This Alert is one in a collection of articles created by Lyons Gaddis in our effort to get important information to our clients regarding the effect of the novel coronavirus (COVID-19) outbreak in the United States. This Alert focuses on a proposed Bill called the “Helping Open Properties Endeavor Act of 2020,” establishing a loan fund to avoid a wave of property foreclosures.
HOPE Act: Early Thoughts on a Possible Rescue Plan for Real Estate
With the Colorado economy straining under the weight of the pandemic and associated stay-at-home orders, some are predicting a coming waive of bankruptcies and foreclosures. CU Law has even launched a bootcamp to prep future lawyers for what they see as a looming ‘bankruptcy tsunami.’
The proposed HOPE Act could bring much needed relief from some of these threats. The concept is still in development but here are some thoughts on what might be part of the bill:
According to Bruce Stachenfeld, The Real Estate Philosopher®:
The government might offer inexpensive preferred equity to troubled commercial real estate transactions nationwide in an attempt to stabilize the real estate markets.
Job preservation is the goal of this bill and it accomplishes this by assisting the real estate industry in avoiding a looming waive of foreclosures on real estate projects that are now on the brink of foreclosure.
The bill remains in the works with a number of issues still being analyzed. We will monitor its progress and report back with updates.
If this plan does make it into law, it could be a massive boost for much of the real estate sector and could trickle down to help medium and small businesses as well.
I should also note that the information we have about this program comes almost exclusively from the great work of the New York real estate law firm of Duvall & Stachenfeld LLP, who connected with Senator Van Taylor’s office to discuss a private equity version of what the Senator is now proposing. We will keep an eye on this proposed bill as it develops.
Attorneys in the Real Estate Group at Lyons Gaddis are available to advise you in relation to commercial loan programs and other COVID-19 related matters impacting your current and future real estate operations.
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