I can't believe no one has posted this yet:
http://online.wsj.com/article/SB10001424052748704197104575051390729443592.html?mod=WSJ_hpp_LEFTWhatsNewsCollection
Not quite a default, but probably kept from going there given the special nature of the borrower.
In a nutshell, the Mortgage Bankers Association decides it's a good idea to pay $79M for 169K sq ft of office space in DC in 2007, with $75M of financing. Never mind that they only had 150 employees at the peak, they were going to lease out the rest. Fast forward a couple or three years, they've now sold the building for $41.3M and are being tight-lipped about their wiggling out of the, ahem, $30M shortfall.
Meanwhile, CEO said as of late last year tha he "believed under-water mortgage borrowers should keep paying their loans even if that no longer seemed to be in their economic interest."
LOL.
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Response by w67thstreet
almost 16 years ago
Posts: 9003
Member since: Dec 2008
Nice nice.... how ya like them apples... beyyyyytchess!.... Maybe they should save money on their nat'l advertisements.... that asks you to HELOC like its 1999....
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Response by polydoa
almost 16 years ago
Posts: 152
Member since: Feb 2009
if this is not ironic, i don't know what is!
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Response by marco_m
almost 16 years ago
Posts: 2481
Member since: Dec 2008
bulls ?
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Response by jason10006
almost 16 years ago
Posts: 5257
Member since: Jan 2009
Already forwarded this story to friends, thanks.
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Response by Riversider
almost 16 years ago
Posts: 13572
Member since: Apr 2009
Selling a loss is very different than defaulting...
Even the pros are taking a beating. The Mortgage Bankers Association, its membership expert in real estate, sold its $90 million headquarters in downtown Washington on Friday for $41 million
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Response by maly
almost 16 years ago
Posts: 1377
Member since: Jan 2009
Very funny! It goes to show, most people are highly principled as long as it affects other people's pockets.
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Response by somewhereelse
almost 16 years ago
Posts: 7435
Member since: Oct 2009
i love it....
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Response by malthus
almost 16 years ago
Posts: 1333
Member since: Feb 2009
This story gets better as you peel the onion:
"CoStar, which will relocate its headquarters to the building, said it is set to receive $6.1m in property tax abatements from the council of the District of Columbia over the next 10 years. The abatements depend on CoStar hiring 100 DC residents, among other requirements. In addition, CoStar said it may be eligible for additional incentives, including a five-year elimination of District corporate income tax and sale and use tax exemptions."
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Response by malthus
almost 16 years ago
Posts: 1333
Member since: Feb 2009
In effect, D.C. is picking up part of the tab for these hypocritical screwups.
Next question: Who held the loan? Do you think they are proud sponsors of the MBA? And maybe they didn't want to have to take possession of the property from a group that represents them? Clusterfrock.
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Response by malthus
almost 16 years ago
Posts: 1333
Member since: Feb 2009
From an older piece: "The acquisition loan was structured as a variable-rate, 30-year taxable bond transaction enhanced by a Letter of Credit Facility provided by PNC Bank. Wells Fargo, Chevy Chase Bank and Virginia Commerce Bank participated in the Letter of Credit Facility. PNC Capital Markets handled the marketing of the bonds, which are typically sold to money market funds at an interest rate near the 30-day LIBOR rate."
I guess this means our 401ks took the hit. Should we stop laughing now?
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Response by inonada
almost 16 years ago
Posts: 7952
Member since: Oct 2008
Riversider, I think you missed the point. The lenders had to take a loss, and not surprisingly, the MBA is being tight-lipped as to how much of the $30M loss they stuffed their lenders. Like the underwater homeowners they chastise with morality, they could have continued paying but chose not to, putting the loss on the lenders who were being paid a premium for this risk. You figure the mortgage industry as a whole should've agreed to a special fee to, umm, help for special advocacy this year. Immeasurable as it may be, I gotta imagine this alone will cause more than $30M in jingle mail for them as a group.
Nice nice.... how ya like them apples... beyyyyytchess!.... Maybe they should save money on their nat'l advertisements.... that asks you to HELOC like its 1999....
if this is not ironic, i don't know what is!
bulls ?
Already forwarded this story to friends, thanks.
Selling a loss is very different than defaulting...
Even the pros are taking a beating. The Mortgage Bankers Association, its membership expert in real estate, sold its $90 million headquarters in downtown Washington on Friday for $41 million
Very funny! It goes to show, most people are highly principled as long as it affects other people's pockets.
i love it....
This story gets better as you peel the onion:
"CoStar, which will relocate its headquarters to the building, said it is set to receive $6.1m in property tax abatements from the council of the District of Columbia over the next 10 years. The abatements depend on CoStar hiring 100 DC residents, among other requirements. In addition, CoStar said it may be eligible for additional incentives, including a five-year elimination of District corporate income tax and sale and use tax exemptions."
In effect, D.C. is picking up part of the tab for these hypocritical screwups.
Next question: Who held the loan? Do you think they are proud sponsors of the MBA? And maybe they didn't want to have to take possession of the property from a group that represents them? Clusterfrock.
From an older piece: "The acquisition loan was structured as a variable-rate, 30-year taxable bond transaction enhanced by a Letter of Credit Facility provided by PNC Bank. Wells Fargo, Chevy Chase Bank and Virginia Commerce Bank participated in the Letter of Credit Facility. PNC Capital Markets handled the marketing of the bonds, which are typically sold to money market funds at an interest rate near the 30-day LIBOR rate."
I guess this means our 401ks took the hit. Should we stop laughing now?
Riversider, I think you missed the point. The lenders had to take a loss, and not surprisingly, the MBA is being tight-lipped as to how much of the $30M loss they stuffed their lenders. Like the underwater homeowners they chastise with morality, they could have continued paying but chose not to, putting the loss on the lenders who were being paid a premium for this risk. You figure the mortgage industry as a whole should've agreed to a special fee to, umm, help for special advocacy this year. Immeasurable as it may be, I gotta imagine this alone will cause more than $30M in jingle mail for them as a group.