Friday, July 25, 2008
Mortgage-Lobby Chief Resigns
WASHINGTON -- The chief of the mortgage industry's most powerful lobby group resigned Tuesday, just as the industry is defending itself from a hostile Congress and a punishing housing slump.
Jonathan Kempner, president and chief executive of the 2,400-member Mortgage Bankers Association, will step down when his contract ends Dec. 31, he said. He will be succeeded by former board Chairman John Courson, who coordinates the association's state-level lobbying. Mr. Courson immediately will take the post of the association's chief operating officer.
Mr. Kempner's departure coincides with deep troubles at the group, which this year faces its first financial loss since he took over in 2001.
Mr. Kempner, whose annual compensation tops $1.2 million, piloted construction of a swanky office building for the association. The $100 million project flew straight into a market meltdown that has cost the group more than 500 paying members over the past 18 months.
The association moved into the 10-story tower in June, while five floors in the 160,000-square-foot building stand empty; not a single tenant has signed a lease. Meanwhile, the association continues to pay rent on its former headquarters.
Mr. Kempner said the Bankers building was performing as anticipated. The group has yet to complete the amount of its projected loss for 2008 and 2009.
The membership decline, he said, has "stabilized, [but] there's no way to put lipstick on that pig."
A decline in revenue has the association contemplating a special assessment on its remaining members to cover operations and lobbying costs, spokeswoman Cheryl Crispen said. It has laid off 12 of its 154 staffers.
The Mortgage Bankers Association's membership once included Countrywide Financial Corp., which has been hit hard by rising defaults on housing loans to subprime borrowers, or those with poor credit. Countrywide was purchased by Bank of America earlier this month.
Despite such difficulties, the association has increased its campaign contributions to members of Congress this year, some of whom expressed surprise at Mr. Kempner's resignation.
The political action committee of the Mortgage Bankers Association has spent more than $900,000 in the election cycle so far, including giving about $429,000 directly to the campaigns of members of Congress, according to the Center for Responsive Politics. That cycle covers the period since the beginning of 2007. Many of those lawmakers serve on congressional committees that oversee mortgage lenders.
The association's troubles come as Congress weighs a housing-rescue bill with broad implications for lenders, who will be under new pressure to work with borrowers in danger of losing their homes.
The group's serial problems have left Mr. Kempner "exhausted," two people with knowledge of the situation said. Mr. Kempner said he resigned after a long discussion with his wife.
"It has been a wonderful experience, [but] given all the pressures...we've been talking over the past couple months and thought it would be wonderful to do something else," Mr. Kempner said. He said he has no immediate career plans.
Mr. Kempner led the association from a period during which it was generating losses of $10 million a year to surpluses that averaged $4 million, through 2007.
Under his leadership, the association doubled its revenue and operating-reserve fund, while scoring a series of lobbying victories, a company statement said. Kieran P. Quinn, the group's board chairman, called him "an exceptional leader...the entire M.B.A. family will miss him."
--Louise Radnofsky contributed to this article.
Write to Elizabeth Williamson at elizabeth.williamson@wsj.com and Damian Paletta at damian.paletta@wsj.com
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