Hoist with his own petar

Housing Crisis Hits Its Own
Mortgage Bankers Group Faced With Tougher Terms

By Jeffrey H. Birnbaum
Washington Post Staff Writer
Sunday, April 6, 2008
A year ago, the Mortgage Bankers Association was thrilled to sign a contract to buy a fancy new headquarters building in downtown Washington. Interest rates were low, the group's revenues were steady and the prospects for quickly renting out part of the structure were strong.

But since then, the association has fallen on tough times as many of the subprime mortgages dispensed by some of its members proved dicey. Borrowers discovered the loans were more costly than they had anticipated. Foreclosures soared, and cheap, inexpensive credit dried up, slowing the economy.

The result: The trade group is about to find it harder than it imagined to pay its own mortgage.

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.

The group's leaders defend the transaction as prudent and, in the long run, wise. "Anytime is the best time to buy," said Kieran P. Quinn, [ Assclown. -ed.] chairman of the association. "Over a 10-year horizon, [the purchase] looks great."

But the short run looks a little bumpy. "The association's timing is not good, to say the least," said John E. "Chip" Akridge, a local developer. "I'm sure a year ago they would have rethought their decision if they knew what was going to happen."

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A little bumpy in the short time? "In the long term, we're all dead." John Maynard Keynes