It’s not just the millions of families across America who are coming to terms with a tougher financing environment for home loans.
The Mortgage Bankers Association is scheduled to close on a 160,000-square foot workspace valued at about $100 million in the coming weeks, but the terms associated with the deal are expected to be much worse than originally thought, according to a report from the Washington Post.
The Washington, D.C.-based organization dedicated to the mortgage industry and improved financial literacy for homeowners is experiencing its own, very direct taste of the mortgage crisis.
Per the report, the MBA will need to put down about 10 percent more than it initially planned, and the mortgage rate on the commercial loan could be anywhere from one to two percentage points higher than it was a year ago.
The organization also faces a slowdown in commercial leasing demand, a problem considering about two-thirds of the building is to be rented to someone other than the MBA.
But Kieran P. Quinn, chairman of the MBA, brushed off concerns and defended the organization’s purchase as a long-term win, saying it’s always a good time to buy if making a long term investment.
Quinn also told the Post that the association was now made up of just 2,500 members, down from 3,000 a year earlier, and said he expects revenue to fall 10 to 15 percent in 2008 from last year.
Interestingly, the MBA is planning to cut costs despite noting that its financial condition remains strong, perhaps as the Post pointed out, because of the higher rate on its mortgage.