Mortgage Bankers Association “Walks Away” from HQ
By Barry Ritholtz - February 7th, 2010, 8:38AM
OK, that’s an exaggeration — they appear to have done a short sale, not a walk-away.
Ironic Hypocritical Headline of the Day:
Mortgage Bankers Association Sells Headquarters at Big Loss (WSJ)
CoStar Group buys downtown Washington building for $41.3 million, far below the $79 million the trade group said it paid in 2007
Didn’t the National Association of Realtors do something similar last year?
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UPDATE February 8, 2010, 1:54pm
A friend writes to remind me teh MBA CEO is a hypocrite:
Courson, the CEO, was big on underwater borrowers’ responsibility to continue paying on their loans if they could afford to do so.
“What about the message they will send to their family and their kids and their friends by defaulting?’ he said in a late-2009 interview.
February 7th, 2010 at 8:41 am
Like millions of American households, the Mortgage Bankers Association found itself stuck with real estate whose market value has plunged far below the amount it owed its lenders.
But the trade group for mortgage lenders is refusing to say exactly how it extracted itself from that predicament.
On Friday, CoStar Group Inc., a provider of commercial real estate data, announced that it had agreed to buy the MBA’s 10-story headquarters building in Washington, D.C., for $41.3 million. The price is far below the $79 million the trade group says it paid for the glass-walled building in 2007, while it was still under construction. The price also is far below the $75 million financing that the MBA received from a group of banks led by PNC Financial Services Group Inc. to finance 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. A spokeswoman for the MBA added that the MBA has reached “an agreement with all relevant parties” regarding the outstanding amount on that loan but declined to provide any details.
A spokesman for PNC, a banking company based in Pittsburgh, declined to comment.
Holliday Fenoglio Fowler LP, a real estate advisory firm, announced in June 2008 that it had arranged the $75 million financing for the MBA. At that time, HFF said the acquisition loan took the form of a variable-rate, 30-year taxable bond transaction backed by a letter of credit from PNC. HFF said such bonds are typically sold to money market funds.
February 7th, 2010 at 9:17 am
there fee’s must be down, so cut salaries ot chuck something over da boats side, the insanity continues
fwiw, costar very interesting company, the lead number cruncher on all cre in america, diversifying? obviously they’re not interested in cap ex on the business, must be something persnickety like lower sales
February 7th, 2010 at 10:02 am
And to think, just 30 days ago John Courson was berating homeowners from doing exactly what his association did. It is remarkable the arrogance and hypocrisy that these bankers have running through their ego driven heads. http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html
February 7th, 2010 at 10:36 am
It’s a great time to buy OR sell CRE
February 7th, 2010 at 11:07 am
This article is wierdly comforting for me. Now we know they were at least drinking the same cool-aid they were selling. Or something.
February 7th, 2010 at 2:11 pm
molten_tofu, unfortunately, none of these scum *individually* get to see their credit trashed by this particular default.
February 8th, 2010 at 3:02 am
[...] – Ironic headline of the day. [...]