Editor’s Note: The calls for bailout in the commercial real estate market are growing daily. Many loans are coming due in a environment that is being increasingly difficult to refinance in. I predict this will increase through the fall and by then some sort of bill or policy will come into place. If not then you will see the commercial market implode and that will continue to drag down prices and that will have affects in other parts of the economy.
News (Reuters):
U.S. lawmakers on Friday urged the Treasury Department and the Federal Reserve to extend the duration of a commercial real estate lending support program, saying the sector is poised for a dangerous credit shortfall in the recession-mired economy.
A group of 41 members of the House of Representatives from both political parties asked Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke to extend the Term Asset-Backed Securities Loan Facility through 2010. TALF is due to expire Dec. 31.
“The program’s remaining term does not permit adequate time to develop sufficient volume to address the massive credit shortfall in the sector,” the lawmakers wrote. Rep. Paul Kanjorski initiated the letter, which was signed by powerful House Financial Services panel chairman Barney Frank.
The missive highlights rising concern in Congress about weakness in the commercial real estate industry. Lawmakers grilled Bernanke about the health of the sector at hearings last week.
The amount of troubled commercial real estate loans could double to $100 billion by year end as delinquencies rise and financing remains elusive, Fitch Ratings said on Thursday.
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