(4) SYSTEMATIC
LOAN
REVIEW
BY
PARTICI-
PATING
LENDERS
AND
SERVICERS.—Participating 
lenders and servicers shall be required to undertake 
a systematic review of all of the loans under their 
management, to subject each loan to a standard net 
present value test to determine whether it is a suit-
able candidate for modification, and to offer modi-
fications for all loans that pass this test. The pen-
alty for failing to undertake such a systematic re-
view and to carry out modifications where they are 
justified would be disqualification from further par-
ticipation in the program until such a systematic 
program was introduced. 
(5) MODIFICATIONS.—Modifications may in-
clude any of the following: 
(A) Reduction in interest rates and fees. 
(B) Term or amortization extensions. 
(C) Forbearance or forgiveness of prin-
cipal. 
(D) Other similar modifications. 
(6) SIMPLIFIED LOSS SHARE CALCULATION.— 
In order to ensure the administrative efficiency and 
effective operation of the program, the Secretary 
shall define appropriate measures for loss sharing or 
guarantees designed to reduce the risk and loss upon 
VerDate Nov 24 2008 
02:24 Jan 10, 2009
Jkt 079200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H384.IH
H384
wwoods2 on PRODPC68 with BILLS
redefault of modified mortgages in order to provide 
adequate incentives to lenders, servicers, and inves-
tors to modify eligible mortgages and avoid unneces-
sary foreclosures. Interim modifications shall be al-
lowed. 
(7) DE MINIMIS TEST.—To lower administra-
tive costs, a de minimis test shall be used to exclude 
from loss sharing any modification that does not 
lower the monthly payment at least 10 percent. 
(8) 8 YEAR
LIMIT
ON
LOSS
SHARING
PAY-
MENT.—The loss sharing guarantee shall terminate 
at the end of the 8-year period beginning on the 
date the modification was consummated. 
(d) ALTERNATIVE
COMPONENTS.—The Secretary 
may, with the approval of the Board, implement fore-
closure prevention and mitigation actions other than those 
included pursuant to subsection (c) in the comprehensive 
plan initially approved by the Board pursuant to section 
201(a) that the Secretary believes would provide equiva-
lent or greater impact on foreclosure mitigation. 
(e) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be necessary to implement this 
section and prevent evasions thereof. 
(f) TROUBLED ASSETS.—The costs incurred by the 
Federal Government in carrying out the loan modification 
VerDate Nov 24 2008 
02:24 Jan 10, 2009
Jkt 079200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H384.IH
H384
wwoods2 on PRODPC68 with BILLS
program established under this section shall be covered 
out of the funds made available to the Secretary of the 
Treasury under section 118 of the Emergency Economic 
Stabilization Act of 2008 or such other funds as may be 
available to the Secretary. 
(g) REPORT.—Before the end of the 6-month period 
beginning on the date of the enactment of this Act, the 
Secretary shall submit a progress report to the Congress 
containing such findings and such recommendations for 
legislative or administrative action as the Secretary may 
determine to be appropriate. 
SEC. 204. MODIFICATION OF PLAN. 
(a) IN GENERAL.—If the Secretary, in consultation 
with the Chairperson of the Board of Directors of the Fed-
eral Deposit Insurance Corporation and the Secretary of 
Housing and Urban Development, determines at any time 
that modification of the comprehensive plan initially ap-
proved by the Board pursuant to section 201(a) (as such 
plan may subsequently have been modified pursuant to 
this section), or that modification of any component pro-
gram element, is necessary to maximize the prevention of 
foreclosures on residential properties or minimize costs to 
taxpayers of such foreclosure mitigation, the Secretary 
may modify the plan or program element, but only to the 
extent such modifications are approved by the Board. 
VerDate Nov 24 2008 
02:24 Jan 10, 2009
Jkt 079200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H384.IH
H384
wwoods2 on PRODPC68 with BILLS
SEC. 205. SERVICER SAFE HARBOR. 
(a) SAFE HARBOR.— 
(1) LOAN
MODIFICATIONS
AND
WORKOUT 
PLANS.—Notwithstanding any other provision of 
law, and notwithstanding any investment contract 
between a servicer and a securitization vehicle or in-
vestor, a servicer that acts consistent with the duty 
set forth in section 129A(a) of Truth in Lending Act 
(15 U.S.C. 1639a) shall not be liable for entering 
into a loan modification or workout plan with re-
spect to any such mortgage that meets all of the cri-
teria set forth in paragraph (2)(B) to— 
(A) any person, based on that person’s 
ownership of a residential mortgage loan or any 
interest in a pool of residential mortgage loans 
or in securities that distribute payments out of 
the principal, interest and other payments in 
loans on the pool; 
(B) any person who is obligated to make 
payments determined in reference to any loan 
or any interest referred to in subparagraph (A); 
or 
(C) any person that insures any loan or 
any interest referred to in subparagraph (A) 
under any law or regulation of the United 
VerDate Nov 24 2008 
02:24 Jan 10, 2009
Jkt 079200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H384.IH
H384
wwoods2 on PRODPC68 with BILLS
States or any law or regulation of any State or 
political subdivision of any State. 
(2) ABILITY TO MODIFY MORTGAGES.— 
(A) ABILITY.—Notwithstanding any other 
provision of law, and notwithstanding any in-
vestment contract between a servicer and a 
securitization vehicle or investor, a servicer— 
(i) shall not be limited in the ability 
to modify mortgages, the number of mort-
gages that can be modified, the frequency 
of loan modifications, or the range of per-
missible modifications; and 
(ii) shall not be obligated to repur-
chase loans from or otherwise make pay-
ments to the securitization vehicle on ac-
count of a modification, workout, or other 
loss mitigation plan for a residential mort-
gage or a class of residential mortgages 
that constitute a part or all of the mort-
gages in the securitization vehicle, 
if any mortgage so modified meets all of the cri-
teria set forth in subparagraph (B). 
(B) CRITERIA.—The criteria under this 
subparagraph with respect to a mortgage are as 
follows: 
VerDate Nov 24 2008 
02:24 Jan 10, 2009
Jkt 079200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H384.IH
H384
wwoods2 on PRODPC68 with BILLS
(i) Default on the payment of such 
mortgage has occurred or is reasonably 
foreseeable. 
(ii) The property securing such mort-
gage is occupied by the mortgagor of such 
mortgage. 
(iii) The servicer reasonably and in 
good faith believes that the anticipated re-
covery on the principal outstanding obliga-
tion of the mortgage under the particular 
modification or workout plan or other loss 
mitigation action will exceed, on a net 
present value basis, the anticipated recov-
ery on the principal outstanding obligation 
of the mortgage to be realized through 
foreclosure. 
(3) 
APPLICABILITY.—This 
subsection 
shall 
apply only with respect to modifications, workouts, 
and other loss mitigation plans initiated before Jan-
uary 1, 2012. 
(b) LEGAL COSTS.—If an unsuccessful action is 
brought against a servicer by any person described in sub-
paragraph (A), (B), or (C) of subsection (a)(1), such per-
son shall bear any actual legal costs of the servicer, includ-
ing reasonable attorney fees and expert witness fees, in-
VerDate Nov 24 2008 
02:24 Jan 10, 2009
Jkt 079200
PO 00000
Frm 00031
Fmt 6652
Sfmt 6201
E:\BILLS\H384.IH
H384
wwoods2 on PRODPC68 with BILLS
curred in good faith in such action, as determined by the 
court. 
(c) REPORTING.—Each servicer that engages in loan 
modifications or workout plans subject to the safe harbor 
in subsection (a) shall report to the Secretary on a regular 
basis regarding the extent, scope and results of the 
servicer’s modification activities. The Secretary shall pre-
scribe regulations specifying the form, content, and timing 
of such reports. 
(d) DEFINITION OF SECURITIZATION VEHICLES.— 
For purposes of this section, the term ‘‘securitization vehi-
cle’’ means a trust, corporation, partnership, limited liabil-
ity entity, special purpose entity, or other structure that— 
(1) is the issuer, or is created by the issuer, of 
mortgage pass-through certificates, participation cer-
tificates, mortgage-backed securities, or other similar 
securities backed by a pool of assets that includes 
residential mortgage loans; and 
(2) holds such mortgages. 
SEC. 206. REPORT BY CONGRESSIONAL OVERSIGHT PANEL. 
The Congressional Oversight Panel established by 
section 125 of the Emergency Economic Stabilization Act 
of 2008 shall submit a report to the Congress, not later 
than July 1, 2009, regarding— 
VerDate Nov 24 2008 
02:24 Jan 10, 2009
Jkt 079200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H384.IH
H384
wwoods2 on PRODPC68 with BILLS
(1) the actions taken by the Secretary pursuant 
to this title; 
(2) the impact and effectiveness of such actions 
on foreclosures on residential properties; and 
(3) the effectiveness of such actions from the 
standpoint of minimizing costs to the taxpayers. 
TITLE III—AUTO INDUSTRY FI-
NANCING 
AND 
RESTRUC-
TURING 
SEC. 301. SHORT TITLE. 
This title may be cited as the ‘‘TARP Reform and 
Accountability Act of 2009’’. 
SEC. 302. DIRECT LOAN PROVISIONS. 
(a) IN GENERAL.—The Emergency Economic Sta-
bilization Act of 2008 (division A of Public Law 110–343) 
is amended by adding at the end the following: 
‘‘TITLE IV—AUTO INDUSTRY FI-
NANCING 
AND 
RESTRUC-
TURING 
‘‘SEC. 401. PURPOSES. 
‘‘The purposes of this title are— 
‘‘(1) to clarify and confirm the authority and 
facilities to restore liquidity and stability to domestic 
vehicle manufacturers in the United States; and 
VerDate Nov 24 2008 
02:24 Jan 10, 2009
Jkt 079200
PO 00000
Frm 00033
Fmt 6652
Sfmt 6201
E:\BILLS\H384.IH
H384
wwoods2 on PRODPC68 with BILLS
‘‘(2) to ensure that such authority and such fa-
cilities are used in a manner that— 
‘‘(A) results in a viable and competitive do-
mestic automobile industry that minimizes ad-
verse effects on the environment; 
‘‘(B) enhances the ability and the capacity 
of the domestic automobile industry to pursue 
the timely and aggressive production of energy- 
efficient advanced technology vehicles; 
‘‘(C) preserves and promotes the jobs of 
American workers employed directly by the do-
mestic automobile industry and in related in-
dustries; 
‘‘(D) safeguards the ability of the domestic 
automobile industry to provide retirement and 
health care benefits for the industry’s retirees 
and their dependents; and 
‘‘(E) stimulates manufacturing and sales 
of automobiles produced by automobile manu-
facturers in the United States. 
‘‘SEC. 402. PRESIDENTIAL DESIGNATION. 
‘‘(a) DESIGNATION.—The President shall designate 
one or more officers from the Executive Branch having 
appropriate expertise in such areas as economic stabiliza-
tion, financial aid to commerce and industry, financial re-
VerDate Nov 24 2008 
02:24 Jan 10, 2009
Jkt 079200
PO 00000
Frm 00034
Fmt 6652
Sfmt 6201
E:\BILLS\H384.IH
H384
wwoods2 on PRODPC68 with BILLS
structuring, energy efficiency, and environmental protec-
tion (who shall hereinafter in this title be collectively re-
ferred to as the ‘President’s designee’) to carry out the 
purposes of this title, including the facilitation of restruc-
turing necessary to achieve the long-term financial viabil-
ity of domestic automobile manufacturers, who shall serve 
at the pleasure of the President. 
‘‘(b) ADDITIONAL PERSONS.—The President or the 
President’s designee may also employ, appoint, or contract 
with additional persons having such expertise as the Presi-
dent or the President’s designee believes will assist the 
Government in carrying out the purposes of this title. 
‘‘(c) PARTICIPATION
BY
OTHER
AGENCY
PER-
SONNEL.—Other Federal agencies may provide, at the re-
quest of the President’s designee, staff on detail from such 
agencies for purposes of carrying out this title. 
‘‘SEC. 403. BRIDGE FINANCING. 
‘‘(a) IN GENERAL.—The President’s designee shall 
authorize and direct the disbursement of bridge loans or 
enter into commitments for lines of credit to each auto-
mobile manufacturer that submitted a plan to the Con-
gress on December 2, 2008 (hereafter in this title referred 
to as an ‘eligible automobile manufacturer’), and has sub-
mitted a request for such loan or commitment. Nothing 
in this section shall preclude the President’s designee from 
VerDate Nov 24 2008 
02:24 Jan 10, 2009
Jkt 079200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H384.IH
H384
wwoods2 on PRODPC68 with BILLS