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provement Act of 1991 (12 U.S.C. 4402 
through 4407). 
‘‘(B) MORTGAGES HELD IN TRUST.— 
‘‘(i) IN
GENERAL.—Any mortgage, 
pool of mortgages, or interest in a pool of 
mortgages, held in trust, custodial, or 
agency capacity by a regulated entity for 
the benefit of persons other than the regu-
lated entity shall not be available to satisfy 
the claims of creditors generally. 
‘‘(ii) HOLDING OF MORTGAGES.—Any 
mortgage, pool of mortgages, or interest in 
a pool of mortgages, described under 
clause (i) shall be held by the conservator 
or receiver appointed under this section for 
the beneficial owners of such mortgage, 
pool of mortgages, or interest in a pool of 
mortgages in accordance with the terms of 
the agreement creating such trust, custo-
dial, or other agency arrangement. 
‘‘(iii) LIABILITY OF RECEIVER.—The 
liability of a receiver appointed under this 
section for damages shall, in the case of 
any contingent or unliquidated claim relat-
ing to the mortgages held in trust, be esti-
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mated in accordance set forth in the regu-
lations of the Director. 
‘‘(c) PRIORITY
OF EXPENSES
AND UNSECURED 
CLAIMS.— 
‘‘(1) IN GENERAL.—Unsecured claims against a 
regulated entity, or a receiver, that are proven to the 
satisfaction of the receiver shall have priority in the 
following order: 
‘‘(A) Administrative expenses of the re-
ceiver. 
‘‘(B) Any other general or senior liability 
of the regulated entity and claims of other Fed-
eral home loan banks arising from their pay-
ment obligations (including joint and several 
payment obligations). 
‘‘(C) Any obligation subordinated to gen-
eral creditors. 
‘‘(D) Any obligation to shareholders or 
members arising as a result of their status as 
shareholder or members. 
‘‘(2) CREDITORS
SIMILARLY
SITUATED.—All 
creditors that are similarly situated under paragraph 
(1) shall be treated in a similar manner, except that 
the Agency may make such other payments to credi-
tors necessary to maximize the present value return
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from the sale or disposition or such regulated enti-
ty’s assets or to minimize the amount of any loss re-
alized in the resolution of cases so long as all credi-
tors similarly situated receive not less than the 
amount provided under subsection (e)(2). 
‘‘(3) DEFINITION.—The term ‘administrative 
expenses of the receiver’ shall include the actual, 
necessary costs and expenses incurred by the re-
ceiver in preserving the assets of the regulated entity 
or liquidating or otherwise resolving the affairs of 
the regulated entity. Such expenses shall include ob-
ligations that are incurred by the receiver after ap-
pointment as receiver that the Director determines 
are necessary and appropriate to facilitate the 
smooth and orderly liquidation or other resolution of 
the regulated entity. 
‘‘(d) PROVISIONS RELATING
TO CONTRACTS EN-
TERED INTO BEFORE APPOINTMENT OF CONSERVATOR 
OR RECEIVER.— 
‘‘(1) AUTHORITY TO REPUDIATE CONTRACTS.— 
In addition to any other rights a conservator or re-
ceiver may have, the conservator or receiver for any 
regulated entity may disaffirm or repudiate any con-
tract or lease—
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‘‘(A) to which such regulated entity is a 
party; 
‘‘(B) the performance of which the conser-
vator or receiver, in its sole discretion, deter-
mines to be burdensome; and 
‘‘(C) the disaffirmance or repudiation of 
which the conservator or receiver determines, in 
its sole discretion, will promote the orderly ad-
ministration of the affairs of the regulated enti-
ty. 
‘‘(2) TIMING
OF
REPUDIATION.—The conser-
vator or receiver shall determine whether or not to 
exercise the rights of repudiation under this sub-
section within a reasonable period following such ap-
pointment. 
‘‘(3) CLAIMS
FOR
DAMAGES
FOR
REPUDI-
ATION.— 
‘‘(A) IN GENERAL.—Except as otherwise 
provided under subparagraph (C) and para-
graphs (4), (5), and (6), the liability of the con-
servator or receiver for the disaffirmance or re-
pudiation of any contract pursuant to para-
graph (1) shall be— 
‘‘(i) limited to actual direct compen-
satory damages; and
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‘‘(ii) determined as of— 
‘‘(I) the date of the appointment 
of the conservator or receiver; or 
‘‘(II) in the case of any contract 
or agreement referred to in paragraph 
(8), the date of the disaffirmance or 
repudiation of such contract or agree-
ment. 
‘‘(B) NO
LIABILITY
FOR
OTHER
DAM-
AGES.—For purposes of subparagraph (A), the 
term ‘actual direct compensatory damages’ shall 
not include— 
‘‘(i) punitive or exemplary damages; 
‘‘(ii) damages for lost profits or op-
portunity; or 
‘‘(iii) damages for pain and suffering. 
‘‘(C) MEASURE OF DAMAGES FOR REPUDI-
ATION OF FINANCIAL CONTRACTS.—In the case 
of any qualified financial contract or agreement 
to which paragraph (8) applies, compensatory 
damages shall be— 
‘‘(i) deemed to include normal and 
reasonable costs of cover or other reason-
able measures of damages utilized in the
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industries for such contract and agreement 
claims; and 
‘‘(ii) paid in accordance with this sub-
section and subsection (e), except as other-
wise specifically provided in this section. 
‘‘(4) LEASES UNDER WHICH THE REGULATED 
ENTITY IS THE LESSEE.— 
‘‘(A) IN GENERAL.—If the conservator or 
receiver disaffirms or repudiates a lease under 
which the regulated entity was the lessee, the 
conservator or receiver shall not be liable for 
any damages (other than damages determined 
under subparagraph (B)) for the disaffirmance 
or repudiation of such lease. 
‘‘(B) 
PAYMENTS
OF
RENT.—Notwith-
standing subparagraph (A), the lessor under a 
lease to which that subparagraph applies 
shall— 
‘‘(i) be entitled to the contractual rent 
accruing before the later of the date— 
‘‘(I) the notice of disaffirmance 
or repudiation is mailed; or 
‘‘(II) the disaffirmance or repudi-
ation becomes effective, unless the les-
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sor is in default or breach of the 
terms of the lease; 
‘‘(ii) have no claim for damages under 
any acceleration clause or other penalty 
provision in the lease; and 
‘‘(iii) have a claim for any unpaid 
rent, subject to all appropriate offsets and 
defenses, due as of the date of the appoint-
ment, which shall be paid in accordance 
with this subsection and subsection (e). 
‘‘(5) LEASES UNDER WHICH THE REGULATED 
ENTITY IS THE LESSOR.— 
‘‘(A) IN GENERAL.—If the conservator or 
receiver repudiates an unexpired written lease 
of real property of the regulated entity under 
which the regulated entity is the lessor and the 
lessee is not, as of the date of such repudiation, 
in default, the lessee under such lease may ei-
ther— 
‘‘(i) treat the lease as terminated by 
such repudiation; or 
‘‘(ii) remain in possession of the lease-
hold interest for the balance of the term of 
the lease, unless the lessee defaults under
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the terms of the lease after the date of 
such repudiation. 
‘‘(B) PROVISIONS APPLICABLE TO LESSEE 
REMAINING
IN
POSSESSION.—If any lessee 
under a lease described under subparagraph (A) 
remains in possession of a leasehold interest 
under clause (ii) of such subparagraph— 
‘‘(i) the lessee— 
‘‘(I) shall continue to pay the 
contractual rent pursuant to the 
terms of the lease after the date of 
the repudiation of such lease; and 
‘‘(II) may offset against any rent 
payment which accrues after the date 
of the repudiation of the lease, and 
any damages which accrue after such 
date due to the nonperformance of 
any obligation of the regulated entity 
under the lease after such date; and 
‘‘(ii) the conservator or receiver shall 
not be liable to the lessee for any damages 
arising after such date as a result of the 
repudiation other than the amount of any 
offset allowed under clause (i)(II).
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‘‘(6) CONTRACTS
FOR
THE
SALE
OF
REAL 
PROPERTY.— 
‘‘(A) IN GENERAL.—If the conservator or 
receiver repudiates any contract for the sale of 
real property and the purchaser of such real 
property under such contract is in possession, 
and is not, as of the date of such repudiation, 
in default, such purchaser may either— 
‘‘(i) treat the contract as terminated 
by such repudiation; or 
‘‘(ii) remain in possession of such real 
property. 
‘‘(B) PROVISIONS
APPLICABLE
TO
PUR-
CHASER
REMAINING
IN
POSSESSION.—If any 
purchaser of real property under any contract 
described under subparagraph (A) remains in 
possession of such property under clause (ii) of 
such subparagraph— 
‘‘(i) the purchaser— 
‘‘(I) shall continue to make all 
payments due under the contract after 
the date of the repudiation of the con-
tract; and 
‘‘(II) may offset against any such 
payments any damages which accrue
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after such date due to the non-
performance (after such date) of any 
obligation of the regulated entity 
under the contract; and 
‘‘(ii) 
the 
conservator 
or 
receiver 
shall— 
‘‘(I) not be liable to the pur-
chaser for any damages arising after 
such date as a result of the repudi-
ation other than the amount of any 
offset allowed under clause (i)(II); 
‘‘(II) deliver title to the pur-
chaser in accordance with the provi-
sions of the contract; and 
‘‘(III) have no obligation under 
the contract other than the perform-
ance required under subclause (II). 
‘‘(C) ASSIGNMENT AND SALE ALLOWED.— 
‘‘(i) IN
GENERAL.—No provision of 
this paragraph shall be construed as lim-
iting the right of the conservator or re-
ceiver to assign the contract described 
under subparagraph (A), and sell the prop-
erty subject to the contract and the provi-
sions of this paragraph.