I guess no one is immune to plummeting property values and high mortgage rates…
Unable to make good on its mortgage, The Mortgage Banker’s Association of America, has begun the short sale process for the Washington, DC Headquarters it purchased with a commercial loan in 2007. The MBAA is selling the building to CoStar for $41.3 million, just over half of the $75 million originally mortgaged just three years ago.
In October of 2009, The MBAA announced their intentions to sell 1331 L. Street because they couldn’t make loan payments on their $79 million headquarters. With a variable-rate loan mortgaged at 94.9 percent loan-to-value, the MBAA’s investor loan was just too large to manage.
Needing only 60,000 sq ft., the MBAA bought a 170,000 square foot commercial structure hoping to rent the remaining space out to other tenants. The plan didn’t work. Paying only $4400 per month for each space, the MBAA could only fill about 15% of the extra space.
The MBAA has been known for criticizing homeowners and investors who end up in foreclosure. When asked about what borrowers should do when their mortgage debt exceeds their home’s current value, ex-President Jonathan Kempner said they should continue to make payments, if only to send a moral message of personal responsibility to their children.
I guess it’s easier to pass judgment on others when you feel you’re above the situation yourself. If you asked him today, his answer might be quite different.
Well, at least they did one thing right. When they knew they were in some financial trouble, they contacted a Short Sale Specialist.
I hope you do the same.
Sincerely,
Mark Shandrow
Real Estate Broker
office 562-364-9505 ext 100
mark@shandrowgroup.com
Shandrow Group
3970 Atlantic Ave., 210
Long Beach, CAÂ 90807
follow my story at http://markshandrow.com
