[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3530 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 3530

   To require the exercise of clean-up call options under securities 
issued by the Federal National Mortgage Association or the Federal Home 
   Loan Mortgage Corporation and to prohibit any new mortgage-backed 
   securities issued by such enterprises to contain provisions for a 
                         clean-up call option.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 30, 2011

    Mr. Perlmutter (for himself and Mr. Schweikert) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
   To require the exercise of clean-up call options under securities 
issued by the Federal National Mortgage Association or the Federal Home 
   Loan Mortgage Corporation and to prohibit any new mortgage-backed 
   securities issued by such enterprises to contain provisions for a 
                         clean-up call option.

    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 ``Freddie Mac Debt Reduction Act of 
2011''.

SEC. 2. EXERCISE OF CLEAN-UP CALL OPTIONS.

    Subtitle B of title XIII of the Housing and Community Development 
Act of 1992 (12 U.S.C. 4611 et seq.) is amended by adding at the end 
the following new section:

``SEC. 1369F. EXERCISE OF CLEAN-UP CALL OPTIONS.

    ``(a) Requirement.--In complying with any restriction under law, 
regulation, order, or agreement with the Director or the Secretary of 
the Treasury on the mortgage assets issued by the Federal Home Loan 
Mortgage Corporation, such Corporation or, during the term of any 
conservatorship or receivership of such enterprise pursuant to section 
1367, the Director, shall in the case of any mortgage-backed security 
with a clean-up call option (as such term is defined in subsection (c) 
of this section) that is issued by such Corporation, exercise any 
option under which the residual holder is willing to share not less 
than 50 percent of any excess proceeds resulting from exercise of such 
option or right with the Agency as conservator or receiver of such 
Corporation, which thereby reduces the liability of the taxpayers of 
the United States.
    ``(b) Prohibition Regarding Issuance of New Securities.--The 
Director shall prohibit the Federal Home Loan Mortgage Corporation and 
the Federal National Mortgage Association from issuing, after the date 
of the enactment of this section, any mortgage-backed security with a 
clean-up call option.
    ``(c) Use of Proceeds To Reduce Deficit.--The Director shall ensure 
that any excess proceeds received as result of the exercise of any 
clean-up call option shall be used only to reduce the budget deficit of 
the Federal Government.
    ``(d) Definitions.--
            ``(1) Mortgage assets.--The term `mortgage assets' means, 
        with respect to the Federal Home Loan Mortgage Corporation, 
        assets of such Corporation consisting of mortgages, mortgage 
        loans, mortgage-related securities, participation certificates, 
        mortgage-backed commercial paper, obligations of real estate 
        mortgage investment conduits and similar assets, in each case 
        to the extent such assets would appear on the balance sheet of 
        such Corporation in accordance with generally accepted 
        accounting principles in effect in the United States as of 
        September 7, 2008 (as set forth in the opinions and 
        pronouncements of the Accounting Principles Board and the 
        American Institute of Certified Public Accountants and 
        statements and pronouncements of the Financial Accounting 
        Standards Board from time to time; and without giving any 
        effect to any change that may be made after September 7, 2008, 
        in respect of Statement of Financial Accounting Standards No. 
        140 or any similar accounting standard).
            ``(2) Mortgage-backed security with a clean-up call 
        option.--The term `mortgage-backed security with a clean-up 
        call option' means any mortgage-backed security under which 
        there is an option or right to redeem all remaining classes of 
        such security at such time when the amount of the aggregate 
        remaining principal would be less than the amount of the 
        optional redemption or clean-up call percentage, as defined in 
        the applicable circular offering or offering circular 
        supplement.
            ``(3) Excess proceeds.--The term `excess proceeds' means, 
        with respect to exercise of any clean-up call option, the 
        excess of the net proceeds from the sale of the collateral 
        underlying the mortgage-backed security with such option, and 
        the redemption price as defined in the applicable offering 
        circular or offering circular supplement.''.
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