President Bush Signs Revised Version of $700B Bailout Package Shortly after House Passes Bill

By Anuradha Kher, Online News EditorWashington, D.C– It was an eventful day today as Wells Fargo & Co. bought Wachovia for about $15.1 billion in stock and the House of Representatives approved today the revised $700 billion bailout package for the financial system by a vote of 263 to 171. Most Democrats favored the bill (172 for and 63 against), while a slighter majority of Republicans voted against (91 for and 108 against). A number of popular tax provisions were added to the bailout bill, which President George W. Bush quickly signed into law. He said it would take some time for the legislation to have its full effect on the economy.Multi-housing supporters have been saying all along that the bailout was needed to prevent economic collapse and to bring back liquidity to the very dry capital markets.Bill Hughes, a senior vice president and managing director of Marcus & Millichap Capital Corp. (MMCC), had told MHN earlier this week, “Whatever the bailout deal is right now, it has to be modified and tweaked. It will eventually be approved because there is no other solution.” In agreement with this, Jay Epstien, chair of DLA Piper’s U.S. Real Estate practice, had told 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 flow of capital so that banks are free to make new loans.” In the end, he had said, “This is a crisis of confidence, of loans and capital markets, and any business that needs credit is affected by the lack of it.”Housing advocates such as the National Multi-Housing Group (NMHC) and the National Association of Homebuilders (NAHB) were also in favor of the bill passing. Jim Arbury, senior vice president of government affairs at NMHC had said, “If and when the bailout package passes, it will no doubt have a positive impact on multifamily. Even though Fannie Mae and Freddie Mac are currently providing a major share of financing to the multifamily sector, conventional financing is also needed, depending on the volume and number of deals being done.”Bob Nielsen, vice chairman and secretary of NAHB and a housing developer, similarly supports the passage of the financial rescue package. He warned of serious consequences for the economy and multi-housing industry if the package did not pass Congress.”We think this bailout is absolutely critical,” Nielsen, who is also president of Shelter Properties Inc., told MHN. “At this time, the credit markets are non-operational and frozen. Without a package to get rid of the bad assets [for the banks], the markets could snowball into a housing depression.”