By Janet Morrissey, contributorMarch 5, 2010: 4:19 PM ET

NEW YORK (Fortune) — Economists have long been predicting commercial real estate could be the next day of reckoning for the financial markets, with a wave of defaults looming as billions of dollars in troubled loans come due in the coming months.

But a little-noticed bill introduced in January could help bring a new source of desperately-needed liquidity to the sector: foreign i

Introduced by Joseph Crowley, a six-term Democratic congressman representing parts of New York City's Queens and Bronx boroughs, the Real Estate Revitalization Act of 2010 would eliminate certain taxes that were part of the Foreign Investment Real Estate Property Tax of 1980, or FIRPTA — which requires foreign investors to pay as much as a 55% tax on capital gains from the sale of U.S. real estate or shares in real estate investment trusts and real estate operating companies.

Repealing the tax, Crowley and the bill's supporters say, would get rid of a major impediment to foreign investment in the sector — and could open the floodgates to new liquidity at a time when commercial real estate loan defaults pose a serious risk to the nation's fragile economic recovery.

The FIRPTA tax, the bill's supporters say, penalizes foreign investors who want to put cash into U.S. real estate because those same investors don't face such taxes when they buy into other U.S. assets, like Treasury securities, corporate equities or corporate bonds.

If a British citizen buys stock in IBM (IBM, Fortune 500) and sells stock in IBM, for instance, that person is not subject to tax in the U.S. and only pays UK-levied taxes. But if he buys and sells REIT shares, he will pay an additional tax on the sale of those shares.

Foreign investors also don't pay added taxes when they make real estate investments in other foreign markets. “London doesn't have this FIRPTA layer of tax, so comparing a London building to a [Washington] DC building — it makes the London building more attractive, and that is enough to tilt the needle,” says Laine Kenan, Atlanta-based executive director of Arcapita, a Bahrain-based global private equity firm with a large real estate investment portfolio. Currently, only about $3 billion of his firm's $10 billion in real estate exposure is in the U.S. If the tax was lifted, “it would make a difference,” Kenan says.

via A plan to save commercial real estate – Mar. 5, 2010.

Get an emergency loan

By Tami Luhby, senior writerMarch 8, 2010: 4:37 PM ET

NEW YORK (CNNMoney.com) — The jobless may not be getting much help from President Obama's loan modification program, but those in Pennsylvania have another place to turn.

The Pennsylvania Housing Finance Agency offers the jobless and those suffering financial hardship loans of up to $60,000 for as long as three years to cover their monthly payments or take care of their arrears. Created in 1983, the program boasts an 80% success rate in preventing foreclosures.

“If you allow people some time to find a job, they can keep their home, which saves their family, their neighborhood and their communities,” said Brian Hudson, the agency's executive director.

The emergency mortgage assistance program, which is funded by the state and borrowers' repayments, has come into the spotlight in recent weeks as the president searches for a way to help the unemployed stay in their homes.

The administration late last month announced a $1.5 billion initiative that gives money to the states hardest hit by the mortgage crisis: Arizona, California, Florida, Michigan and Nevada. The effort calls for the states' housing authorities to assist the jobless and those who are underwater — meaning they owe far more than their homes are worth.

Already, officials in Nevada, California and Florida have been in touch with Hudson to learn how to replicate Pennsylvania's program, which has distributed $450 million on behalf of 43,000 homeowners since inception. Similar efforts also exist in Delaware, North Carolina and Massachusetts.

Here's how the Pennsylvania program works: Housing counselors send the agency applications of those suffering temporary hardships beyond their control, Hudson said. Those approved could have their arrears wiped out, their monthly mortgage obligation covered, or both.

Hudson attributes the program's success to a careful inspection of applicants' financial backgrounds, which are reviewed annually. Those who've racked up credit cards debts are not likely to gain approval, for instance. Those likely to land a job within a few months or years are.

“You must have a reasonable prospect of resuming full payments within 36 months and of paying the mortgage in full,” Hudson said.

Loan payments are made directly to the servicers and a lien is placed on the property. The aid is repaid at a 5.25% interest rate over 10 years on average, though the borrower's financial circumstances are taken into account.

For Erin and Robert Smith, the loan program helped them keep a roof over the heads of their three children. The Harrisburg, Pa. couple had no problem handling the $2,000 monthly payment on their home … until they lost their jobs in 2008.

Their loan servicer refused to help them, instead sending them a foreclosure notice. But the Pennsylvania agency stepped in, giving them a $30,000 loan to cover their arrears and real estate taxes.

“All we needed was a break,” said Erin Smith, 33. “We knew once we found employment, we could start making those payments.”

The Smiths are among the 3,250 homeowners that the housing agency's mortgage assistance program saved from foreclosure last year. A record 14,000 homeowners applied for help in 2009, up from 10,000 in most years.

“Not too many mortgage companies say we'll only take a small payment until you get back on your feet,” said Linda Harvan, a foreclosure intervention counselor with Action Housing in Pittsburgh.

Such loan programs are not that easy to administer, however. Fannie Mae unveiled a similar program, HomeSaver Advance, in 2008 to help those suffering temporary financial hardships. It provided unsecured loans of up to $15,000 that borrowers could use to clear their arrears.

But the program was effectively discontinued within a year after redefault rates soared to nearly 70%. By August 2009, HomeSaver Advance accounted for only 3% of Fannie Mae's foreclosure prevention actions, down from 42% a year earlier.

Awilda Mercado is thankful that the emergency loan program in Pennsylvania continues to serve the state's residents. In 2008 she lost her factory position and her husband had an on-the-job accident that left him unable to work. To help her stay in her York, Penn., home, the agency took care of her arrears of $7,386 and paid four months of her mortgage.

via Pennsylvania helps jobless residents pay their mortgages – Mar. 8, 2010.

NEW YORK (CNNMoney.com) — The possibility of securing a mortgage rate below 5% has greatly improved in recent weeks, in a positive sign for would-be home buyers.

Home mortgage rates fell for the sixth straight week, according to two key measures, with one of them pointing to a sub-5% rate for the 30-year fixed loan for the second week in a row.

Freddie Mac's (FRE, Fortune 500) weekly report said the 30-year rate slipped to 4.87% for the week ended Thursday, the lowest since May. According to the mortgage backer, last week's rates stood at 4.94%.

Mortgage tracker Bankrate.com said the average 30-year fixed loan slipped to 5.22% from 5.25% the previous week. The 15-year fixed rate also fell, Bankrate said, to 4.6% from 4.64% the week before.

The 30-year rate is influenced by the benchmark 10-year note's yield, which moves in the opposite direction of its price. Treasury prices have risen over the past week as $78 billion worth of auctions received above-average demand.

“Another disappointing employment report had investors questioning the strength and sustainability of the economic rebound,” the Bankrate report said. “The resulting uncertainty drove investors into the safety of government and mortgage-backed bonds.”

“Not even a substantial auction of government debt has been enough to derail the streak of declining mortgage rates,” the Bankrate report said.

Rates are returning to levels not seen since the spring when, in an effort to cap mortgage rates, the Federal Reserve began a campaign to buy back $300 billion in Treasurys. The Fed hoped that it would spark demand and keep yields — and therefore, mortgage rates — in check.

Mortgage rates fell as refinancings abounded. But those benefits seemed to wear off, as rates started on a tear in the summer. By June, the benchmark 10-year bond's yield had increased steadily to hover around 4%.

Now the central bank has less than $15 billion left to spend on its buyback program, which led some investors to worry that yields would soar again. So far, that's not the case.

On Wednesday, reports said Democratic congressional leaders were working to extend a $8,000 tax credit for first-time home buyers past the Nov. 30 expiration date and could even make it available to current homeowners who buy a new house.

Homeowners have received a boost from both the tax credit and the lower rates — last year, the average 30-year fixed mortgage rate was 6.2%, according to Bankrate.

To translate the difference in mortgage rate into dollars, consider a $200,000 loan. At last year's rate of 6.2%, the monthly payment would be $1,224.94, or $124 higher than the monthly payment at the current rate.

The low rates helped mortgage applications surge by 16.4% last week, according to a separate report. To top of page

First Published: October 8, 2009: 12:32 PM ET

via Mortgage rates down for 6th straight week; some see sub-5% – Oct. 8, 2009.