WASHINGTON, DC-The House, today, will vote on a bill–H.R. 384, the TARP Reform and Accountability Act–a bill proposed by Rep. Barney Frank (D-MA)which calls for an allocation of funds for foreclosure mitigation. The money relief would only apply to owner-occupied residences, as well as liability protection for loan servicers who engage in loan modifications. The loan servicers would have to report to Treasury which would be authorized to provide support for commercial real estate loans and commercial mortgage-backed securities.

While the focus of the bill is largely residential, CRE is bidding for a slice of the bailout pie, as well. Autonomous from this bill proposal, however, the Commercial Mortgage Securities Assoc., along with 11 other CRE groups, is lobbying for a piece of the $700 billion in funds that have been set aside to bolster–or rather, salvage–the economy and financial system. Specifically, these organizations are asking Congress to extend the Term Asset-Backed Securities Lending Facility (TALF) to commercial real estate by $20 billion. That money would then be leveraged with a Federal Reserve Bank facility that would range between $200 billion to $500 billion. Locally-based Real Estate Roundtable has been promoting a similar idea.

The proposed Fed facility would be used to jump start commercial lending as well as support commercial real estate loans that are turning over in the near future, Brendan Reilly, SVP of government relations for CMSA, tells GlobeSt.com. “There are liquidity issues that borrowers are facing now–liquidity issues that have not yet become credit default problems. With a minimum investment we can make a lot of headway before the situation becomes truly dire,” he says.

The industry associations have sent a letter to both the House and the Senate requesting the funds. “Currently, banks and the CMBS market represent 75% of all outstanding commercial real estate loans,” the letter stated. “The CMBS market has ceased to function with respect to new issuance, and existing bonds trade at highly excessive spreads, all of which heralds systemic dysfunction.”

Reilly says that Congress has been very receptive to the challenges the industry is facing, if not their proposed solution. “Congress understands the CRE industry is suffering from liquidity issues, and that as the economy faces further difficulties the situation may well turn into one of widespread defaults.”

Reilly says the coalition of groups is not married to the idea of expanding TALF. “It could be a separate facility if that works better.What is important is that an allocation of TARP funds needs to be used for CRE.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information

GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.