Like millions of American households, the Mortgage Bankers Association found itself stuck with real estate whose market value has plunged far below the amount it owed its lenders. But the trade group for mortgage lenders is refusing to provide the terms of a deal it made with creditors to escape from that predicament… When the MBA announced the purchase of the building in early 2007, the trade group’s president at the time, Jonathan Kempner, said: “We have come to the inescapable conclusion that owning our own building was the smartest long-term investment for the association.” In October 2009, however, the MBA informed its members that it had put the building up for sale. At that time, the MBA said that continued ownership of the building, which was financed with $75 million of variable-rate debt, would be “economically imprudent.”
It’s not surprising that the MBA is reluctant to release the details of a potential “renegotiation” with its creditors. What kind of example would that set for all of their member banks?