[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1224 Introduced in House (IH)]

114th CONGRESS
  1st Session
                                H. R. 1224

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 3, 2015

    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 Home Loan Mortgage Corporation and to prohibit 
 any new mortgage-backed securities issued by such Corporation or the 
Federal National Mortgage Association from containing provisions for a 
             clean-up call option, and for other purposes.

    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 REMIC Reform Act of 
2015''.

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-backed securities 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 (d) 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, if such proceeds benefit 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 a 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-backed securities.--The term `mortgage-
        backed securities' means debt obligations issued in the form of 
        participation certificates, collateralized mortgage 
        obligations, mortgage-backed commercial paper, and real estate 
        mortgage investment conduits.
            ``(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 offering circular 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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