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Section 1. Short Title.

This Act may be cited as ____________________.

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.–The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions.–The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for–

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.

Sec. 4. Reports to Congress.

Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.

Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.

(a) Exercise of Rights.–The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.

(b) Management of Mortgage-Related Assets.–The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.

(c) Sale of Mortgage-Related Assets.–The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.

(d) Application of Sunset to Mortgage-Related Assets.–The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time

Sec. 7. Funding.

For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Sec. 9. Termination of Authority.

The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.

Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

Sec. 11. Credit Reform.

The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.

Sec. 12. Definitions.

For purposes of this section, the following definitions shall apply:

(1) Mortgage-Related Assets.–The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

(2) Secretary.–The term “Secretary” means the Secretary of the Treasury.

(3) United States.–The term “United States” means the States, territories, and possessions of the United States and the District of Columbia

2a. SecTreas can decide to buy mortgage related assets and he'll do it on his terms. This will be one of three people: Hank Paulson, current SecTreas, Phil Gramm, McCain's prospective SecTreas, or Obama's pick. Given that Gramm got America into this mess in the Nineties, lobbying for deregulation, this is pretty scary. Also, it will apply only to American Banks, probably the only saving grace of this entire piece of legislation.

2b1. He'll pick who he wants and tell them what to do. This part makes no mention of necessary experience.

2b2. He can make contracts that may have been previously been illegal.

2b3. Banks become federalised, and have to do what they are told by the Government.

2b4. ...Allows the creation of federal hedge funds? I'm not too clear on this.

2b5. Lets SecTreas define the limits of the Act.

3.1 and 3.2 - I love the way they clearly show who they think is more important here. Financial Markets and banking system, and then the taxpayer.

4. Once the Act is used, SecTreas must report to the Ways and Means, Budget, and Financial Services Committees (HoR), and the Budget, Finance, and Banking, Housing, and Urban Affairs Committees of the Senate, and provide updates twice a year after that.

5a. SecTreas has authority of the fine print in your mortgage. If it's foreclosed, your house becomes Federal Property.

5b. ...This looks like the Federal Government gets the interest you pay on the mortgage, and SecTreas decides what to do with it.

5c. SecTreas can sell your mortgage to anyone he chooses to, and at the price he demands, at any time. Which, incidentally, is what got us into this mess in the first place. WAY TO MISS THE FUCKING POINT.

5d. I may be completely misreading this, but Section 9 basically says that this Act expires two years after it is enacted. %c is saying that the provisions of Section 9 do not apply to the other three subsections of 5.

Translated? This two-year expiry is bullshit.

6. The upper limit is $700billion at any one time. But it's not all in one go. It can be made of many small transactions, so long as the total does not exceed £700bn.

7. I have no clue. I can't comprehend that.

And now, for the big one:

8. This Act cannot be challenged in any court of law, and is therefore unable to have its Constitutionality challenged in the Supreme Court. Marbury v. Madison will not apply. There is no oversight of what SecTreas can do. In short, he'll do what he wants to do, and there's not a damned thing you or anyone else can do about it.

9. The expiry date. Which, as noted above, is largely symbolic, and completely ineffective.

10. A previous piece of legislation that defined the upper limit of national debt has been amended, and the new figure is £11.3 trillion.

The American Government has had to extend its national debt to take into account the effects of this piece of legislation. It's like you extending your overdraft, and borrowing money from yourself.

11. The Federal Credit Reform Act (1990) will decide the price of "mortgage-related assets". Which is legislation eighteen years old.

12. Definitions.

To summarise:

SecTreas will decide what assets to buy, at what price to buy them, and how the contracts are worded. He cannot go over $700bn, but there is nothing in the way of oversight, and Section 8 seems designed specifically to shield it from Judicial Review and/or Congressional oversight. Banks will become Federalised, and foreclosures will mean that property named on mortgage papers becomes Federal Property. The two-year time limit does not apply to any "mortgage-related assets" bought in the two year period.

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