Sec. 121. Abolishment of enterprises
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Effective upon the expiration of the 5-year period beginning on the date of the enactment of this Act, the Federal National Mortgage Association Charter Act ( 12 U.S.C. 1716 et seq. ) is repealed and the Federal National Mortgage Association shall have no authority to conduct new business under such charter, except that the provisions of such charter in effect immediately before such repeal shall continue to apply with respect to the rights and obligations of any holders of— outstanding debt obligations of the Federal National Mortgage Association, including any— bonds, debentures, notes, or other similar instruments; capital lease obligations; or obligations in respect of letters of credit, bankers' acceptances, or other similar instruments; or mortgage-backed securities guaranteed by the Federal National Mortgage Association.
Effective upon the expiration of the 5-year period beginning on the date of the enactment of this Act, the Federal Home Loan Mortgage Corporation Act ( 12 U.S.C. 1451 et seq. ) is repealed and the Federal Home Loan Mortgage Corporation shall have no authority to conduct new business under such charter, except that the provisions of such charter in effect immediately before such repeal shall continue to apply with respect to the rights and obligations of any holders of— outstanding debt obligations of the Federal Home Loan Mortgage Corporation, including any— bonds, debentures, notes, or other similar instruments; capital lease obligations; or obligations in respect of letters of credit, bankers' acceptances, or other similar instruments; or mortgage-backed securities guaranteed by the Federal Home Loan Mortgage Corporation.
The full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under any obligation described under paragraphs
(1)and (2). Except for amounts determined necessary for use for winding up the affairs of the enterprises pursuant to subsection (b), all guarantee fee amounts derived from the mortgage guarantee business of the enterprises in existence as of the expiration of the 5-year period beginning on the date of the enactment of this Act shall be deposited into the Treasury of the United States, for purposes of deficit reduction. Upon the expiration of the 5-year period beginning on the date of the enactment of this Act, the Director of the Federal Housing Finance Agency shall, with respect to each enterprise, appoint the Federal Housing Finance Agency as receiver under section 1367 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 and carry out such receivership under the authority of such section and in accordance with this Act and any amendments made by this Act. During the 5-year period that begins upon the date of the enactment of this Act, the Director of the Federal Housing Finance Agency, in consultation with the Secretary of the Treasury, shall take such action, and may prescribe such regulations and procedures, as may be necessary and consistent with the receiverships pursuant to paragraph
(1)to wind down the operations of the enterprises in an orderly manner that complies with the requirements of this Act and any amendments made by this Act. The action and procedures required under paragraph (2)— shall include the establishment and execution of plans to provide for an equitable division, distribution, and liquidation of the assets and liabilities of each enterprise, including any infrastructure, property, including intellectual property, platforms, or any other thing or object of value, provided that such plans shall— provide for the sale, at auction, of the servicing rights to mortgages guaranteed by an enterprise under terms that ensure that a purchaser of such servicing rights shall assume a first loss position in the event of a default under such a mortgage in an amount equal to 20 percent of the aggregate amount of such loss and the Federal Government shall be liable to the purchaser for the remainder of such loss; provide for the sale, at auction, of any other assets of an enterprise having value; and comply with the requirements of this Act and any amendments made by this Act; may provide for establishment of a holding corporation organized under the laws of any State of the United States or the District of Columbia for the purpose of winding down an enterprise; and shall provide for establishment of one or more trusts to which to transfer— outstanding debt obligations of an enterprise; or outstanding mortgages held for the purpose of collateralizing mortgage-backed securities guaranteed by an enterprise. Effective upon the expiration of the 5-year period that begins on the date of the enactment of this Act, the Federal Home Loan Bank Act is amended— in section 10(a)(3)(B) ( 12 U.S.C. 1430(a)(3)(B) ), by striking (including without limitation, mortgage-backed securities issued or guaranteed by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Corporation, and the Government National Mortgage Association) ; and in section 16(a) ( 12 U.S.C. 1436(a) ), by striking , in obligations, participations, or other instruments and all that follows through section 306 of the Federal Home Loan Mortgage Corporation Act, .
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