Reposted from OC Register: Mortgage Bankers Assoc HQ = Short Sale
February 9th, 2010, 4:41 pm · 16 Comments · posted by Jeff Collins
The Internet continues to reverberate with the weekend’s news that the Mortgage Bankers Association has sold its Washington, D.C., headquarters for about half of what it paid for the high-rise three years ago.
According to the Wall Street Journal, the industry trade group sold its $79 million headquarters on Friday for $41.3 million, or 48 percent off its original sale price. ( The Washington Post reported its original sale price at $90 million.)
Left unanswered was whether the association will repay the $75 million purchase loan the MBA received from a group of banks led by PNC Financial Services Group Inc. or whether the deal will end up a short sale.
The Journal wrote:
“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.”
The buyer was listed as CoStar Group, a commercial real estate information firm, which plans to move its headquarters from Bethesda to the District.
The MBA purchased the 10-story, glass-walled building while it was under construction in 2007, and planned to finance the purchase by leasing out unused space, according to news reports. However, the office market soured, and the MBA has only been able to lease out about 10 percent of the available space.
All of which ignited a cacophony of commentaries.
The Baltimore Sun’s Jay Hancock wrote:
“So far we can file this only in the Department of Irony, not Hypocrisy. But stand by.
” … Will this turn into a short sale? Will the MBA walk away from the difference that it owes a lending group headed by PNC Financial? Will it do what it has urged homeowners not to do? That would be an act of headline hypocrisy for the books. As the Journal’s James R. Hagerty reports, MBA executive John Courson has urged families with underwater mortgages to keep making the payments.”
Said real estate writer Scott Van Voorhis at Boston.com:
“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.”
Added Glenn Hall of TheStreet.com (the Register’s former business editor):
“Sounds like one of those jokes that make the rounds on the Internet, but sadly this one is true.
” … This is more than a little embarrassing for a group that represents some 2,400 lenders, loan brokers, commercial banks, thrifts and life insurance companies.
“You expect more from a group whose directors include executives from JPMorgan Chase, KeyCorp and other notable financial companies.”