WASHINGTON -- The Mortgage Bankers of America is now adopting a longer term view of subletting rental space to other companies in order to pay the mortgage on its new headquarters building here.
According to the Washington Post, the MBA is facing a problem paying the mortgage on its new 160,000-square-foot structure in downtown Washington.
A year ago, when interest rates were low and revenues steady, the prospects for quickly renting out unused sections of the building were optimistic. Scheduled to close on the building soon, the association will have to pay millions of dollars more than it would have a year ago when it contracted to buy the building--millions of dollars it is now less able to afford.
"Anytime is the best time to buy," said Kieran P. Quinn, MBA chairman. "Over a 10-year horizon, it looks great." But critics see the irony in the predicament. "They are certainly getting what they deserve," said Dean Baker, co-director of the Center for Economic and Policy Research, a liberal research group. "Mortgage bankers encouraged people to take out mortgages that were very risky, and the result of that was a large number of the mortgages went bad and caused mortgage interest rates to soar. Now they are the victims of high mortgage rates and chaos in the market more generally."