article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Real Estate Mortgage Investment Conduit Improvement Act of 2009''. SEC. 2. SPECIAL RULES FOR MODIFICATION OR DISPOSITION OF QUALIFIED MORTGAGES OR FORECLOSURE PROPERTY BY REAL ESTATE MORTGAGE INVESTMENT CONDUITS. (a) In General.--If a REMIC (as defined in section 860D(a) of the Internal Revenue Code of 1986) modifies or disposes of a troubled asset under the Troubled Asset Relief Program established by the Secretary of the Treasury under section 101(a) of the Emergency Economic Stabilization Act of 2008 or under rules established by the Secretary under section 3 of this Act-- (1) such modification or disposition shall not be treated as a prohibited transaction under section 860F(a)(2) of such Code, and (2) for purposes of part IV of subchapter M of chapter 1 of such Code-- (A) an interest in the REMIC shall not fail to be treated as a regular interest (as defined in section 860G(a)(1) of such Code) solely because of such modification or disposition, and (B) any proceeds resulting from such modification or disposition shall be treated as amounts received under qualified mortgages. (b) Termination of REMIC.--For purposes of the Internal Revenue Code of 1986, an entity which is a REMIC (as defined in section 860D(a) of the Internal Revenue Code of 1986) shall cease to be a REMIC if the instruments governing the conduct of servicers or trustees with respect to qualified mortgages (as defined in section 860G(a)(3) of such Code) or foreclosure property (as defined in section 860G(a)(8) of such Code)-- (1) prohibit or restrict (including restrictions on the type, number, percentage, or frequency of modifications or dispositions) such servicers or trustees from reasonably modifying or disposing of such qualified mortgages or such foreclosure property in order to participate in the Troubled Asset Relief Program established by the Secretary of the Treasury under section 101(a) of the Emergency Economic Stabilization Act of 2008 or under rules established by the Secretary under section 3 of this Act, (2) commit to a person other than the servicer or trustee the authority to prevent the reasonable modification or disposition of any such qualified mortgage or foreclosure property, (3) require a servicer or trustee to purchase qualified mortgages which are in default or as to which default is reasonably foreseeable for the purposes of reasonably modifying such mortgages or as a consequence of such reasonable modification, or (4) fail to provide that any duty a servicer or trustee owes when modifying or disposing of qualified mortgages or foreclosure property shall be to the trust in the aggregate and not to any individual or class of investors. (c) Effective Dates.-- (1) Subsection (a).--Subsection (a) shall apply to modification and dispositions after the date of the enactment of this Act, in taxable years ending on or after such date. (2) Subsection (b).-- (A) In general.--Except as provided in subparagraph (B), subsection (b) shall take effect on the date that is 3 months after the date of the enactment of this Act. (B) Exception.--The Secretary of the Treasury may waive the application of subsection (b) in whole or in part for any period of time with respect to any entity if-- (i) the Secretary determines that such entity is unable to comply with the requirements of such subsection in a timely manner, or (ii) the Secretary determines that such waiver would further the purposes of this Act. SEC. 3. ESTABLISHMENT OF A HOME MORTGAGE LOAN RELIEF PROGRAM UNDER THE TROUBLED ASSET RELIEF PROGRAM AND RELATED AUTHORITIES. (a) Establishment.--Not later than 30 days after the date of enactment of this Act, the Secretary of the Treasury shall establish and implement a program under the Troubled Asset Relief Program and related authorities established under section 101(a) of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211(a))-- (1) to achieve appropriate broad-scale modifications or dispositions of troubled home mortgage loans; and (2) to achieve appropriate broad-scale dispositions of foreclosure property. (b) Rules.--The Secretary of the Treasury shall promulgate rules governing the-- (1) reasonable modification of any home mortgage loan pursuant to the requirements of this Act; and (2) disposition of any such home mortgage loan or foreclosed property pursuant to the requirements of this Act. (c) Considerations.--In developing the rules required under subsection (b), the Secretary of the Treasury shall take into consideration-- (1) the debt-to-income ratio, loan-to-value ratio, or payment history of the mortgagors of such home mortgage loans; and (2) any other factors consistent with the intent to streamline modifications of troubled home mortgage loans into sustainable home mortgage loans. (d) Use of Broad Authority.--The Secretary of the Treasury shall use all available authorities to implement the home mortgage loan relief program established under this section, including, as appropriate-- (1) home mortgage loan purchases; (2) home mortgage loan guarantees; (3) making and funding commitments to purchase home mortgage loans or mortgage-backed securities; (4) buying down interest rates and principal on home mortgage loans; (5) principal forbearance; and (6) developing standard home mortgage loan modification and disposition protocols, which shall include ratifying that servicer action taken in anticipation of any necessary changes to the instruments governing the conduct of servicers or trustees with respect to qualified mortgages or foreclosure property are consistent with the Secretary of the Treasury's standard home mortgage loan modification and disposition protocols. (e) Payments Authorized.--The Secretary of the Treasury is authorized to pay servicers for home mortgage loan modifications or other dispositions consistent with any rules established under subsection (b). (f) Rule of Construction.--Any standard home mortgage loan modification and disposition protocols developed by the Secretary of the Treasury under this section shall be construed to constitute standard industry practice.
summary: Real Estate Mortgage Investment Conduit Improvement Act of 2009 - Establishes special rules for modification or disposition of a troubled asset (qualified mortgages or foreclosure property) under the Troubled Asset Relief Program (TARP) by real estate mortgage investment conduits (REMICs). Declares that: (1) such a modification or disposition shall not be treated as a prohibited transaction under the Internal Revenue Code; (2) an interest in the REMIC shall not fail to be treated as a regular interest solely because of such modification or disposition; and (3) any proceeds resulting from such modification or disposition shall be treated as amounts received under qualified mortgages. Specifies terms of the instruments governing the conduct of servicers or trustees with respect to qualified mortgages which shall terminates a REMIC. Directs the Secretary of the Treasury to establish and implement a home mortgage loan relief program under TARP.