Sunday, April 06, 2008

Mortgage Woes for the Mortgage Bankers Association

by Calculated Risk on 4/06/2008 12:04:00 AM

Jeffrey H. Birnbaum at the WaPo reports that the Mortgage Bankers Association (MBA) is "about to find it harder than it imagined to pay its own mortgage": Housing Crisis Hits Its Own

A year ago, the Mortgage Bankers Association was thrilled to sign a contract to buy a fancy new headquarters building in downtown Washington. Interest rates were low, the group's revenues were steady and the prospects for quickly renting out part of the structure were strong.

But since then, the association has fallen on tough times ...

The lobbying group is about to sign the final papers to buy the 12-story building on L Street NW for about $100 million. Like many of the companies it represents, the organization is facing a triple whammy of woes: Its financing costs are up, its income is down, and the leasing market is slow, leaving it, so far, without a single tenant.
emphasis added
This shows several aspects of the credit crisis. MBA members are struggling (or gone), so revenue is down. Financing costs have risen. And the market for office space has slowed sharply.

I guess they could always just walk away.