Mortgage Bankers Association struggles to pay its mortgage - BloggingStocks

Posted April 7th 2008 9:33AM by Filed under: , ,

The studies that the Mortgage Bankers Association (MBA) is getting what it experiences is a natural trade on a mortgage for its American Capital headquarters. Boo hoo! The Master in Business is buying a edifice there for $100 million, but is paying a higher involvement charge per unit on its mortgage as its income diminutions and the leasing marketplace is slow departure it with no renters for the building.

This couldn't have got happened to a nicer association. After all, the Master in Business encouraged people to take out subprime mortgages -- many of which went bad. Despite the Fed's charge per unit cuts from 5.25% to 2.25% mortgage involvement rates are up thanks to bankers' fearfulness of lending. And the consequent economical lag is making it harder for the Master in Business to happen renters for its building.

Let's study the harm to the MBA. First, its rank have declined 17% inch the last twelvemonth and it foretells a 10% to 15% diminution in gross as a result. Bankers are making the Master in Business set up about 10% More of a down payment than it had planned and the deficiency of renters have moved its loaner to increase the funding costs slightly. Perhaps there's justice in the universe. If not, at least MBA's quandary is giving it a taste sensation of its ain medicine.

Peter George M. Cohan is President of . He also and edits .