Thousands of homeowners could get some relief thanks to a plan negotiated by the Bush administration to freeze interest rates for some subprime borrowers whose adjustable-rate mortgages are scheduled to rise in the coming months.

President Bush said 1.2 million people could be eligible for help, but only a fraction will be subject to the rate freeze. Others would get assistance in refinancing with lenders and moving loans secured by the Federal Housing Administration.

Bush’s announcement followed news that home foreclosures hit an all-time high in the July-September period. The Mortgage Bankers Association reported that the percentage of all mortgages that started the foreclosure process in third quarter 2007 surged to a record 0.78 percent, surpassing the previous record of 0.65 percent of all mortgages in the second quarter of 2007.

Aid will be available to borrowers who request it. Homeowners falling behind on their payments reportedly have been sent letters about their options.

The Federal Reserve Board lowered its benchmark lending rate by a quarter of a percentage point in an effort to prevent the housing slump from pushing the economy into a recession. The federal funds rate now stands at 4.25 percent. The central bank also cut its discount rate, which is what banks pay to borrow from the Fed, by a quarterpoint to 4.75 percent.

Doug Bibby, president of the National Multi Housing Council, released a statement about the bailout proposal: “The current situation in the housing market is an unfortunate turn of events that is made even more unfortunate by the fact that it was completely foreseeable and preventable. For decades, the government has pursued a ‘homeownership at any cost’ housing policy. They, like other participants in the housing sector, mistakenly assumed that prices would always go up. They enticed people into houses they could not afford, and they forgot the rarely spoken truth that there is such a thing as too much homeownership.”

New REIT Raising Up to $2 Billion

Hotelier Glade M. Knight has launched an effort to raise up to $2 billion in equity for a new real estate investment trust (REIT) that would invest in the apartment and hotel sectors.

The new endeavor, Apple REIT Nine, Inc., generally would leverage its investments by about 50 percent. Properties purchased by the new REIT will be leased to a management subsidiary of Apple Suites Realty Group, based in Richmond, Va.

Knight plans to raise equity by selling REIT shares at $10.50 to $11 apiece to individual investors. The proceeds would be invested primarily in apartment complexes, as well as full- and select-service hotels.

The REIT’s shares are publicly registered, but they will not be publicly traded on any exchange.

Knight was the founder of Cornerstone Realty Income Trust, a public multifamily REIT that was sold in 2004 to Colonial Properties Trust in a $1.5 billion deal. Since 1999, Knight has raised about $3.6 billion of equity for several ventures that invest in the apartment and hotel sectors.

His latest effort aims to pay monthly dividends to investors and expects to hold its investments for seven years. After that time, the REIT will list its shares on a major exchange, sell all holdings, or sell the company.

Three other Apple vehicles are still investing capital or have yet to complete their offerings.

Lehman Initiates Foreclosure on Would-Be Condos

Greenwich, Conn.— Lehman Brothers has initiated foreclosure proceedings on two condo conversion properties in Greenwich, owned by locally based real estate firm Antares Development.

The investment bank plans to auction $62 million in mezzanine financing it holds on the assets. Lehman also provided $228 million in first mortgages on the properties.

Antares acquired the properties for $223 million in 2006 and expected to spend $100 million converting them into luxury condominiums. Soft sales and some tenants’ refusal to vacate have caused those plans to be abandoned.

A Kuwaiti client, acting through Arch Street Capital Advisors, paid $45 million for a stake in the buildings.

The foreclosure process could be complicated because the client has an investment in the assets in accordance with a provision in Islamic law that forbids the payment of interest.

Centennial Nets Southeastern Assets for $205 Million

Atlanta-based Centennial Holdings has acquired a 1,946-unit portfolio of six apartment communities in the Southeast for $205 million. The seller of the Class A assets was a partnership between Napa, Calif.-based U.S. Advisors and Houston-based Creekstone Partners.

Four of the communities are located in the Atlanta area, including the 346-unit Preston Pointe at Windermere in Cummings; the 440-unit Preston Park at Satellite in Duluth; the 340-unit The Heights at Peachtree in the city; and Preston Landing at Sweetwater Creek in Lithia Springs, which features 240 units.

The remainder of the portfolio includes Park Side, a 300-unit multifamily property in Charlotte, N.C., and the 280-unit Courtney Creek in Durham, N.C.

Centennial plans to hold onto the assets, which are all garden-style communities, for the next four to seven years.