My favorite part about the story is this:
“This isn’t a default or foreclosure situation,” Barnes said. “We are going to give them the properties to get out of the loan obligation.”
They're not defaulting - they're just going to give the lender the keys and stop paying the mortgage payments, permanently, which is the opposite of what was agreed to in the loan docs. He sounds like the traffic cop who explained to me that he was giving me a "simple" speeding ticket, not one of those complicated ones.
The buildings Morgan Stanley is giving up are One Post, 201 California St., Foundry Square I, 60 Spear St. and 188 Embarcadero, Barnes said. The bank will continue to own the five other office buildings it acquired in the deal, Barnes said.
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What Morgan Stanley is doing is called a deed-in-lieu of foreclosure and is, as you say, jingle mail but in nine digits. It's smart of them to do this as it saves on legal costs, and the price of the properties has to reset to market (whatever that is) eventually. Is market down 50%? For large loans that does not seem so far off the mark.
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