SECTION 2. BACKGROUND — THE

PROGRAM

.01 In response to the financial issues affecting the banking system and the financial markets due to the contraction in the economy, the Treasury Department, together with other governmental bodies, has implemented a series of initiatives as part of the Financial Stability Plan pursuant to the Emergency Economic Stabilization Act of 2008, Pub. L. No. 110–343, 122 Stat. 3765 (EESA).

.02 One program established by the EESA is the Troubled Asset Relief Program (TARP). TARP authorizes the Treasury Department to purchase troubled assets, including mortgage-backed se

curities. Pursuant to TARP, on March 23, 2009, the Treasury Department, in conjunction with the Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve System, announced the creation of the Program to help the financial system by stimulating the extension of new credit.

.03 The Program includes the Legacy Securities Program. Through the Legacy Securities Program, Treasury will partner with private investors to form PPIPs. A PPIP will acquire certain commercial mortgage-backed securities and certain non-agency residential mortgage-backed securities (collectively, Legacy Securities). See Rev. Proc. 2009–38, 2009–37 I.R.B. 360 (prescribing conditions under which the Internal Revenue Service will not assert that certain entities created in connection with the Program constitute taxable mortgage pools for purposes of section 7701(i)).