Mortgage bankers not moving back in with parents

The fact that the credit crunch is increasing the financing costs for the Mortgage Bankers Association's new 12-story headquarters in Washington D.C. has made the lobbying group an easy mark for pundits and comedians, although some have felt the need to embellish the story a bit.

The facts, according to an April 6 Washington Post story, are that the MBA is about to sign the papers to buy a new 12-story building at 1331 L Street NW for about $100 million. When the MBA announced the agreement to buy the 170,000 square foot building more than a year ago, it said it would occupy about one-third of it.

But the MBA faces a "triple whammy of woes," the Post reports: financing costs are up, the MBA's income is down, and a slow market for office space has left the group without any tenants. While interest rates on prime, fixed-rate home loans have fallen in recent months, rates on commercial loans are one to two percent higher than a year ago, and the MBA's down payment on the building has been increased by about 10 percent.

More significantly, perhaps, the MBA's membership has shrunk by about 17 percent from a year ago, from 3,000 member companies to around 2,500. The group has laid off an unspecified number of employees, the Post reports, also noting the departure of "two senior vice presidents to other jobs in the real estate industry" (that would be chief lobbyist Kurt Pfotenhauer to ALTA and chief economist Doug Duncan to Fannie Mae).

Although the facts as detailed in the Washington Post story aren't terribly funny, if you stretch them a little the Mortgage Bankers Association is an easy target.

Here's how the NPR quiz show, "Wait Wait... Don't Tell Me!" played it over the weekend:

Host Peter Sagal: "Paula, The Mortgage Bankers Association in Washington D.C. is having a hard time these days doing what?"

Comedian Paula Poundstone: "Paying their mortgage?"

Sagal: "Exactly right. Finally some good news to come out of the housing market crisis. Or if not good news, at least satisfyingly sad news. The lobbying group for mortgage bankers is having trouble paying its own mortgage, after losing income and members last year. Due to chaos in the market and soaring interest rates the mortgage association is now finding it hard to refinance and secure tenants for its new building in Washington. So to avoid foreclosure, the association has moved back in with its parents."

Comedian Tom Bodett: "So who holds the mortgage on the Mortgage Bankers Association?"

Poundstone: "Probably the same company I went with, which is 'Don't ask, don't tell mortgage company.' I'm so ahead of the curve, I've gotta tell you. I lost my house years before it was the thing to do."

While comedians are allowed some leeway to stretch the facts, the MBA was not amused when CNBC's Diana Olick wrote that she was "sure there are plenty of troubled borrowers around the country who will do a bit more than chortle when they hear the story of how the Mortgage Bankers Association is having trouble paying the mortgage on its new building in downtown DC."

The MBA fired off an e-mail to Olick taking issue with the claim.

"It is simply not true," that the MBA is having trouble paying the mortgage, the group protested. "While MBA is seeing a drop in revenue (indicative of the state of the industry) and is responding with a reduction in expenses (as any responsible business would do) MBA’s financial situation remains rock solid, and will be even more so as a result of this purchase. Owning makes more financial sense than renting, especially in the District, which has one of the strongest commercial real estate markets in the country.”

If you're looking for office space on L Street, the building has its own Web site.

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