I 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Troubled Assets Relief 

5 Program Targeted Assets Act of 2009’’. 

6 SEC. 2. DEFINITIONS. 

7 Section 3 of the Emergency Economic Stabilization 

8 Act of 2008 (division A of Public Law 110–343) is amendVerDate Nov 24 2008 04:04 Jan 12, 2009 Jkt 079200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H421.IH H421

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1 ed by striking paragraph (9) and inserting the following 

2 new paragraphs: 

3 ‘‘(9) TROUBLED ASSETS.—The term ‘troubled 

4 assets’ means— 

5 ‘‘(A) any residential mortgage, and any se6 curity, obligation, or other instrument that is 

7 based on or related to such mortgage— 

8 ‘‘(i) is in pre-foreclosure; 

9 ‘‘(ii) with respect to which the bor10 rower has missed at least 2 payments with11 in the last 6 months; or 

12 ‘‘(iii) which is in forbearance; or 

13 ‘‘(B) any other financial instrument that 

14 the Secretary, after consultation with the Chair15 man of the Board of Governors of the Federal 

16 Reserve System, determines the purchase of 

17 which is necessary to promote financial market 

18 stability, but only upon transmittal of such de19 termination, in writing, to the appropriate com20 mittees of Congress. 

21 ‘‘(10) REHABILITATED MORTGAGE.—The term 

22 ‘rehabilitated mortgage’ means a mortgage which 

23 has been restructured, refinanced or otherwise modi24 fied to lower the borrower’s monthly payment— 


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1 ‘‘(A) creating a front-end debt ratio, in2 cluding the cost of mortgage principal, interest, 

3 taxes, and insurance, of no more than 30 per4 cent of the gross monthly income of the bor5 rower; or 

6 ‘‘(B) to a term deemed affordable by the 

7 borrower after full disclosure by the lender and 

8 pursuant to rules as may be established by the 

9 Secretary. 

10 ‘‘(11) INDEPENDENT APPRAISER.—The term 

11 ‘independent appraiser’ means a person who— 

12 ‘‘(A) is licensed pursuant to the laws and 

13 regulations of the State where the person prac14 tices; 

15 ‘‘(B) is disclosed to the borrower or buyer; 

16 and 

17 ‘‘(C) is not coerced, extorted, induced, in18 timidated, bribed or otherwise influenced by or 

19 in collusion with the mortgage lender, mort20 gaged broker, mortgage banker, real estate 

21 broker, appraisal management company or 

22 other persons or companies having a vested in23 terest in the transaction.’’. 


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1 SEC. 3. LIMIT ON AUTHORITY TO WRITE OFF LOSSES. 

2 Section 101 of the Emergency Economic Stabilization 

3 Act of 2008 (division A of Public Law 110–343) is amend4 ed by striking subsection (a) and inserting the following 

5 new subsection: 

6 ‘‘(a) AUTHORITY.— 

7 ‘‘(1) IN GENERAL.—The Secretary is authorized 

8 to establish the Troubled Asset Restoration and As9 sistance Program (hereafter in this title referred to 

10 as the ‘TARAP’) to allow the Treasury to purchase 

11 lender or servicer ‘losses’ on rehabilitated mortgages, 

12 on such terms and conditions as are defined in this 

13 Act and determined by the Secretary. 

14 ‘‘(2) AUTHORITY TO PURCHASE.—Through the 

15 TARAP, the Treasury shall pay up to 80 percent of 

16 the difference between the original asset and the re17 habilitated asset to the lender or servicer under cer18 tain conditions. 

19 ‘‘(3) WRITE OFF OF REMAINDER.—That por20 tion of the difference between the original asset and 

21 the rehabilitated asset to the lender or servicer that 

22 is not paid for by the Secretary under paragraph (2) 

23 may be written to loss.’’. 

24 SEC. 4. REGULATIONS AND GUIDELINES. 

25 Section 101(c) of the Emergency Economic Stabiliza26 tion Act of 2008 (division A of Public Law 110–343) is 


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1 amended by striking paragraph (5) and inserting the fol2 lowing new paragraphs: 

3 ‘‘(5) Issuing such regulations and other guid4 ance as may be necessary or appropriate to define 

5 terms or carry out the authorities or purposes of 

6 this title including determining qualifications for an 

7 independent appraiser, making the final determina8 tions as to whether an asset is troubled, what the 

9 values are that will determine the amount of pur10 chase, the amount of reductions in the purchase 

11 price for purposes of subsection (d)(2), and any 

12 other functionality issues required to operate the 

13 program. 

14 ‘‘(6) Conforming to guidelines established in 

15 subsection (g), the Secretary is authorized to make 

16 all necessary rules and determinations regarding 

17 documented best efforts, required timelines, and 

18 other processes and procedures.’’. 

19 SEC. 5. ELIGIBLE ASSET. 

20 Section 101 of the Emergency Economic Stabilization 

21 Act of 2008 (division A of Public Law 110–343) is amend22 ed— 

23 (1) by striking subsection (d); 

24 (2) by redesignating subsection (e) as sub25 section (i); and 


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1 (3) by inserting after subsection (c) the fol2 lowing new subsections: 

3 ‘‘(d) ELIGIBLE ASSETS.— 

4 ‘‘(1) IN GENERAL.—An asset is eligible for 

5 TARAP if— 

6 ‘‘(A) it is the borrower’s primary residence; 

7 and 

8 ‘‘(B) it— 

9 ‘‘(i) is a troubled asset, as defined in 

10 section 3(9); or 

11 ‘‘(ii) it was a troubled asset but has 

12 been rehabilitated by the servicer or lender 

13 (as defined in section 3(10)) on or after 

14 October 3, 2008, and allowing the bor15 rower to remain in the borrower’s home. 

16 ‘‘(2) ASSETS NOT INCLUDED.—An asset is not 

17 eligible for TARAP if— 

18 ‘‘(A) it was valued at more than 150 per19 cent of the current fair market value; and 

20 ‘‘(B) the original value was assessed solely 

21 by the lender’s appraiser, 

22 unless the servicer or lender agrees to such reduc23 tion in the purchase amount as the Secretary may 

24 require as a condition for the purchase. 


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1 ‘‘(f) ELIGIBLE LENDER OR SERVICER.—A lender or 

2 servicer is eligible for TARAP assistance if— 

3 ‘‘(1) the lender or servicer has agreed to full 

4 disclosure requirements as may be established by the 

5 Secretary; or 

6 ‘‘(2) the lender or servicer has agreed to use an 

7 independent appraiser and standard appraisal prac8 tices as may be established by the Secretary; 

9 ‘‘(g) PROGRAM GUIDELINES.— 

10 ‘‘(1) TARAP shall pay a servicer or lender up 

11 to 80 percent of the difference between the original 

12 asset and rehabilitated asset pursuant to such regu13 lations as may be prescribed by the Secretary. 

14 ‘‘(2) The servicer or lender shall use docu15 mented best efforts, prior to foreclosure, to work 

16 with the borrower to create an affordable front-end 

17 debt ratio of up to 30 percent of the borrower’s 

18 gross monthly income. 

19 ‘‘(3) The Secretary may establish mechanisms 

20 to provide for those assets which cannot be rehabili21 tated under the preceding guidelines. 

22 ‘‘(h) PROGRAM TERMINATION.—All authority under 

23 this section ceases no later than December 31, 2009.’’. 


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1 SEC. 6. DEFERRAL OF ALL FORECLOSURES ON ANY PRIN2 CIPAL DWELLING OF A CONSUMER FOR A 90- 

3 DAY PERIOD. 

4 (a) IN GENERAL.—Notwithstanding any provision of 

5 any State or Federal law, after the date of the enactment 

6 of this Act, no creditor, servicer, or holder of such mort7 gage, or any other person acting on behalf of any such 

8 creditor, servicer, or holder, may take any action to ini9 tiate a foreclosure, whether judicial or nonjudicial, or any 

10 action in connection with a foreclosure already instituted 

11 other than to suspend such foreclosure, with respect to 

12 any eligible mortgage of a consumer, until the end of the 

13 90-day period beginning on the date of the enactment of 

14 this Act. 

15 (b) ACTION BY CONSUMER.— 

16 (1) IN GENERAL.—After the date of the enact17 ment of this Act, any consumer shall have the right 

18 to defer any initiation of a foreclosure, whether judi19 cial or nonjudicial, or any action in connection with 

20 a foreclosure already instituted, including any fore21 closure sale, with respect to any eligible mortgage by 

22 any creditor, servicer, or holder of such mortgage, or 

23 any other person acting on behalf of any such cred24 itor, servicer, or holder, until the end of the 90-day 

25 period beginning on the date of the enactment of 

26 this Act. 


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1 (2) ENFORCEMENT OF RIGHT.—Any consumer 

2 may defend against a foreclosure or bring an action 

3 in any court of competent or general jurisdiction to 

4 compel compliance with the right of the consumer 

5 under paragraph (1) to defer any initiation of a 

6 foreclosure or any action in connection with a fore7 closure already instituted, including any foreclosure 

8 sale, with respect to any eligible mortgage. 

9 (c) RULE OF CONSTRUCTION.—No provision of this 

10 section shall be construed as affecting or altering the obli11 gations of the consumer under the terms of the eligible 

12 mortgage notwithstanding any deferral of foreclosure. 

13 (d) ELIGIBLE MORTGAGE DEFINED.—For purposes 

14 of this section, the term ‘‘eligible mortgage’’ means any 

15 residential mortgage loan to any consumer that con16 stitutes a first lien on the dwelling or real property secur17 ing the loan which constitutes, or on which is located, the 

18 principal residence of the consumer. 

Æ 


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