Last Friday, the U.S. Dept. of the Treasury submitted its proposal to promote stability in the U.S. financial markets.

Key components of the Treasury’s initial proposal included:

^.  The authority to issue up to $700 billion of treasury securities to finance the purchase of troubled

residential and commercial mortgage-related assets, including mortgage-backed securities and loans.

The loans must have been originated on or before Sept. 17, 2008 to qualify for the program. The

authority would expire in two years.
^.  Assets will be managed by private asset managers at the direction of the Treasury.

Cash received from liquidating the assets will be returned to the Treasury’s general fund for the benefit

of taxpayers.
^.  Funding for the program will be provided directly by the Treasury from its general fund by increasing

its debt by $700 billion.
^.  Once the program is up and running, Treasury will provide updates to Congress semi-annually.

The proposal also would grant Treasury Secretary Paulson sweeping authority regarding the purchase of

On Tuesday, Congress weighed in on the proposal and members of both parties asked for several additions or refinements, including:

^.  Legislation to help homeowners avoid foreclosure;
^.  Limiting compensation to executives of troubled firms receiving assistance;
^.  Greater oversight than the limited bi-annual reporting mechanism in the current proposal;
^.  Allowing the government to take an ownership stake in companies;
^.  Decreasing the timeframe for the Treasury workout from two years to one; and
^.  Limiting the initial outlay followed by a reassessment early next year prior to deploying additional resources.

On Wednesday, Secretary Paulson, Federal Reserve Chairman Ben Bernake, and members of Congress testified before the Housing Financial Services Committee, where legislators proposed adding an imposed tax on Wall Street firms and banks to help pay the cost of the program, and lessen the burden to taxpayers.

NAR President Richard F. Gaylord recently announced the creation of a Presidential Advisory Group to address this critical issue. Five California REALTORS® were appointed to the 20-person Presidential Advisory Group .

According to C.A.R.’s sources, Congress may work through the weekend and into next week to finalize and pass legislation. C.A.R.’s and NAR’s Leadership Teams are in close contact with elected officials and other key leaders in Washington to ensure that interests of the real estate industry are represented.