the Treasury under section 101 of this Act, including, without limitation, by--CommentsClose CommentsPermalink





(i) restricting in any way the type of modification, sale or disposition a servicer or trustee may engage in for loans that are in default or whose default is reasonably foreseeable;CommentsClose CommentsPermalink





(ii) restricting in any way the percentage, absolute amount, or number of loans held by the REMIC that may be modified, sold or disposed of;CommentsClose CommentsPermalink





(iii) restricting in any way the frequency of modifications, sales or dispositions of loans that are in default or whose default is reasonably foreseeable; orCommentsClose CommentsPermalink





(iv) requiring servicers or trustees to purchase modified loans from the REMIC.CommentsClose CommentsPermalink





(c) Effective Date- Subsection (a) shall apply to sales, dispositions or modifications made after the date of the enactment of this Act, in taxable years ending on or after such date, and subsections (b) and (c) shall be effective on the date of enactment of this Act.CommentsClose CommentsPermalink