Here’s a mid-week teaser for you in the form of a multiple choice question:
Q: How many properties has NAMA so far repossessed and sold on foot of defaulting loans?
(1) Thousands, that’s what the monthly NAMA foreclosure lists show.
(2) €6,850,000 worth, because that is what NAMA says in its accounts that it has received on foot of personal guarantees
(3) None whatsoever
Surprisingly perhaps, the correct answer is (3) and that is evidenced by the quarterly “nil” returns in the NAMA reports under the heading “property sold by NAMA in the quarter”. You see NAMA has had receivers appointed who manage assets for the benefit of creditors generally and some developers have handed over an overall total of €6.85m of property that was used to guarantee loans. But NAMA has not itself repossessed any property subject to loans directly.
This oddity might explain the news reported in the Irish Times today that NAMA incorporated a new company, NAMA Asset Residential Property Services Limited on 18th July 2012 with the aim of speeding up the sale of homes for social housing. NAMA hasn’t issued a statement on the development but Olivia Kelly in the Irish Times reports that “the new company will take possession of debtor properties it deems suitable.” So we may at last see NAMA repossessing residential property for the first time.
The development is interesting because it was recently revealed that NAMA has in fact overseen the sale of only 58 properties – understood to be the 58 in the Beacon South Quarter sold to the Cluaid Housing Association in June 2011, 13 months ago – out of a much touted 2,000 being made available for social housing. The Irish Times article hints at problems “involving a range of stakeholders such as borrowers, lenders, receivers and Nama” It might also be said in fairness to NAMA, that it takes two to tango and whilst NAMA can facilitate sales, there needs to be a proactive purchaser also.
With 98,000 families representing 200,000 people on housing waiting lists in the State, any development to fast-track the provision of housing is to be welcomed.
But let me leave you with a puzzler – if it makes sense for NAMA to take possession of homes to be sold for social housing, then why not do the same for other property?
NAMA Wine Lake 
NWL I take it that you mainly mean “ghost estates” for “other property”.It would seem as Frank Daly let it slip when interviewed by Vincent Browne that NAMA is fearful of flooding the market with cheap(affordable) housing lest the bottom really drops out of the market altogether and NAMA fails to even break even in 7 or 8 years time.Hence the drip drip release of distressed property by NAMA.
Careful Now! you’ll have certain posters ranting about Frank Daly going through the WAGs drawers, if you start hinting that the noble developer’s wife be denuded of her rightful home she so slavishly worked for!
If the hoi polloi are too stupid to hide behind the mammy’s apron then they deserve to lose their houses!
@WGU, I know that you’re trying to wind me up…. but not rising to the bait. Enjoying the Galway Races, reminiscing over tents of the past, helicopters, Dom Perignon, CJH and Charlie McCreevey. Ah, those were the days!
@WSTT :-) The sport of kings, your highness!
@WGU, What has “other property” owned by the debtor got to do with the WAGs’ property? Ever heard of the rights of the individual?
How did the individual fund the purchase? Or are they all gossip-columnists-turned-property-developers?
@WGU, Mainly from giving love and affection to big thick navvies from Kerry. :-)
“The acquisition of properties will allow the debtor to reduce what it owes on its Nama loan”
That is what caught my eye.
So by how much is the property worth? Will the developer get all their money back, or 90% or what.
Fair enough, if there is a social need i.e. 98K families (any idea on the specifics about what type of family?) and the councils around the country are willing to pay the Nama SPV, but ultimately its the same money going around in circles.
Nama attempts to recoup as much value for the taxpayer.
Nama takes x amount of houses and gives it to various Co Councils.
Various Co Councils put families who fit the description for Social housing and pay the NAMA SPV a fixed rent every month.
But who ultimately funds the Co Councils?
Well its taxpayers money which funds the Co Councils!!!
Circle complete.
As far as I can see, there are only two beneficiaries.
1) Those on the housing list who will get a home funded by the taxpayer.
2) Developers who manage to shift the property onto the Co Council and get a reduction in their outstanding debt to Nama.
The taxpayer gains in that NAMA is getting income from the rented property.
The taxpayer loses in that it has to stump up more taxes to pay the Co Councils who in turn have to pay NAMA the monthly rent.
Please, somebody tell me I am wrong.
@sporthog, I asked a similar question a while back and got no answers.
Does it benefit a NAMAed developer if it is his buildings chosen to provide social housing while others lie empty, or does it hurt him, or no effect?
Cluid and Beacon came to mind, but I meant it more generally.
Big question wrt corruption potential in a secretive world
@ sf ca writer,
Yes but a mechanism already exists with Co Councils without having to go through NAMA or any NAMA spv.
The mechanism allows a owner of a residential property to hand over the home to the Co Council.
A long term lease is signed, perhaps 5 to 15 years, maybe even 20. The Co Council are free to put whoever they want from the housing lists into the property.
The landlord still owns the property, but in a “hands off manner”, a monthly rent is paid to the landlord but normally below the market rate .ie. 15 to 20%, the Co Council guarantee to return the property to the owner at a future date in good condition etc. The Council also manage the property, i.e. repairs etc.
I believe it is called the Rental Accommodation Scheme (RAS).
So there is no need for all this extra bureaucracy, Jobs for the boys, extra quangos, special advisers or jumped up box ticking chimpanzees.
But then again, never miss a opportunity to waste taxpayers money, after all there is loads of it.
Correction,
I may / may not be correct about the “management side” of the property, it may depend on the contract the particular Co Council draw up.
But the scheme exists, so why reinvent the wheel with all its associated costs?
Obviously if NAMA force a debtor to hand over his asset to the Local Authority for social housing purposes they have the proverbial two chances of collecting Personal Guarantees.
@Sporthog & @sf ca writer
I saw your posts and thought of this letter, simply entitled, ‘Middlemen’ from the Indo a few months back:
http://www.independent.ie/opinion/letters/middlemen-3089289.html
“All we have seen today is money for middlemen and not one decent job proposal.”
This seems like more makey-up sales and sale prices by NAMA. The way I read this is that the SPV will overpay for developers’ properties linked to NAMA. Once more NAMA will stop at nothing to avoid the open market.
So who will provide the funds to the spv? NAMA? if so, all they’re doing is selling to themselves.
At some point we should actually look to remove this risk from the taxpayer.
How can NAMA just take possession of a property and compensate the Developer if said Developer doesn’t want to give it up (and is paying back his loans to NAMA in a timely fashion)?
Oakland Ca (across the bridge from SF, 2nd murder capital of the US) is trying to lead a nationwide movement to take on banks and get out of deals involving derivatives swaps etc with Goldman’s without paying a penalty. In FT behind pay-wall
http://www.ft.com/intl/cms/s/0/a77a14d4-d2ad-11e1-8700-00144feabdc0.html#axzz22PIvL6rj
Separate topic, but my local school district lost big big on Lehman’s., so I can see close up, failed bank(lehmans) versus propped up bank (anglo) Give me failed bank any day.At least we are not still paying.