Freddie Mac REMIC Reform Act of 2015

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. Short title This Act may be cited as the Freddie Mac REMIC Reform Act of 2015 2. Exercise of clean-up call options Subtitle B of title XIII of the Housing and Community Development Act of 1992 ( 12 U.S.C. 4611 et seq. 1369F. Exercise of clean-up call options (a) Requirement In complying with any restriction under law, regulation, order, or agreement with the Director or the Secretary of the Treasury on the mortgage-backed securities issued by the Federal Home Loan Mortgage Corporation, such Corporation or, during the term of any conservatorship or receivership of such enterprise pursuant to section 1367, the Director, shall in the case of any mortgage-backed security with a clean-up call option (as such term is defined in subsection (d) of this section) that is issued by such Corporation, exercise any option under which the residual holder is willing to share not less than 50 percent of any excess proceeds resulting from exercise of such option or right with the Agency as conservator or receiver of such Corporation, if such proceeds benefit the taxpayers of the United States. (b) Prohibition regarding issuance of new securities The Director shall prohibit the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association from issuing, after the date of the enactment of this section, any mortgage-backed security with a clean-up call option. (c) Use of proceeds To reduce deficit The Director shall ensure that any excess proceeds received as a result of the exercise of any clean-up call option shall be used only to reduce the budget deficit of the Federal Government. (d) Definitions (1) Mortgage-backed securities The term mortgage-backed securities (2) Mortgage-backed security with a clean-up call option The term mortgage-backed security with a clean-up call option (3) Excess proceeds The term excess proceeds .

Summary: Freddie Mac REMIC Reform Act of 2015 Amends the Housing and Community Development Act of 1992 with respect to the exercise of options on mortgage-backed securities by the Federal Home Loan Mortgage Corporation (Freddie Mac) or, during the term of any conservatorship or receivership of Freddie Mac, the Director of the Federal Housing Finance Agency (FHFA). Directs Freddie Mac (or FHFA as its conservator or receiver) to exercise any option on a mortgage-backed security with a clean-up call option Freddie Mac has issued if the residual holder of the security is willing to share at least 50% of any excess proceeds from the exercise of the option with FHFA as conservator or receiver, if such proceeds benefit the taxpayers of the United States. (A clean-up call option allows a transferor of assets, in this case mortgage assets, to buy them back after the outstanding asset values have been reduced substantially.) Defines mortgage-backed security as debt obligations issued in the form of participation certificates, collateralized mortgage obligations, mortgage-backed commercial paper, and real estate mortgage investment conduits. Defines mortgage-backed security with a clean-up call option as any mortgage-backed security under which there is an option or right to redeem all remaining classes of the security whenever the aggregate remaining principal of the mortgage would be less than the optional redemption or clean-up call percentage. Directs the Director to prohibit Freddie Mac and the Federal National Mortgage Association (Fannie Mae) from issuing any mortgage-backed security with a clean-up call option. Directs the Director to ensure that any excess proceeds received as a result of the exercise of any clean-up call options be used only to reduce the budget deficit of the federal government.