[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 472 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 472

 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.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 13, 2009

   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 concerned

_______________________________________________________________________

                                 A BILL


 
 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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Family Foreclosure Rescue 
Corporation Act of 2009''.

SEC. 2. PURPOSES.

    The purposes of this Act are--
            (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; and
            (2) to ensure that such authority and such facilities are 
        used in a manner that--
                    (A) protects America's family equity including home 
                values, college funds, retirement accounts, and life 
                savings;
                    (B) preserves homeownership and promotes jobs and 
                economic growth;
                    (C) maximizes overall returns to the taxpayers of 
                the United States; and
                    (D) provides public accountability for the exercise 
                of such authority.

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

     ``Subtitle A--Program for Purchases of Troubled Assets''; and

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

      ``Subtitle B--Family Foreclosure Rescue Corporation Program

``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.

``SEC. 151. PURCHASES OF HOME MORTGAGES.

    ``(a) Offices; Authority.--
            ``(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.
            ``(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.
            ``(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.
    ``(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.
    ``(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:
            ``(1) The Secretary shall have direct hiring authority with 
        respect to the appointment of employees to administer this 
        subtitle.
            ``(2) Entering into contracts, including contracts for 
        services authorized by section 3109 of title 5, United States 
        Code.
            ``(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 required
            ``(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.
            ``(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.
            ``(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--
                    ``(A) the servicer or trustee has acted reasonably 
                in selling, disposing of or modifying the mortgage; and
                    ``(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.
            ``(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.
    ``(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:
            ``(1) Mechanisms for purchasing home mortgages in exchange 
        for cash, Treasury securities or other assets.
            ``(2) Methods for pricing and valuing home mortgages.
            ``(3) Procedures for selecting home mortgage asset 
        managers.
            ``(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.
    ``(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.

``SEC. 152. INSURANCE OF HOME MORTGAGES.

    ``(a) Authority.--
            ``(1) In general.--The Secretary shall establish a program 
        to guarantee home mortgages consistent with section 159(b) and 
        the purposes of this subtitle.
            ``(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.
            ``(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.
    ``(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).
    ``(c) Premiums.--
            ``(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).
            ``(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).
            ``(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.
    ``(d) Home Mortgage Insurance Financing Fund.--
            ``(1) Deposits.--The Secretary shall deposit fees collected 
        under this section into the Fund established under paragraph 
        (2)
            ``(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.
            ``(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).
            ``(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).

``SEC. 153. CONSIDERATIONS.

    ``In exercising the authorities granted in this subtitle, the 
Secretary shall take into consideration--
            ``(1) providing mechanisms for families to keep their homes 
        and to stabilize communities;
            ``(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;
            ``(3) protecting the interests of taxpayers by maximizing 
        overall returns and minimizing the impact on the national debt;
            ``(4) determining the most efficient use of funds under 
        this subtitle;
            ``(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;
            ``(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;
            ``(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;
            ``(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; and
            ``(9) purchasing home mortgage loans, residential other 
        real estate owned by financial institutions and mortgages on 
        multifamily properties.

``SEC. 154. FFRC OVERSIGHT BOARD.

    ``(a) Establishment.--There is established the Family Foreclosure 
Rescue Corporation Oversight Board, which shall be responsible for--
            ``(1) reviewing the exercise of authority under a program 
        developed in accordance with this subtitle, including
                    ``(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; and
                    ``(B) the effect of such actions in assisting 
                American families in preserving home ownership, 
                stabilizing financial markets, and protecting 
                taxpayers;
            ``(2) making recommendations, as appropriate, to the 
        Secretary regarding use of the authority under this subtitle; 
        and
            ``(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.
    ``(b) Membership.--The Oversight Board shall be comprised of--
            ``(1) the Chairman of the Board of Governors of the Federal 
        Reserve System;
            ``(2) the Secretary;
            ``(3) the Director of the Federal Home Finance Agency;
            ``(4) the Chairman of the Securities Exchange Commission;
            ``(5) the Chairman of the Corporation; and
            ``(6) the Secretary of Housing and Urban Development.
    ``(c) Chairperson.--The chairperson of the Oversight Board shall be 
the Chairman of the Corporation.
    ``(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.
    ``(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--
            ``(1) in accordance with the purposes of this subtitle;
            ``(2) in the economic interests of the United States; and
            ``(3) consistent with protecting taxpayers, in accordance 
        with section 161(a).
    ``(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.
    ``(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).
    ``(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--
            ``(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; or
            ``(2) the date of expiration of the last insurance contract 
        issued under section 152.

``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--
            ``(1) an overview of actions taken by the Secretary, 
        including the factors to be taken in consideration in section 
        153;
            ``(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; and
            ``(3) a detailed financial statement with respect to the 
        exercise of authority under this subtitle, including--
                    ``(A) all agreements made or renewed;
                    ``(B) all insurance contracts entered into pursuant 
                to section 152;
                    ``(C) all transactions occurring during such 
                period, including the types of parties involved;
                    ``(D) the nature of the assets purchased;
                    ``(E) all projected costs and liabilities;
                    ``(F) operating expenses, including compensation 
                for financial agents;
                    ``(G) the valuation or pricing method used for each 
                transaction; and
                    ``(H) a description of the vehicles established to 
                exercise such authority.
    ``(b) Tranche Reports to Congress.--
            ``(1) Reports.--The Secretary shall provide to the 
        appropriate committees of Congress, at the times specified in 
        paragraph (2), a written report, including--
                    ``(A) a description of all of the transactions made 
                during the reporting period;
                    ``(B) a description of the pricing mechanism for 
                the transactions;
                    ``(C) a justification of the price paid for and 
                other financial terms associated with the transactions;
                    ``(D) a description of the impact of the exercise 
                of such authority on the financial system, supported to 
                the extent possible, by specific data;
                    ``(E) a description of challenges that remain in 
                the financial system, including any benchmarks yet to 
                be achieved; and
                    ``(F) an estimate of additional actions under the 
                authority provided under this subtitle that may be 
                necessary to address such challenges.
            ``(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.
    ``(c) Sharing of Information.--Any report required under this 
section shall also be submitted to the Congressional Oversight Panel 
established under section 125.
    ``(d) Sunset.--The reporting requirements under this section shall 
terminate on the later of--
            ``(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; or
            ``(2) the date of expiration of the last insurance contract 
        issued under section 152.

``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 subtitle
    ``(b) Management of Home Mortgages.--
            ``(1) In general.--The Secretary shall have authority to 
        manage home mortgages purchased under this subtitle, including 
        revenues and portfolio risks therefrom.
            ``(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.
            ``(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.
            ``(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.
    ``(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.
    ``(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).
    ``(e) Transfer of a Percentage of Profits.--
            ``(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).
            ``(2) Use of deposits.--Of the amount referred to in 
        paragraph (1)--
                    ``(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);
                    ``(B) 35 percent shall be deposited into the 
                Capital Magnet Fund established under section 1339 of 
                that Act (12 U.S.C. 4569).
            ``(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.
    ``(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.

``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.
    ``(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.
    ``(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--
            ``(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;
            ``(2) in performing such duties shall report to the 
        Chairman of the Family Foreclosure Rescue Corporation; and
            ``(3) shall be reimbursed by the Secretary for any services 
        provided.

``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--
            ``(1) the selection or hiring of contractors or advisors, 
        including asset managers;
            ``(2) the purchase of home mortgages;
            ``(3) the management of the assets held;
            ``(4) post-employment restrictions on employees; and
            ``(5) any other potential conflict of interest, as the 
        Secretary deems necessary or appropriate in the public 
        interest.
    ``(b) Timing.--Regulations or guidelines required by this section 
shall be issued as soon as practicable after the date of enactment of 
this subtitle.

``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.
    ``(b) Loan Guarantees.--
            ``(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.
            ``(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.
            ``(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.
            ``(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.
    ``(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.
    ``(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.
    ``(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.

``SEC. 160. ASSISTANCE TO HOMEOWNERS.

    ``(a) Definitions.--As used in this section--
            ``(1) the term `Federal property manager' means--
                    ``(A) the Federal Housing Finance Agency, in its 
                capacity as conservator of the Federal National 
                Mortgage Association and the Federal Home Loan Mortgage 
                Corporation;
                    ``(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)); and
                    ``(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;
            ``(2) the term `consumer' has the same meaning as in 
        section 103 of the Truth in Lending Act (15 U.S.C. 1602);
            ``(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); and
            ``(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)).
    ``(b) Homeowner Assistance by Agencies.--
            ``(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.
            ``(2) Modifications.--In the case of a residential mortgage 
        loan, modifications made under paragraph (1) may include--
                    ``(A) reduction in interest rates;
                    ``(B) reduction of loan principal; and
                    ``(C) other similar modifications.
            ``(3) Tenant protections.--In the case of mortgages on 
        residential rental properties, modifications made under 
        paragraph (1) shall ensure--
                    ``(A) the continuation of any existing Federal, 
                State, and local rental subsidies and protections; and
                    ``(B) that modifications take into account the need 
                for operating funds to maintain decent and safe 
                conditions at the property.
            ``(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.
            ``(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.
            ``(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.
    ``(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--
            ``(1) encourage implementation by the loan servicers of 
        loan modifications developed under subsection (b);
            ``(2) assist in facilitating any such modifications, to the 
        extent possible; and
            ``(3) encourage loan servicers to make foreclosed 
        properties available for sale to State and local governments at 
        a discount.
    ``(d) Availability of Foreclosed Properties to State and 
Localities.--
            ``(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.
            ``(2) Information clearinghouse.--
                    ``(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.
                    ``(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).
    ``(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.

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

    ``(a) Long-Term Costs and Benefits.--
            ``(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.
            ``(2) Authority.--In carrying out paragraph (1), the 
        Secretary shall--
                    ``(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;
                    ``(B) issue loan guarantees or credit enhancements 
                on loans to be sold, where appropriate; and
                    ``(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.
            ``(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.
    ``(b) Use of Market Mechanisms.--In making purchases under this 
subtitle, the Secretary shall--
            ``(1) make such purchases at the lowest price that the 
        Secretary determines to be consistent with the purposes of this 
        subtitle;
            ``(2) maximize the efficiency of the use of taxpayer 
        resources by using market mechanisms, including auctions or 
        reverse auctions, where appropriate; and
            ``(3) encourage private sector participation in purchases 
        of home mortgage loans through auctions, reverse auctions and 
        direct purchases as authorized by this subtitle.
    ``(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.
    ``(d) Purchase Authority for Warrants and Debt Instruments.--
            ``(1) In general.--In exchange for asset purchases, 
        guarantees or capital infusions, the Secretary may receive from 
        any financial institution--
                    ``(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; or
                    ``(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).
            ``(2) Terms and conditions.--The terms and conditions of 
        any warrant or senior debt instrument acquired under paragraph 
        (1) shall meet the following requirements:
                    ``(A) Purposes.--Such terms and conditions shall, 
                at a minimum, be designed--
                            ``(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; 
                        and
                            ``(ii) to provide additional protection for 
                        the taxpayer and stability to the financial 
                        system.
                    ``(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).
                    ``(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.
                    ``(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.
                    ``(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.
                    ``(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.

``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.
    ``(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.

``SEC. 163. OVERSIGHT AND AUDITS.

    ``(a) Comptroller General Oversight.--
            ``(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:
                    ``(A) The performance of the Secretary in meeting 
                the purposes of this subtitle, particularly those 
                involving--
                            ``(i) foreclosure mitigation;
                            ``(ii) cost reduction;
                            ``(iii) financial market stability;
                            ``(iv) neighborhood stabilization; and
                            ``(v) taxpayer protection.
                    ``(B) The financial condition and internal controls 
                of the Secretary's programs, representatives and 
                agents.
                    ``(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.
                    ``(D) Characteristics and disposition of acquired 
                assets, including type, acquisition price, current 
                market value, sale prices and terms, and use of 
                proceeds from sales.
                    ``(E) Efficiency of the operations of the Secretary 
                in the use of appropriated funds.
                    ``(F) Compliance with all applicable laws and 
                regulation by the Secretary, its agents and 
                representatives.
                    ``(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.
                    ``(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)).
            ``(2) Conduct and administration of oversight.--
                    ``(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.
                    ``(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.
                    ``(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.
            ``(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.
    ``(b) Comptroller General Audits.--
            ``(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.
            ``(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.
            ``(3) Corrective responses to audit problems.--The 
        Secretary shall--
                    ``(A) take action to address deficiencies 
                identified by the Comptroller General or other auditor 
                engaged by the Secretary; or
                    ``(B) certify to appropriate committees of Congress 
                that no action is necessary or appropriate.
    ``(c) Internal Control.--
            ``(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--
                    ``(A) the effectiveness and efficiency of 
                operations, including the use of the resources of the 
                Secretary;
                    ``(B) the reliability of financial reporting, 
                including financial statements and other reports for 
                internal and external use; and
                    ``(C) compliance with applicable laws and 
                regulations.
            ``(2) Reporting.--In conjunction with each annual financial 
        statement issued under this section, the Secretary shall--
                    ``(A) state the responsibility of management for 
                establishing and maintaining adequate internal control 
                over financial reporting; and
                    ``(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.
    ``(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.
    ``(e) Termination.--Any oversight, reporting, or audit requirement 
under this section shall terminate on the later of--
            ``(1) the date that the last asset acquired by the 
        Secretary under section; or
            ``(2) the date of expiration of the last insurance contract 
        issued under section 152.

``SEC. 164. JUDICIAL REVIEW AND RELATED MATTERS.

    ``(a) Judicial Review.--
            ``(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.
            ``(2) Limitations on equitable relief.--
                    ``(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.
                    ``(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.
                    ``(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.
                    ``(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.
            ``(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.
            ``(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.
    ``(b) Related Matters.--
            ``(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.
            ``(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.
            ``(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.
            ``(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.

``SEC. 165. TERMINATION OF AUTHORITY.

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

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

``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.

``SEC. 168. DEFINITIONS.

    ``For purposes of this subtitle, the following definitions shall 
apply:
            ``(1) Appropriate committees of congress.--The term 
        `appropriate committees of Congress' means--
                    ``(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; and
                    ``(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.
            ``(2) Board.--The term `Board' means the Board of Governors 
        of the Federal Reserve System.
            ``(3) Congressional support agencies.--The term 
        `congressional support agencies' means the Congressional Budget 
        Office and the Joint Committee on Taxation.
            ``(4) Corporation.--The term `Corporation' means the 
        Federal Deposit Insurance Corporation.
            ``(5) Family foreclosure rescue corporation.--The term 
        `Family Foreclosure Rescue Corporation' mean the entity 
        established by the Secretary under section 151.
            ``(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.
            ``(7) Fund.--The term `Fund' means the Home Mortgage 
        Insurance Financing Fund established under section 102.
            ``(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.
            ``(9) Secretary.--The term `Secretary' means the Secretary 
        of the Treasury.
            ``(10) FFRC program.--The term `FFRC program' means the 
        home mortgage relief program established under section 
        151(a)(3).
            ``(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.

``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.''.
    (b) Clerical Amendments.--
            (1) Title 5.--Section 5314 of title 5, United States Code, 
        is amended by adding at the end the following new item:
            ``Chairman, Family Foreclosure Rescue Corporation.''.
            (2) Title 31.--Section 301 of title 31, United States Code, 
        is amended by adding at the end the following new subsection:
    ``(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 .''.
            (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--
                    (A) by adding after the item relating to title I 
                the following:

       ``Subtitle A--Program for Purchases of Troubled Assets'';

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

      ``Subtitle B--Family Foreclosure Rescue Corporation Program

``Sec. 150. Authority under TARP Program.
``Sec. 151. Purchases of home mortgages.
``Sec. 152. Insurance of home mortgages.
``Sec. 153. Considerations.
``Sec. 154. FFRC Oversight Board.
``Sec. 155. Reports.
``Sec. 156. Rights; management; sale of home mortgages; revenues and 
                            sale proceeds.
``Sec. 157. Contracting procedures.
``Sec. 158. Conflicts of interest.
``Sec. 159. Foreclosure mitigation efforts.
``Sec. 160. Assistance to homeowners.
``Sec. 161. Minimization of long-term costs and maximization of 
                            benefits for taxpayers.
``Sec. 162. Market transparency.
``Sec. 163. Oversight and audits.
``Sec. 164. Judicial review and related matters.
``Sec. 165. Termination of authority.
``Sec. 166. Credit reform.
``Sec. 167. Preservation of qualified special purpose entity status.
``Sec. 168. Definitions.
``Sec. 169. Preservation of authority.''.

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--
            (1) such sale, modification or disposition shall not be 
        treated as a prohibited transaction under section 860F(a)(2) of 
        such Code, and
            (2) for purposes of part IV of subchapter M of chapter 1 of 
        such Code--
                    (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, and
                    (B) any proceeds of such sale, modification or 
                disposition shall be treated as amounts received under 
                qualified mortgages.
    (b) Continued REMIC Status.--
            (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.
            (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--
                    (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; or
                    (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--
                            (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;
                            (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;
                            (iii) restricting in any way the frequency 
                        of modifications, sales or dispositions of 
                        loans that are in default or whose default is 
                        reasonably foreseeable; or
                            (iv) requiring servicers or trustees to 
                        purchase modified loans from the REMIC.
    (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.
                                 <all>