How ironic.

The 2400 member Mortgage Bankers Association recently sold it’s building for $41.3 milion to a company called CoStar.   This handsome 10 story building is located at 1331 L Street in Washington, D. C.    It’s prime location is just a 5 block walk over to the  White House. Costar will occupy 80% of the building after the MBA moves out.

No big deal until you look at what the MBA owes- $79 million to  a group of banks including PNC for the building they bought in 2007.   That’s nearly a $38 million dollar shortfall.   This bears emphasis-the Mortgage Bankers Association bought this building less than 3 years ago.   Now it can’t afford the payments so it did a short sale and must move out.   This is certainly an embarrassment for the MBA.   Especially president and CEO John Courson who has been critical of homeowners who walk away from from mortgages that are underwater.  He said people should worry about what their children would think.

It’s also must be an embarrassment for the financial who’s who on the MBA board of directors.  You would think experts from J P Morgan, Wells Fargo, and Key Corp should have known better.  But of course the board has members from the likes of Citigroup, Fannie Mae and Freddie Mac too.  Institutions who have punished the taxpayer with incompetence.

So is the Mortgage Banker Association also a Deadbeat Tenant?

If all this isn’t bad enough, the MBA is still in litigation with it’s former landlord Tishman Speyer Properties over $1 million in termination fees over space it rented previous to owning this property.  The MBA says it plans to pay the penalty but, “Timing” is an issue.  Timing?  The MBA moved over 2 years ago!

So what’s next for the MBA?  The MBA says it will remain at the L street building until June when it says it will rent other space.

So if you’re a DC landlord do you rent to the MBA deadbeats who failed to pay Tishman Speyer after 3 years?

So far this seems to be a non event for large media outlets like AP and Reuters.  However, a real estate new outlet (Real Estate Channel) ,  the Street.com, and a few other services have picked up this story.

Technorati Tags: Dead Beat Tenant, Short Sales