Sunday, April 6, 2008

The Irony & The Ecstasy

Honestly, the jokes just write themselves these days:
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.

No one could have anticipated that the predatory lending practices of folks like Countrywide would have industry-wide repercussions! No one expected those chickens to come home to roost.

It’s not like the Mortgage Bankers Assn. didn’t try to keep foisting their higher cost, dirty-dog subprime mortgages off on an unsuspecting public, even after the collapse of Big Shitpile, or force borrowers into foreclosure. Oh, wait. They did:

Indeed, under pressure from the lobby, the House already gutted some of the better parts of the Frank bill. For example, the Mortgage Bankers Association and the American Banking Association lobbyists persuaded legislators to allow lenders to continue the insidious practice of paying an increased fee to brokers for steering borrowers into higher cost sub-prime mortgages. It also bars borrowers whose predatory loans have been sold on Wall Street from suing investors for relief until the homeowners are facing foreclosure. In effect, it forces borrowers into foreclosure as a condition for asserting their rights. Wall Street and the big players in the mortgage market won't be held accountable for buying abusive loans.

Well, there is a God: apparently the Mortgage Bankers Assn. has hit on some hard times. According to the Washington Post, the lobbying group’s membership is down 17% and its revenue will be down 15%.

Not the same as a family being tossed out of their home, of course. But I won't be crying for the Mortgage Bankers Association if they have to eat it on their new HQ.