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WASHINGTON, DC-The Real Estate Roundtable is proposing another government initiative to bolster the commercial real estate industry: a facility that would support lending by providing banks with some assurance–specifically, government insurance–that a secondary market would be available for the loans. Roundtable president and CEO Jeff DeBoer outlined the concept in a conference call Wednesday, held to discuss the findings in the organization’s latest Sentiment Survey.

“Serious thought needs to be given to establishing a new credit facility to encourage lenders to make new loans,” he said. DeBoer, who first floated the idea a few weeks ago in Congressional testimony, said the idea is similar to how the FDIC’s own insurance program works, in which banks pay a fee for insurance for their deposits. Thus, consumers feel confident entrusting their savings to the institution because of the FDIC insurance.

Under DeBoer’s proposed plan, loan orginators would pay a fee for insurance on the loans they are issuing. “The idea is that the securities sold against these loans in secondary markets will become more attractive to investors” which in turn would inspire more lenders to make loans.

An alternative to this concept would be an expansion of the PPIP program to include the purchase of new securities, he also said. Again, the end goal is the same: bolstering capacity in the secondary market, which would increase loan activity.

To be sure the government has introduced – at the urging of such advocacy groups like the Roundtable–several measures designed to loosen credit. These include PPIP, TALF and TARP. “The idea is for all of these programs to act collectively to restart the markets,” DeBoer said.

The latest survey results from the organization’s poll of industry executives suggest that additional outside prodding is necessary. Of the 120 surveyed real estate CEOs, chairmans, presidents and other top executives, 93% say asset values are lower than they were a year ago. Furthermore, 82% expect values to remain roughly the same or erode even further over the next year. The debt markets remain highly dysfunctional, the survey also found–not that there isn’t plenty of anecdotal evidence of that; 71% said credit availability is worse today than a year ago, while 41% characterized it as “much worse.” A majority of respondents–62% –expect credit conditions to be at least “somewhat better” by this time next year, a sentiment that is more a reflection of the current weakness.

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