The Mortgage Bankers Association posted a $28.4 million loss for its fiscal year ending September 30, 2010, almost double the loss it suffered the year before.
According to a copy of its tax return, which became available early this fall for the first time, its liabilities exceeded its assets by $16 million.
Its results for the fiscal year ending Sept. 30, 2011 will not be available for another year.
MBA's negative net worth can be traced to its ill-timed investment in commercial real estate. In early 2010 it sold its main headquarters – a Washington office building that it built with money taken from its cash reserves – at a $34 million loss. (To add insult to injury, the company MBA sold the property to, CoStar Group, flipped it a year later for $101 million.)
Back in 2007 the trade group signed a deal to build its $75 million headquarters, obtaining financing from PNC Bank. When the real estate bubble burst and the recession struck, it had a hard time finding tenants and serving the debt on the mortgage. When construction started on the project Jonathan Kempner was its president and CEO.
According to MBA's latest tax return, Kempner was still receiving money from the trade group last year. In FY 2010 it paid him $1.1 million. His successor, John Courson, was paid a salary of $662,279.
Former FHA commissioner David Stevens became MBA CEO this past spring, replacing Courson.
A spokesman for MBA said that although the organization has a negative net worth “we have significant cash on hand to operate and our net earnings from association operations are running in the black (net positive.)”
He added that, “This allows us to continue to run our business and meet all our debt service obligations, including payments on the building we sold last year.”
The tax return shows that MBA had almost $9 million in cash on hand at Sept. 30, 2010. It brought in total revenue of $30.7 million last year, compared to $28.7 million the year prior.
