GSEs Fannie Mae andFreddie MacPresident George Bush isexpected to sign it immediately

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Except for the plan to stabilized Fannie Mae and Freddie Mac,this bill targets the residential real estate market. Still,though, CRE will feel its impact, no matter how indirectly, andreceive a much-needed boost. It is possible, for instance, thatsecuritization of residential mortgages could be jump-started bythe legislation, Gibran Nicholas, chairman of the CMPS Institute,an organization that certifies mortgage bankers and brokers, tellsGlobeSt.com.

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"A lot of companies have been waiting on sidelines, waiting tosee what new legislation will develop," Gibran says. He says thatthe bill's limits on liabilities will give loan servicers morefreedom in deciding what to with troubled loans. "If a servicerdetermined that the net present value of the anticipated recoverythrough a loan modification or work-out plan is equal or greaterthan what they get out of foreclosure, then that could deemed to beacting in best interest of clients," he says. The caveat is thatthe bill is designed to aid owner-occupied home owners, he notes,so the impact will be limited. "So it might jump start some RMBS,which is better than nothing."

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The housing bill may also inspire enough confidence in thelender community so that credit is loosened for CRE developers,says Mark Metz, SVP of the Chicago Deferred Exchange Co., afinancial services firm that brokers 1031 transactions forcommercial investors. "One of the biggest problems in all themarkets right now is that credit is drying up," he tellsGlobeSt.com. "You can't [finance] good deals, let alone shakydeals. There is a dearth of available credit, and the cap ratesbeing calculated won't support the prices that are beingasked."

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Another ripple affect for the CRE industry, says JohnDriscoll,president of Alter+Care, a healthcare real estatedevelopment firm, is its impact in local labor markets. "Employersare not going to expand or relocate their business in markets wherethere's difficulties in the housing market, due to the diminishedlabor pool," he tells GlobeSt.com. "If I had a business right now,I wouldn't go to Central Florida, Sacramento, Vegas. All of thoselocations have chronic foreclosures. Because the Feds are steppingin and providing a floor of support, which employers -- be theyretailers, healthcare providers, anything -- will considerexpanding their businesses. While this is not the end solution,it's a good first step that helps stabilize the jittery laboreconomy."

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The most immediate impact the CRE will see from the bill, ofcourse, is the life line extended to Fannie and Freddie – essentialsources of liquidity in the multifamily market now. However thisbailout – coupled with the government's other extraordinarybailout, that ofBear Stearns in March – could come at a high cost, both inmoney and in the long-term confidence in, and effectiveness of theGSEs, some critics say.

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"The expanded access to the Fed, both in terms of liquidity andpotential equity investment address immediate needs," Jim LeBaron,senior director at international business advisory firm, BBK, tellsGlobeSt.com. But "one can surmise that the market's cool reception[to it] is an indicator of perceived long-term effectiveness." Noone should look to this as a "healing", he adds, "rather it maystop the bleeding and prevent a total melt-down of theentities."

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LeBaron says he is skeptical of the "Bigger is Better" attitudetowards the GSE's size and the government's actions andinvolvement. "These entities have been allowed to grow to the pointof we can't afford to let them fail' [has become] the persuasiveargument. Also, their lobbying strength fosters huge questions asto legislative bias, hence conflicts of interest," he says.

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