I 

113TH CONGRESS 

1ST SESSION H. R. 3754 

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 

DECEMBER 12, 2013 

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. 

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 ‘‘Freddie Mac REMIC 

5 Reform Act of 2013’’. 


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1 SEC. 2. EXERCISE OF CLEAN-UP CALL OPTIONS. 

2 Subtitle B of title XIII of the Housing and Commu3 nity Development Act of 1992 (12 U.S.C. 4611 et seq.) 

4 is amended by adding at the end the following new section: 

5 ‘‘SEC. 1369F. EXERCISE OF CLEAN-UP CALL OPTIONS. 

6 ‘‘(a) REQUIREMENT.—In complying with any restric7 tion under law, regulation, order, or agreement with the 

8 Director or the Secretary of the Treasury on the mort9 gage-backed securities issued by the Federal Home Loan 

10 Mortgage Corporation, such Corporation or, during the 

11 term of any conservatorship or receivership of such enter12 prise pursuant to section 1367, the Director, shall in the 

13 case of any mortgage-backed security with a clean-up call 

14 option (as such term is defined in subsection (d) of this 

15 section) that is issued by such Corporation, exercise any 

16 option under which the residual holder is willing to share 

17 not less than 50 percent of any excess proceeds resulting 

18 from exercise of such option or right with the Agency as 

19 conservator or receiver of such Corporation, if such pro20 ceeds benefit the taxpayers of the United States. 

21 ‘‘(b) PROHIBITION REGARDING ISSUANCE OF NEW

22 SECURITIES.—The Director shall prohibit the Federal 

23 Home Loan Mortgage Corporation and the Federal Na24 tional Mortgage Association from issuing, after the date 

25 of the enactment of this section, any mortgage-backed se26 curity with a clean-up call option. 


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1 ‘‘(c) USE OF PROCEEDS TO REDUCE DEFICIT.—The 

2 Director shall ensure that any excess proceeds received as 

3 a result of the exercise of any clean-up call option shall 

4 be used only to reduce the budget deficit of the Federal 

5 Government. 

6 ‘‘(d) DEFINITIONS.— 

7 ‘‘(1) MORTGAGE-BACKED SECURITIES.—The 

8 term ‘mortgage-backed securities’ means debt obliga9 tions issued in the form of participation certificates, 

10 collateralized mortgage obligations, mortgage-backed 

11 commercial paper, and real estate mortgage invest12 ment conduits. 

13 ‘‘(2) MORTGAGE-BACKED SECURITY WITH A

14 CLEAN-UP CALL OPTION.—The term ‘mortgage15 backed security with a clean-up call option’ means 

16 any mortgage-backed security under which there is 

17 an option or right to redeem all remaining classes of 

18 such security at such time when the amount of the 

19 aggregate remaining principal would be less than the 

20 amount of the optional redemption or clean-up call 

21 percentage, as defined in the applicable offering cir22 cular or offering circular supplement. 

23 ‘‘(3) EXCESS PROCEEDS.—The term ‘excess 

24 proceeds’ means, with respect to exercise of any 

25 clean-up call option, the excess of the net proceeds 


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1 from the sale of the collateral underlying the mort2 gage-backed security with such option, and the re3 demption price as defined in the applicable offering 

4 circular or offering circular supplement.’’. 

Æ 


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