Hypocrisy On Sterioids

You cant walk away! But we sure can.

I have written in the past about the hypocrisy of some people and or organizations who lecture homeowners when it comes to strategic mortgage defaults. They make it out to be a moral/ethical question when in fact its a sound financial decision.

http://tradersutra.blogspot.com/2009/12/if-morgan-stanley-can-walk-away.html

http://tradersutra.blogspot.com/2010/01/moral-question.html

We have seen so far Morgan Stanley walk away from a few deals:

http://online.wsj.com/article/SB125607962163797529.html

http://www.bloomberg.com/apps/news?pid=20601087&sid=aLYZhnfoXOSk

Then the genius's at Tishman Speyer who had the cojones to think they can force market rents in Peter Cooper Village.

http://blogs.wsj.com/deals/2010/01/25/tishman-speyers-jingle-mail-on-stuyvesant-town/tab/article/

We now have the Mortgage Bankers Association doing a short sale. Although not a true walk away its still ironic. Karma is funny that way.

http://online.wsj.com/article/SB10001424052748704829704575049111428912890.html

"John Courson, chief executive officer of the trade group, declined in an interview Saturday to say whether the MBA would pay off the full loan amount. "We're not going to discuss the financing," he said. A spokeswoman for the MBA added that the MBA has reached "an agreement with all relevant parties" regarding the outstanding amount on that loan but declined to provide any details."

"We have come to the inescapable conclusion that owning our own building was the smartest long-term investment for the association." In October 2009, however, the MBA informed its members that it had put the building up for sale. At that time, the MBA said that continued ownership of the building, which was financed with $75 million of variable-rate debt, would be "economically imprudent."

Is this the same John Courson who was quoted in the NY Times last month with this?

http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html?em

"John Courson, president and C.E.O. of the Mortgage Bankers Association, recently told The Wall Street Journal that homeowners who default on their mortgages should think about the “message” they will send to “their family and their kids and their friends.” Courson was implying that homeowners — record numbers of whom continue to default — have a responsibility to make good. He wasn’t referring to the people who have no choice, who can’t afford their payments. He was speaking about the rising number of folks who are voluntarily choosing not to pay."

How does this guy sleep at night? He knew as of October 2009 they were going to short sale this property but he still had the gall to be quoted on preaching to homeowners their moral obligations as late as January 2010?

I am thinking that the big bad MBA certainly had the money to keep paying? A deal is a deal? Correct? These idiots paid way to much for their property at the height of the CRE craze. They now realize that they are indeed way over their heads. Just like millions of other homeowners with similar plights.