Yes it is true NAMA are about to embark on a disposal of a limited number of properties but at less then what they are being offered and at the same time incurring large amounts of professional and legal fees in doing so. Thus having the effect of INCREASING losses on loans!
Today, I was contacted by a man who had an investment property on which he owed €2.4m to Anglo (now IBRC). The building cost him €3.2m and so he had all of his personal wealth in the building of €800,000. He could not keep up with his loan repayments and so NAMA appointed a receiver. Since the receiver was appointed the rental income from the property has halved. As with every case I have ever been involved with as soon as a receiver is appointed the value of the asset and income associated with it collapses. This case is no exception. It is with amazement that I see banks have not gained that simple knowledge too.
Now NAMA are proposing to sell this same building for €300,000 even though the original owner tried to renegotiate a restructuring of his debt to a level which would be more sustainable and guarantee NAMA treble the return which they are now willing to accept. Not only are they denying a man and his young family a chance to regain some of their losses but also they are denying the Irish Taxpayer a better return for its massive investment in NAMA.
When NAMA are questioned about this they say they have been given a mandate by the GOVERNMENT that there is to be NO DEBT FORGIVNESS! Yet they are willing to take less for a property then they are being offered and write off the larger amount! They have no chance of getting anything else from the man who called me because he has nothing else to give! What is this achieving except generating fees for the professionals and misery for people who are the ones who can get Ireland out of this mess?
This man has done nothing wrong except make an investment which went horribly wrong in an extraordinary time. He did not borrow money with the intention of not repaying it, he has not transferred assets to his wife or children, withheld taxes or defrauded the revenue. He has not accepted bribes or tried to buy political favours. Yet he is being treated worse than those who have because he is being denied a second chance.
Surely the whole point of NAMA and refinancing the banks is to give people a chance and if that means writing off some loans then let it happen.
Paul Carroll NEO Financial Solutions 01 437 0908