1.This Act may be cited as the
Real Estate Mortgage Investment
Conduit Improvement Act of 2009
.
2.Special rules for
modification or disposition of qualified mortgages or foreclosure property by
real estate mortgage investment conduits
(a)If a REMIC (as defined in section 860D(a) of the Internal
Revenue Code of 1986) modifies or disposes of a troubled asset under the
Troubled Asset Relief Program established by the Secretary of the Treasury
under section 101(a) of the Emergency Economic Stabilization Act of 2008 or
under rules established by the Secretary under section 3 of this Act—
(1)such 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 modification or disposition,
and
(B)any proceeds
resulting from such modification or disposition shall be treated as amounts
received under qualified mortgages.
(b)For purposes of the Internal Revenue Code of 1986, an
entity which is a REMIC (as defined in section 860D(a) of the Internal Revenue
Code of 1986) shall cease to be a REMIC if the instruments governing the
conduct of servicers or trustees with respect to qualified mortgages (as
defined in section 860G(a)(3) of such Code) or foreclosure property (as defined
in section 860G(a)(8) of such Code)—
(1)prohibit or
restrict (including restrictions on the type, number, percentage, or frequency
of modifications or dispositions) such servicers or trustees from reasonably
modifying or disposing of such qualified mortgages or such foreclosure property
in order to participate in the Troubled Asset Relief Program established by the
Secretary of the Treasury under section 101(a) of the Emergency Economic
Stabilization Act of 2008 or under rules established by the Secretary under
section 3 of this Act,
(2)commit to a
person other than the servicer or trustee the authority to prevent the
reasonable modification or disposition of any such qualified mortgage or
foreclosure property,
(3)require a
servicer or trustee to purchase qualified mortgages which are in default or as
to which default is reasonably foreseeable for the purposes of reasonably
modifying such mortgages or as a consequence of such reasonable modification,
or
(4)fail to provide
that any duty a servicer or trustee owes when modifying or disposing of
qualified mortgages or foreclosure property shall be to the trust in the
aggregate and not to any individual or class of investors.
(c)
(1)Subsection (a) shall apply
to modification and dispositions after the date of the enactment of this Act,
in taxable years ending on or after such date.
(2)
(A)Except as provided in subparagraph (B), subsection (b)
shall take effect on the date that is 3 months after the date of the enactment
of this Act.
(B)The
Secretary of the Treasury may waive the application of subsection (b) in whole
or in part for any period of time with respect to any entity if—
(i)the Secretary
determines that such entity is unable to comply with the requirements of such
subsection in a timely manner, or
(ii)the Secretary
determines that such waiver would further the purposes of this Act.
3.Establishment of
a home mortgage loan relief program under the Troubled Asset Relief Program and
related authorities
(a)Not
later than 30 days after the date of enactment of this Act, the Secretary of
the Treasury shall establish and implement a program under the Troubled Asset
Relief Program and related authorities established under section 101(a) of the
Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211(a))—
(1)to achieve
appropriate broad-scale modifications or dispositions of troubled home mortgage
loans; and
(2)to achieve
appropriate broad-scale dispositions of foreclosure property.
(b)The
Secretary of the Treasury shall promulgate rules governing the—
(1)reasonable
modification of any home mortgage loan pursuant to the requirements of this
Act; and
(2)disposition of
any such home mortgage loan or foreclosed property pursuant to the requirements
of this Act.
(c)In
developing the rules required under subsection (b), the Secretary of the
Treasury shall take into consideration—
(1)the
debt-to-income ratio, loan-to-value ratio, or payment history of the mortgagors
of such home mortgage loans; and
(2)any other factors
consistent with the intent to streamline modifications of troubled home
mortgage loans into sustainable home mortgage loans.
(d)The Secretary of the Treasury shall use all available
authorities to implement the home mortgage loan relief program established
under this section, including, as appropriate—
(1)home mortgage
loan purchases;
(2)home mortgage
loan guarantees;
(3)making and
funding commitments to purchase home mortgage loans or mortgage-backed
securities;
(4)buying down
interest rates and principal on home mortgage loans;
(5)principal
forbearance; and
(6)developing
standard home mortgage loan modification and disposition protocols, which shall
include ratifying that servicer action taken in anticipation of any necessary
changes to the instruments governing the conduct of servicers or trustees with
respect to qualified mortgages or foreclosure property are consistent with the
Secretary of the Treasury's standard home mortgage loan modification and
disposition protocols.
(e)The Secretary of the Treasury is authorized to pay
servicers for home mortgage loan modifications or other dispositions consistent
with any rules established under subsection (b).
(f)Any standard home mortgage loan modification and
disposition protocols developed by the Secretary of the Treasury under this
section shall be construed to constitute standard industry practice.