Now Not a Good Time for Procrastination, Cambridge Advises Healthcare Borrowers

CHICAGO, IL, Aug. 5, 2008--A new Bloomberg News survey predicts that economic expansion in the fourth quarter will most likely slow to the weakest pace observed in six years, and this may not be as bad as it gets.

At Morgan Stanley Co., Richard Berner,(top left photo) co-head of global economics, describes the credit crunch, record energy costs and declines in payrolls and house prices as a “perfect storm” that figures to wash the economy into a recession during the fourth quarter once the tax stimulus package loses its effectiveness as a flotation device.

Apparently on board with this projection are Federal Reserve policy makers who have been indicating they’ll put off raising interest rates until next year unless a very unlikely scenario unfolds.

“This,” says funding expert Jeffrey A. Davis, (middle right photo) “is one of those times when it’s difficult to find encouraging words for the economy -- of any kind. But it may still be possible for senior housing/healthcare owner/operators to get something productive done in the financial arena.

“With the economy floundering, interest rates have continued to decline. In a dramatic example, the one month LIBOR index rate, which is one of the factors banks consider when setting rates on conventional mortgages, was 2.46 percent early in July, compared with 5.32 percent a year earlier,” he noted.

Davis is Chairman of Cambridge Realty Capital Companies, one of the nation’s leading senior housing healthcare lenders. The company has consistently ranked among the top HUD Section 232 healthcare lenders and optionally offers various conventional funding options as well.

For a boatload of reasons, Davis thinks it’s unlikely mortgage rates will move as low as they did the last time the Fed pushed the short-term federal funds rate to current levels. Waiting for this to happen may not be realistic.

“What borrowers need to focus on is the fact that mortgage interest rates are probably scraping bottom for this particular cyclical phase and remain attractive by historical standards. Looking back on this period from the future, it may be fairly obvious that this was not a particularly good time for financial procrastination,” he noted.

CONTACT: Evan Washington, Phone: (312) 521-7603, Fax: (312) 357-1611, E-Mail: ew@cambridgecap.com