SEC. 109. FORECLOSURE MITIGATION EFFORTS.

$700 Billion Draft RESIDENTIAL MORTGAGE LOAN SERVICING

1 SEC. 109. FORECLOSURE MITIGATION EFFORTS.
2 (a) RESIDENTIAL MORTGAGE LOAN SERVICING
3 STANDARDS.—To the extent that the Secretary acquires
4 mortgages, mortgage backed securities, and other assets
5 secured by residential real estate, including multifamily
6 housing, the Secretary shall implement a plan that seeks
7 to maximize assistance for homeowners and use the au8
thority of the Secretary to encourage the servicers of the
9 underlying mortgages, considering net present value to the
10 taxpayer, to take advantage of the HOPE for Home11
owners Program under section 257 of the National Hous12
ing Act or other available programs to minimize fore13
closures. In addition, the Secretary may use loan guaran14
tees and credit enhancements to facilitate loan modifica15
tions to prevent avoidable foreclosures.
16 (b) COORDINATION.—The Secretary shall coordinate
17 with the Corporation, the Board (with respect to any
18 mortgage or mortgage-backed securities or pool of securi19
ties held, owned, or controlled by or on behalf of a Federal
20 reserve bank, as provided in section 110(a)(1)(C)), the
21 Federal Housing Finance Agency, the Secretary of Hous22
ing and Urban Development, and other Federal Govern23
ment entities that hold troubled assets to attempt to iden24
tify opportunities for the acquisition of classes of troubled
25 assets that will improve the ability of the Secretary to im26
prove the loan modification and restructuring process and,
26
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1 where permissible, to permit bona fide tenants who are
2 current on their rent to remain in their homes under the
3 terms of the lease. In the case of a mortgage on a residen4
tial rental property, the plan required under this section
5 shall include protecting Federal, State, and local rental
6 subsidies and protections, and ensuring any modification
7 takes into account the need for operating funds to main8
tain decent and safe conditions at the property.
9 (c) CONSENT TO REASONABLE LOAN MODIFICATION
10 REQUESTS.—Upon any request arising under existing in11
vestment contracts, the Secretary shall consent, where ap12
propriate, and considering net present value to the tax13
payer, to reasonable requests for loss mitigation measures,
14 including term extensions, rate reductions, principal write
15 downs, increases in the proportion of loans within a trust
16 or other structure allowed to be modified, or removal of
17 other limitation on modifications.

http://www.homesbyarea.com

“EMERGENCY ECONOMIC STABILIZATION ACT OF 2008”

SUMMARY OF THE “EMERGENCY ECONOMIC STABILIZATION ACT OF 2008”
I. Stabilizing the Economy
The Emergency Economic Stabilization Act of 2008 (EESA) provides up to $700 billion to the
Secretary of the Treasury to buy mortgages and other assets that are clogging the balance sheets
of financial institutions and making it difficult for working families, small businesses, and other
companies to access credit, which is vital to a strong and stable economy. EESA also establishes
a program that would allow companies to insure their troubled assets.
II. Homeownership Preservation
EESA requires the Treasury to modify troubled loans – many the result of predatory lending
practices – wherever possible to help American families keep their homes. It also directs other
federal agencies to modify loans that they own or control. Finally, it improves the HOPE for
Homeowners program by expanding eligibility and increasing the tools available to the
Department of Housing and Urban Development to help more families keep their homes.
III. Taxpayer Protection
Taxpayers should not be expected to pay for Wall Street’s mistakes. The legislation requires
companies that sell some of their bad assets to the government to provide warrants so that
taxpayers will benefit from any future growth these companies may experience as a result of
participation in this program. The legislation also requires the President to submit legislation
that would cover any losses to taxpayers resulting from this program from financial institutions.
IV. No Windfalls for Executives
Executives who made bad decisions should not be allowed to dump their bad assets on the
government, and then walk away with millions of dollars in bonuses. In order to participate in
this program, companies will lose certain tax benefits and, in some cases, must limit executive
pay. In addition, the bill limits “golden parachutes” and requires that unearned bonuses be
returned.
V. Strong Oversight
Rather than giving the Treasury all the funds at once, the legislation gives the Treasury $250
billion immediately, then requires the President to certify that additional funds are needed ($100
billion, then $350 billion subject to Congressional disapproval). The Treasury must report on the
use of the funds and the progress in addressing the crisis. EESA also establishes an Oversight
Board so that the Treasury cannot act in an arbitrary manner. It also establishes a special
inspector general to protect against waste, fraud and abuse.

Read more by visiting financialservice.house.gov