NAMA - Only 33% of Loans are Performing

[C. Flower]

Brendan McDonagh's report to an Oireachtas Committee today confirmed that only 30 % of loans are performing and not 40% as "expected".

That number is likelier to fall than rise.

[disability student]

Where is the data that we needed to see to make an informed judgment not on his sayso (Brendan Mc Donagh)??

Does NAMA more aptly named as SCAMA provide data??

[C. Flower]

http://www.oireachtas.ie/parliament/...e-1736-en.html

An up to date report from Simon Carswell -
http://www.irishtimes.com/newspaper/...reaking54.html

The National Asset Management Agency (Nama) has found up to 100 per cent speculative lending on agricultural land was “approved at all levels within the banks” and that only one-third of loans due to transfer to it are generating interest repayments.
Nama chief executive Brendan McDonagh told the Oireachtas Committee on Finance and Public Service this afternoon the agency was working on a revised business plan and hoped to have this completed by June.
The original estimate was that 40 per cent of the loans being transferred to Nama would generate interest repayments.
He went on to say that Nama may knock down some vacant homes. The agency "may well be faced with the very difficult decision of perhaps knocking down certain developments," McDonagh said.
"We can all see land and half-built developments which should never have been contemplated," Mr McDonagh said. "It is hard for anyone with an objective view to see how they made sense even at the top of an overheated property market."

[ang]

Indeed, but didn't that include the ones that have been rolled up which is somewhere between 12%-15%.

[C. Flower]

Indeed, but didn't that include the ones that have been rolled up which is somewhere between 12%-15%.

Not sure I understand you, but what strikes me is he says that 33% are paying interest. How many are paying off any of the capital ?

[DCon]

If a developer owed a bank 100 million and NAMA paid the dodgy bank 47 million for the loan, will NAMA be happy once they have recovered 47 million (recovering any more will be a "profit") or will they push for the full 100?

[ang]

Not sure I understand you, but what strikes me is he says that 33% are paying interest. How many are paying off any of the capital ?

I probably need to listen to that again but when Keiran O' Donnell questioned him on that 33% he stated that 12%-15% included the rolled up interest loans which in turn are actually considered performing loans by banks.

EDIT MR Mc Donagh explained that the banks had been shall we say economical with the truth and they do not expect that 33% to perform, that was where the 12%-15% came into play.

[Victor Meldrew]

Not sure I understand you, but what strikes me is he says that 33% are paying interest. How many are paying off any of the capital ?

A lot of 'developments' were interest only. These will never come good. Are any of these in NAMA?

[C. Flower]

A lot of 'developments' were interest only. These will never come good. Are any of these in NAMA?

My guess is that most of the NAMA loans were on an "interest only" basis, starting 12 months after a development commenced, for a fairly loosely defined period, after which the capital would be paid. The Banks have been rolling over the interest (i.e. not requiring it to be paid) and still saying that loans are performing if any bit of interest came in.

These loans worked fine when there was a strong market for housing - someone could do a big development without putting any money up.
Often there would be enough units sold to pay off the loan as soon as the interest payments were due. This was "free money" and very dangerous as it allowed the amount of development going on to mushroom, unlrelated to any collateral other than the developments themselves.

I would really like to get a crystal clear definition from NAMA and the NTMA as to what they mean by a "performing loan".

[C. Flower]

The Courts are not going to be letting developers back out of any commitments to buy land.
http://www.breakingnews.ie/ireland/c...ph-453774.html


The big winners in all this have been the people who sold land in the last five years at vastly inflated prices.

[DCon]

The big winners in all this have been the people who sold land in the last five years at vastly inflated prices.

Vote FF. The farmer's party.

[Victor Meldrew]

The Courts are not going to be letting developers back out of any commitments to buy land.
http://www.breakingnews.ie/ireland/c...ph-453774.html


The big winners in all this have been the people who sold land in the last five years at vastly inflated prices.

Wonder where all that money was invested

[C. Flower]

Wonder where all that money was invested

Some of it went into the Irish banks, but farmers are inclined to buy land. Quite a bit has been bought in places like Brazil and Poland.

[ang]

Just adding a link to Brendan Mc Donagh of NAMA opening statement to committee:-

http://www.nama.ie/Publications/2010...e13Apr2010.pdf

[Ah Well]

The head of the National Asset Management Agency has told an Oireachtas committee the agency will 'inevitably' be faced with the prospect of knocking down certain developments.

Brendan McDonagh of NAMA told the Oireachtas Joint Committee on Finance and Public Service that the agency would take a 'strictly commercial view' of unfinished building projects, and would not give funding to complete them for the sake of it. http://www.rte.ie/business/2010/0413/nama.html

The Lyrics to "Build" by the Housemartins seem terribly apt


"Clambering men in big bad boots
Dug up my den, dug up my roots
Treated us like plasticine town
They built us up and knocked us down
From Meccano to Legoland
Here they come with a brick in their hand
Men with heads filled up with sand
It's build

It's build a house where we can stay
Add a new bit everyday
It's build a road for us to cross
Build us lots and lots and lots and lots and lots

Whistling men in yellow vans
They came and drew us diagrams
Showed us how it all worked out
And wrote it down in case of doubt

Slow, slow, quick, quick, quick
It's wall to wall and brick to brick
They work so fast it makes you sick
It's build

It's build a house where we can stay
Add a new bit everyday
It's build a road for us to cross
Build us lots and lots and lots and lots and lots

It's build

Down with sticks and up with bricks
In with boots and up with roots
It's in with suits and new recruits
It's build"

[ame="http://www.youtube.com/watch?v=DEPvsJ3ZiEQ&feature=player_embedded"]YouTube- The Housemartins - Build[/ame]