Mortgage Banker Association Takes 30 Million Dollar Loss on Real Estate
This is rich.
The Mortgage Bankers Association, MBA, bought a trophy building at the top of the market in Washington, DC in 2007 for 79 million dollars. A ten story beauty we are told, right down the road from the White House.
Well, they just sold it for 41.3 million dollars in early 2010. Not counting the 7 million they paid in cash, they are still down 30 million dollars in a little over 2 years. I wonder what the association members think of that.
And to make matters worse, or even more ironic, they are not letting people know how they are going to make up the 30 million dollars they will owe. Just some mumbling about loans and such.
Boston Real Estate has a great observation on how the MBA was knocking homeowners who were walking away from their mortgages and how irresponsible they were.
Mortgage bankers have not been terribly sympathetic these past few years to the plight of struggling homeowners. Those who have tried to do the right thing, and sell their homes in short sales instead of simply walking away, have too often found themselves caught in a web of corporate red tape.
And for frustrated homeowners who opt to walk away, well let’s just say there’s been absolutely no mercy at all.
“What about the message they will send to their family and their kids and their friends?” John Courson, chief executive of the Mortgage Bankers Association, recently asked.
Well now we can ask the same question about the Mortgage Bankers Association’s own, spectacularly foolish real estate activities.
The original story at the Wall Street Journal.
On Friday, CoStar Group Inc., a provider of commercial real estate data, said it had agreed to buy the MBA’s 10-story headquarters building in Washington, D.C., for $41.3 million. That is well below the $79 million the trade group agreed to pay for the glass-walled building in 2007, near the top of the property bubble, while it was still under construction. The price also falls short of the $75 million of financing that the MBA got from a group of banks led by PNC Financial Services Group Inc. for the purchase.
John Courson, chief executive officer of the trade group, declined in an interview Saturday to say whether the MBA would pay off the full loan amount. “We’re not going to discuss the financing,” he said.
Two people familiar with the situation said they believed the MBA would pay off part of the approximately $30 million gap between the proceeds of the sale and the loan balance. A spokeswoman for the MBA added that the MBA has reached “an agreement with all relevant parties” on the loan but declined to provide details. via the WSJ
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Mortgage Banker Association Takes 30 Million Dollar Loss on Real Estate
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