S.Amdt. 1041

SA 1041. Mr. REED submitted an amendment intended to be proposed to
amendment SA 1018 submitted by Mr. Dodd (for himself and Mr. Shelby) to
the bill S. 896, to prevent mortgage foreclosures and enhance mortgage
credit availability; which was ordered to lie on the table; as follows:

At the end of the amendment, add the following:

TITLE V--REAL ESTATE MORTGAGE INVESTMENT CONDUIT IMPROVEMENT ACT

SEC. 501. SHORT TITLE.

This title may be cited as the ``Real Estate Mortgage
Investment Conduit Improvement Act of 2009''.

SEC. 502. SPECIAL RULES FOR MODIFICATION OR DISPOSITION OF
QUALIFIED MORTGAGES OR FORECLOSURE PROPERTY BY
REAL ESTATE MORTGAGE INVESTMENT CONDUITS.

(a) In General.--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 503 of
this title--
(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) Termination of REMIC.--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)

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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 503 of this title,
(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) Effective Dates.--
(1) Subsection (a).--Subsection (a) shall apply to
modification and dispositions after the date of the enactment
of this title, in taxable years ending on or after such date.
(2) Subsection (b).--
(A) In general.--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 title.
(B) Exception.--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 title.

SEC. 503. ESTABLISHMENT OF A HOME MORTGAGE LOAN RELIEF
PROGRAM UNDER THE TROUBLED ASSET RELIEF PROGRAM
AND RELATED AUTHORITIES.

(a) Establishment.--Not later than 30 days after the date
of enactment of this title, 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) Rules.--The Secretary of the Treasury shall promulgate
rules governing the--
(1) reasonable modification of any home mortgage loan
pursuant to the requirements of this title; and
(2) disposition of any such home mortgage loan or
foreclosed property pursuant to the requirements of this
title.
(c) Considerations.--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) Use of Broad Authority.--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) Payments Authorized.--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) Rule of Construction.--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.

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