ed by striking paragraph (9) and inserting the following 
new paragraphs: 
‘‘(9) TROUBLED ASSETS.—The term ‘troubled 
assets’ means— 
‘‘(A) any residential mortgage, and any se-
curity, obligation, or other instrument that is 
based on or related to such mortgage— 
‘‘(i) is in pre-foreclosure; 
‘‘(ii) with respect to which the bor-
rower has missed at least 2 payments with-
in the last 6 months; or 
‘‘(iii) which is in forbearance; or 
‘‘(B) any other financial instrument that 
the Secretary, after consultation with the Chair-
man 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 de-
termination, in writing, to the appropriate com-
mittees of Congress. 
‘‘(10) REHABILITATED MORTGAGE.—The term 
‘rehabilitated mortgage’ means a mortgage which 
has been restructured, refinanced or otherwise modi-
fied to lower the borrower’s monthly payment— 
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‘‘(A) creating a front-end debt ratio, in-
cluding the cost of mortgage principal, interest, 
taxes, and insurance, of no more than 30 per-
cent of the gross monthly income of the bor-
rower; 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 prac-
tices; 
‘‘(B) is disclosed to the borrower or buyer; 
and 
‘‘(C) is not coerced, extorted, induced, in-
timidated, bribed or otherwise influenced by or 
in collusion with the mortgage lender, mort-
gaged broker, mortgage banker, real estate 
broker, appraisal management company or 
other persons or companies having a vested in-
terest in the transaction.’’. 
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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 amend-
ed 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 As-
sistance 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 re-
habilitated asset to the lender or servicer under cer-
tain conditions. 
‘‘(3) WRITE OFF OF REMAINDER.—That por-
tion 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 Stabiliza-
tion Act of 2008 (division A of Public Law 110–343) is 
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amended by striking paragraph (5) and inserting the fol-
lowing new paragraphs: 
‘‘(5) Issuing such regulations and other guid-
ance 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 determina-
tions as to whether an asset is troubled, what the 
values are that will determine the amount of pur-
chase, 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 amend-
ed— 
(1) by striking subsection (d); 
(2) by redesignating subsection (e) as sub-
section (i); and 
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(3) by inserting after subsection (c) the fol-
lowing 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 bor-
rower 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 per-
cent 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 reduc-
tion in the purchase amount as the Secretary may 
require as a condition for the purchase. 
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