How to Strategic Default? Ask the MBA.
If you want to know how to strategic default, ask the MBA… Mortgage Banking Association.
The CEO of the powerful Mortgage Bankers Association, John Courson, has said that underwater borrowers should keep paying on their mortgage loans and “should not walk away from lawful debts”. In an interview this past year, Courson appeared genuinely concerned adding:
“What about the message they will send to their family and their kids and their friends?”
Obviously, Mr. Courson was not just speaking as a defender of financial institutions. Clearly, he was showing how much he cares for people and their personal relationships. He believes the children are our future. He thinks we should teach them well and let them lead the way. That we should show them all the beauty they posses inside. Give them a sense of pride. To make it easier… let the children’s laughter… remind us how we used to be.
Thank you John… you’re no Whitney Houston, but you’ve got me all teary eyed over here.
There’s just one little, teeny-tiny, almost insignificant smidgeon of a problem with what the Mortgage Bankers Association’s CEO was saying: He was completely full of shit.
This past week, the Co-Star Group, Inc., indicated that it had agreed to buy the MBA’s 10-story headquarters building in DC for $41.3 million. The only problem is that $41.3 million comes up a skosh shy of the $75 million first mortgage on the building that the MBA took out from PNC Financial Group way back in 2007, when they purchased the property for $79 million.
You remember 2007, don’t you John? That was the last year that all of those irresponsible homeowners, thinking real estate prices would go up forever, kept over leveraging themselves, buying properties without the traditional 20% down payment. What a bunch of irresponsible idiots, right Johnny Boy? Now that the bubble has popped, those homeowners should just be taking their medicine like men, don’t you agree John? The last thing they should do is walk away from their lawful debts, isn’t that what you said?
So I mean, what kind of message are YOU now sending to your family, your children, and your friends by walking away from your lawful $75 million debt? Are they being morally harmed by your decision to stick the bank with close to $25 million? And why aren’t you simply paying your mortgage as agreed, Mr. Courson? You’re not trying to destroy prices of commercial properties in Washington D.C. are you?
Just last year, you pointed out that defaults hurt neighborhoods by lowering property values, so borrowers would do less harm to our society were they just to repay what they owe. You know… like the responsible homeowners.
(Oh, and this just in from my favorite bankruptcy attorney and all-around thought leader, Max Gardner, the MBA also defaulted on their payments and secured a forbearance agreement, prior to the short sale. Nicely done, Johnny-O. Maybe you should open a loan mod firm and start helping homeowners.)
Well, I think I’ve got your message, Mr. Courson. I know exactly what you wanted to say to your family, your children and your friends…
Do as I say. Not as I pay.
Does that about sum it up for you, Mr. John Courson?
Yeah, I thought so.