Mortgage Bankers Bungle Their Own Building's Financing
You know we're in trouble when even real-estate experts teeter on the brink of mortgage default.
The Mortgage Bankers Association, the trade group for mortgage lenders, recently sold its headquarters in Washington, D.C., for $41.3 million, nearly half of what it purchased the building at 1331 L Street, NW for in 2007 ($79 million). Unfortunately, the sales price--paid by CoStar Group Inc., a commercial real estate information company--is also significantly lower than the $75 million in financing the MBA secured to buy the building.
In short, in a scenario all too familiar to many beleaguered homeowners, the MBA found itself "underwater," owing substantially more than the current value of its property. However, unlike most real estate owners, the trade group was reportedly able to cut a deal with its lenders, according to insiders. The organization is expected to pay off at least part of the $38 million difference between its loans and the sales price.