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Mortgage bankers headquarters fiasco reveals double standard

Posted by Scott Van Voorhis February 9, 2010 07:00 AM

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Now this is a good story.

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.

After shelling out nearly $80 million for a downtown Washington office building in 2007, right around the peak of the commercial real estate price bubble, the Mortgage Bankers Association is bailing out big time, The Wall Street Journal reports.

The trade group has sold its 10-story Washington headquarters for $41 million after shelling out $79 million for it three years ago. All but $5 million of that was financed.

It gets better, for its not clear the Mortgage Bankers Association will pay off all of the roughly $30 million it still owes its lenders on the trophy office building, just a few blocks from the White House, the Journal reports.

On top of that, giant commercial landlord Tishman Speyer is battling in court with the MBA, contending the trade group still owes $1 million after breaking an earlier lease to move into its now clearly massively overpriced headquarters.

Like so many struggling homeowners who bet badly on the market, the Mortgage Bankers Association will now become a renter, not an owner.

It's really hard to see how the mortgage bankers group will live down some of the statements, like the one below, made shortly after it pulled the trigger on this disastrous deal.

"We have come to the inescapable conclusion that owning our own building was the smartest long-term investment for the association," said Jonathan Kempner, the MBA's president, in a press release.


This blog is not written or edited by or the Boston Globe.
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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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