Savor this one, borrowers: The Mortgage Bankers Association is feeling the credit crunch

Posted by: Peter Coy on April 10, 2008

Great article this past weekend in the Washington Post (maybe not as great as the six 2008 Pulitzer winners, but still great) about how the Mortgage Bankers Association is being squeezed by higher borrowing costs on its new $100 million headquarters.

Here’s a link.

Says the Post writer, Jeffrey H. Birnbaum: “Scheduled to close on the building in the coming weeks, the association will have to pay millions of dollars more than it would have a year ago when it contracted to buy the 160,000-square-foot structure — millions of dollars it is now less able to afford.”

Why is the Mortgage Bankers Association less able to afford a big mortgage now than, say, a year ago? For one thing, it has lost about 500 of its 3,000 members. Some of them blew up because they made loans that the borrowers couldn’t possibly afford to repay.

Reader Comments

DNCB2008

July 18, 2008 4:48 PM

Thought you may be interested in link to the attached story that appeared today on the mortgage implode-o-meter web site blog OptionARMageddon.com.

http://OptionArmegeddon.ml-implode.com

Its about the financial troubles that the mortgage banking industry’s leading trade association, the Mortgage Bankers Association (MBA) is facing due to bad decisions that its CEO made this year. As a result, a dues increase will be implemented and layoffs have occurred of key staff and now at this critical time for the industry services such as increased lobbying efforts have had to be curtailed.

The MBA according to this article appears on the verge of bankruptcy. Sadly, unlike its brothers at Fannie and Freddie or Bear Stearns, they will not be eligible for a government bailout, nor can they expect financial help from their big members – all of whom have either gone out of business – Countrywide and IndyMac to name a few and some of the other 266 companies that the mortgage implode o meter has reported going out also. Plus some of its other members like WaMu and Wachovia, and Citi all have had large losses and are hurting and may not be able to contribute to the MBA going forward.

For more info – recommend you contact the free lance reporter who did a great job researching this piece directly for more info at rolfe.winkler@gmail.com

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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