Financial Bailout Package Update: Passes Senate, House May Vote by Friday

By Anuradha Kher, Online News EditorNew York–The Senate voted 74-25 last night for the $700 billion economic bailout plan, the House rejection of which caused panic among investors and the stock markets to plunge on Monday. So far, most multifamily executives have endorsed the bill, many saying that something needs to be done to ease the credit crunch.Patrick S Madore, vice president, mortgage banking at Thomas D. Wood & Co., agrees for the most part except, he tells MHN, “I am not a 100 percent behind this package. The politicians are using this as a vehicle to push a lot of other laws along, including pork barrel spending, and I don’t agree with that.”At the same time, he says, “I know something needs to be done. This can’t go on the way it is. We have lenders dropping out everyday and quoting outrageous interest rates.” Madore’s company does commercial real estate mortgage banking and has felt, “a 100 percent impact by this crisis. As it is, the CMBS market is gone and I don’t know if it will come back.”He says lending has frozen and builders are having to pay for construction costs with cash. Jay Epstien, chair of DLA Piper’s U.S. Real Estate practice, tells MHN, “I hope this bailout eases some of the problems for the commercial real estate market. It’s too early to tell but I am optimistic. Hopefully, it passes next week, the government can buy all those bad, toxic loans, move them out of the system and increase the flow of capital so that banks are free to make new loans.” In the end, he says, “This is a crisis of confidence, of loans and capital markets, and any business that needs credit is affected by the lack of it.”Meanwhile, Real Estate Roundtable President and CEO Jeffrey DeBoer issued a statement, saying, “This legislation is much needed. It will have a positive impact on the financial markets, help stabilize the economy and ensure credit flows to businesses, property owners and consumers. Action to help liquefy the credit markets is critical to our economy. It will help make sure that development and construction projects are not delayed or cancelled, which would cause unnecessary job losses. It is also critical to help protect commercial property values, thereby forestalling increased pressure on local budgets.”