If you are an ordinary John and Mary looking to buy a house from NAMA, then you might have thought that the only financing option available from NAMA was its much-vaunted 80:20 Deferred Payment Initiative or “negative mortgage” as most of us call it, the financing product launched by NAMA in May 2012. But a fortnight ago, in what looks like a highly Jesuitical response, NAMA confirmed that it would examine “deferred payment” for residences on a “case by case basis”. This led to the blogpost on here saying that NAMA was offering “bespoke financing” for Irish homes.
Yesterday, in the Dail in a response to a question from the Sinn Fein finance spokesperson Pearse Doherty, Minister for Finance Michael Noonan confirmed that NAMA had done “a few” of these bespoke deals, but he declined to provide any further details. This is the full exchange (with emphasis added)
“Deputy Pearse Doherty: further to Parliamentary Question Number 60 of 13 June 2012, if he will advise in relation to residential property, and apart from the National Assets Management Agency 80:20 Deferred Payment Initiative, the total value of deferred payments sanctioned by NAMA; the maximum length of time for which payment is deferred and the average interest rate charged on deferred payments..
Minister for Finance, Michael Noonan: NAMA has advised me that the information sought by the Deputy is commercially sensitive me but also that the instances are few where NAMA has provided this facility. Disclosure of the information would undermine NAMA’s future negotiation position in respect of the disposal of residential properties under the control of its debtors and receivers and could thereby reduce the realised proceeds for the Irish taxpayer from such sales. Full details of NAMA’s 80:20 Deferred Payment Initiative are available on the Agency’s website, http://www.nama.ie”
So how do you get access to these bespoke financing deals for Irish homes from NAMA? Obviously, the Minister isn’t providing information, so the following is merely my imagining:
When you first meet the NAMA agent and shake hands, hold onto the agent’s hands and with you middle finger, tap their wrist three times, whilst at the same time rubbing your nose from top to bottom with the pinky on your left hand, and utter these three words : “Billion Dollar Baby”, BUT, and this is critically important, instead of pronouncing “billion” in the usual way : bill-yon, adopt the style favoured by the NAMA CEO, Brendan McDonagh and pronounce it bill-en. You might need to raise your left foot at least five centimetres off the ground also.
Sound ridiculous?
Perhaps as ridiculous as an Agency set up with €30bn of our money selling Irish homes in a new and hitherto secret manner, where part of the purchase price is deferred, but on what terms, who knows. The Minister is not even confirming the total value of these bespoke deals undertaken to date.
On a more serious note, one of the homes that has apparently been sold with this bespoke financing was sold for several million euro and 20% of the purchase price was deferred for several years. But who knows what secret deal NAMA might give you if you ask in the right way.
So NAMA’s negative equity mortgage product is not commercially sensitive but their other mortgage products are commercially sensitive.
It does smack of cronyism. Do you know if these properties, using NAMA special finance, were advertised on the open market? Were any purchased by what could be described as non-connected buyers?
I’m confused.
Why would NAMA be doing single deals in the millions (or is that mill-ens?) of euros with people who simply walked in off the street?
Unless…
It is legalised corruption. On the one hand they are telling us we need databases that tell us the prices that houses are fetching on the other hand NAMA is telling us ‘mind your own business’. I knew this would happen and my suspicion is that family members or those connected to those in NAMA will be picking up these properties.
Were Health Insurers forced to make public all polices offered? IIRC they had bespoke offers for certain valuable customers (e.g. large employers) and were then forced to make these available to everybody.
I don’t see why a similar principle should not apply here.
I viewed a very nice 4 bedroom house in Gragara, Jenkinstown, Co. Kilkenny recently. I was very interested in it and the friendly estate agent explained the the background to the sale. The house is for sale for €200,000
The house was originally built by a wealthy developer in around 2004 for a family member but for whatever reason the house was not occupied by the family member but was instead rented out. The developer then entered NAMA after the crash and the house became an asset to be sold off by NAMA
According to the estate agent the current seller ‘bought the house cheap’ from NAMA and was now selling it on without alterations. The only issue the house had was that the entrance way was built in the wrong location from the road and the seller was in the process of getting retention for this. If retention was not received then the seller would build the new entrance as per the original planning. I initially didn’t think anything of this so in response immediately and naively asked ‘oh, how do you buy directly off NAMA, where do they advertise?’, to which the estate agent replied ‘oh no, the guy is from a wealthy family, well connected, so he would have known someone in NAMA’.
In retrospect it is amazing the casual way the estate agent spoke about it. He didn’t seem to think there was anything unusual about a state organisation selling off property ‘cheap’ to someone ‘well connected’, to enable the wealthy connected person to make some easy cash.
I wonder if this is the house?
http://www.myhome.ie/residential/brochure/hillview-gragara-jenkinstown-co-kilkenny/1812485
Until someone makes this line go away, it will be the answer for everything and you will just have to take,
“Disclosure of the information would undermine NAMA’s future negotiation position in respect of the disposal of residential properties under the control of its debtors and receivers and could thereby reduce the realised proceeds for the Irish taxpayer from such sales”
I can only assume the same genius with the LTEV and the overly long NAMA lifespan made this up too.
Where’s the legal guru who can make this sentence go away.
@sf ca, SNAP! Yes, that form of words is beginning to crop up, more or more, in cases where confidentiality hardly seems appropriate.
@sf ca, the other mantra that we need get used to in a societal sense is
“The Garda Press Office declined to comment, and the country’s largest Garda staff association declined to comment on the specific case for operational reasons. ”
This related to the case in Donegal where a burglary victim collected a Garda from the local Garda station because the station didn’t have any transport assigned to it at all.
http://www.irishexaminer.com/ireland/garda-driven-to-scene-of-burglary-by-victim-199600.html
So “no comment for operational reasons”
@NWL
It occurs to me, maybe it is all these years in the ‘land of the free and the home of the accountable’, but there is no yardstick or metric by which NAMA or its executives can fail.
That is a show stopper for a 30 odd billion dollar project.
A big design flaw.
Regarding secrecy:
If secrecy is that important then a small randomly selected oversight group from the electorate should be assigned immediately.
As for words….there was a time politicians said things with flair, and were even remembered for it.
Now what have we got? Nods, winks and mumbles.
@sf ca writer
”there is no yardstick or metric by which NAMA or its executives can fail” that is the exact same for all semi-state companies. They control huge assets so making profit is not a problem. Question is, are the profits generated a good return given the assets (which we own) that it controls.
Mahon Inquiry anyone? Oh,sorry. I forgot all those longrunning enquiries got no where .No one went to jail. No one was accountable. .Forget that suggestion