Troubled Assets Relief Program Targeted Assets Act of 2009 - Amends the Emergency Economic Stabilization Act of 2008 (EESA) to authorize the Secretary of the Treasury to establish the Troubled Asset Restoration and Assistance Program (TARAP) to allow the Treasury to purchase lender or servicer losses on rehabilitated mortgages, on terms and conditions determined by the Secretary.
Directs the Treasury, acting through TARAP, to pay up to 80% of the difference between the original asset and the rehabilitated asset to the lender or servicer under certain conditions.
Permits the portion of the difference between the original asset and the rehabilitated asset to the lender or servicer that is not paid for by the Secretary to be written to loss.
Requires any regulations and other guidance the Secretary may issue to determine qualifications for an independent appraiser, and make final determinations as to: (1) whether an asset is troubled; (2) what the values are that will determine the amount of purchase; (3) the amount of reductions in the purchase price for certain otherwise ineligible assets; and (4) any other functionality issues required to operate the program.
Authorizes the Secretary, conforming to specified guidelines, to make all necessary rules and determinations regarding documented best efforts, required timelines, and other processes and procedures.
Identifies criteria for eligible assets and eligible lenders or servicers.
Sunsets TARAP on December 31, 2009.
Prohibits, for a 90-day period, a mortgage servicer, or holder, from taking action to initiate a foreclosure, or any action in connection with a foreclosure already instituted (other than to suspend it), with respect to any eligible mortgage of a consumer.
Entitles a consumer to defer initiation of a foreclosure, or any action in connection with one already instituted by any creditor, servicer, or holder of a mortgage, until the end of the 90-day period beginning on the date of the enactment of this Act.
[Congressional Bills 111th Congress]
[From the U.S. Government Printing Office]
[H.R. 421 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 421
To amend the Emergency Economic Stabilization Act of 2008 to restrict
which assets banks can write off as loss for purposes of the Troubled
Assets Relief Program, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 9, 2009
Mr. Meek of Florida introduced the following bill; which was referred
to the Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Emergency Economic Stabilization Act of 2008 to restrict
which assets banks can write off as loss for purposes of the Troubled
Assets Relief Program, 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 ``Troubled Assets Relief Program
Targeted Assets Act of 2009''.
SEC. 2. DEFINITIONS.
Section 3 of the Emergency Economic Stabilization Act of 2008
(division A of Public Law 110-343) is amended by striking paragraph (9)
and inserting the following new paragraphs:
``(9) Troubled assets.--The term `troubled assets' means--
``(A) any residential mortgage, and any security,
obligation, or other instrument that is based on or
related to such mortgage--
``(i) is in pre-foreclosure;
``(ii) with respect to which the borrower
has missed at least 2 payments within the last
6 months; or
``(iii) which is in forbearance; or
``(B) any other financial instrument that the
Secretary, after consultation with the Chairman of the
Board of Governors of the Federal Reserve System,
determines the purchase of which is necessary to
promote financial market stability, but only upon
transmittal of such determination, in writing, to the
appropriate committees of Congress.
``(10) Rehabilitated mortgage.--The term `rehabilitated
mortgage' means a mortgage which has been restructured,
refinanced or otherwise modified to lower the borrower's
monthly payment--
``(A) creating a front-end debt ratio, including
the cost of mortgage principal, interest, taxes, and
insurance, of no more than 30 percent of the gross
monthly income of the borrower; or
``(B) to a term deemed affordable by the borrower
after full disclosure by the lender and pursuant to
rules as may be established by the Secretary.
``(11) Independent appraiser.--The term `independent
appraiser' means a person who--
``(A) is licensed pursuant to the laws and
regulations of the State where the person practices;
``(B) is disclosed to the borrower or buyer; and
``(C) is not coerced, extorted, induced,
intimidated, bribed or otherwise influenced by or in
collusion with the mortgage lender, mortgaged broker,
mortgage banker, real estate broker, appraisal
management company or other persons or companies having
a vested interest in the transaction.''.
SEC. 3. LIMIT ON AUTHORITY TO WRITE OFF LOSSES.
Section 101 of the Emergency Economic Stabilization Act of 2008
(division A of Public Law 110-343) is amended by striking subsection
(a) and inserting the following new subsection:
``(a) Authority.--
``(1) In general.--The Secretary is authorized to establish
the Troubled Asset Restoration and Assistance Program
(hereafter in this title referred to as the `TARAP') to allow
the Treasury to purchase lender or servicer `losses' on
rehabilitated mortgages, on such terms and conditions as are
defined in this Act and determined by the Secretary.
``(2) Authority to purchase.--Through the TARAP, the
Treasury shall pay up to 80 percent of the difference between
the original asset and the rehabilitated asset to the lender or
servicer under certain conditions.
``(3) Write off of remainder.--That portion of the
difference between the original asset and the rehabilitated
asset to the lender or servicer that is not paid for by the
Secretary under paragraph (2) may be written to loss.''.
SEC. 4. REGULATIONS AND GUIDELINES.
Section 101(c) of the Emergency Economic Stabilization Act of 2008
(division A of Public Law 110-343) is amended by striking paragraph (5)
and inserting the following new paragraphs:
``(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 title including determining
qualifications for an independent appraiser, making the final
determinations as to whether an asset is troubled, what the
values are that will determine the amount of purchase, the
amount of reductions in the purchase price for purposes of
subsection (d)(2), and any other functionality issues required
to operate the program.
``(6) Conforming to guidelines established in subsection
(g), the Secretary is authorized to make all necessary rules
and determinations regarding documented best efforts, required
timelines, and other processes and procedures.''.
SEC. 5. ELIGIBLE ASSET.
Section 101 of the Emergency Economic Stabilization Act of 2008
(division A of Public Law 110-343) is amended--
(1) by striking subsection (d);
(2) by redesignating subsection (e) as subsection (i); and
(3) by inserting after subsection (c) the following new
subsections:
``(d) Eligible Assets.--
``(1) In general.--An asset is eligible for TARAP if--
``(A) it is the borrower's primary residence; and
``(B) it--
``(i) is a troubled asset, as defined in
section 3(9); or
``(ii) it was a troubled asset but has been
rehabilitated by the servicer or lender (as
defined in section 3(10)) on or after October
3, 2008, and allowing the borrower to remain in
the borrower's home.
``(2) Assets not included.--An asset is not eligible for
TARAP if--
``(A) it was valued at more than 150 percent of the
current fair market value; and
``(B) the original value was assessed solely by the
lender's appraiser,
unless the servicer or lender agrees to such reduction in the
purchase amount as the Secretary may require as a condition for
the purchase.
``(f) Eligible Lender or Servicer.--A lender or servicer is
eligible for TARAP assistance if--
``(1) the lender or servicer has agreed to full disclosure
requirements as may be established by the Secretary; or
``(2) the lender or servicer has agreed to use an
independent appraiser and standard appraisal practices as may
be established by the Secretary;
``(g) Program Guidelines.--
``(1) TARAP shall pay a servicer or lender up to 80 percent
of the difference between the original asset and rehabilitated
asset pursuant to such regulations as may be prescribed by the
Secretary.
``(2) The servicer or lender shall use documented best
efforts, prior to foreclosure, to work with the borrower to
create an affordable front-end debt ratio of up to 30 percent
of the borrower's gross monthly income.
``(3) The Secretary may establish mechanisms to provide for
those assets which cannot be rehabilitated under the preceding
guidelines.
``(h) Program Termination.--All authority under this section ceases
no later than December 31, 2009.''.
SEC. 6. DEFERRAL OF ALL FORECLOSURES ON ANY PRINCIPAL DWELLING OF A
CONSUMER FOR A 90-DAY PERIOD.
(a) In General.--Notwithstanding any provision of any State or
Federal law, after the date of the enactment of this Act, no creditor,
servicer, or holder of such mortgage, or any other person acting on
behalf of any such creditor, servicer, or holder, may take any action
to initiate a foreclosure, whether judicial or nonjudicial, or any
action in connection with a foreclosure already instituted other than
to suspend such foreclosure, with respect to any eligible mortgage of a
consumer, until the end of the 90-day period beginning on the date of
the enactment of this Act.
(b) Action by Consumer.--
(1) In general.--After the date of the enactment of this
Act, any consumer shall have the right to defer any initiation
of a foreclosure, whether judicial or nonjudicial, or any
action in connection with a foreclosure already instituted,
including any foreclosure sale, with respect to any eligible
mortgage by any creditor, servicer, or holder of such mortgage,
or any other person acting on behalf of any such creditor,
servicer, or holder, until the end of the 90-day period
beginning on the date of the enactment of this Act.
(2) Enforcement of right.--Any consumer may defend against
a foreclosure or bring an action in any court of competent or
general jurisdiction to compel compliance with the right of the
consumer under paragraph (1) to defer any initiation of a
foreclosure or any action in connection with a foreclosure
already instituted, including any foreclosure sale, with
respect to any eligible mortgage.
(c) Rule of Construction.--No provision of this section shall be
construed as affecting or altering the obligations of the consumer
under the terms of the eligible mortgage notwithstanding any deferral
of foreclosure.
(d) Eligible Mortgage Defined.--For purposes of this section, the
term ``eligible mortgage'' means any residential mortgage loan to any
consumer that constitutes a first lien on the dwelling or real property
securing the loan which constitutes, or on which is located, the
principal residence of the consumer.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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