Irony
Via the WSJ, on the Mortgage Banker's Association (MBA) being underwater on their real estate loan:
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 well 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 falls short of the $75 million of financing that the MBA received from a group of banks led by PNC Financial Services Group Inc. for 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.
...In an interview late last year, Mr. Courson said he believed mortgage borrowers should keep paying their loans even if that no longer seemed to be in their economic interest. He said paying off a mortgage isn't only a matter of personal interest. Defaults hurt neighborhoods by lowering property values, Mr. Courson said. "What about the message they will send to their family and their kids and their friends?" he asked.
Ian Random:
I thought that anything a business engages in assumes more risk of default on a par with someone that has a low fico. That is why everyone screws over businesses from monopolistic utilities to construction companies with higher rates.
February 8, 2010, 5:19 pm