National Assets Management Agency to recover only €34.1bn on developers debts of €74bn it acquired

Last Thursday  Michael Noonan, Finance Minister, replied to a question in the Dail from Paul Murphy, AAA/PBP, about the final amount which the National Assets Management Agency is expected to recover on its debts relative to the €74 billion of loans it acquired and the amount recovered to date by year. 

 Mr Noonan replied that  "NAMA originally paid €31.8 billion to acquire a €74 billion loan book, comprising of 779 debtor connections. I am advised that, as at 31 March 2016, 442 debtor connections with a par debt of €18.5 billion had exited NAMA. This comprises debtor connections that reached a final agreement with NAMA and debtor connections whose loans were sold. 44 debtor connections have repaid their par debt in full. I am further advised that the 442 debtor connections have repaid €9.6 billion to the Agency.

Mr Paul Murphy  explained Mr Noonan's reply in his facebook page

Paul Murphy AAA/PBP

Paul Murphy AAA/PBP

"The scale of the write-off illustrated by these figures is immense. The fact that of 442 debtors exiting NAMA, only 44 debtors have paid their debts in full proves the fact that NAMA has been used as a life support machine for developers and an agency for bailing them out.

With a collective 398 debtors having had €8.9 billion in write off, that means an average write-off of over €24 million for each developer, at a time when ordinary mortgage holders and tenants of repossessed buy-to-lets are being made homeless. To cap it off, the state isn’t even ending up owning these debtors’ properties but has been selling them on to vulture funds whose business model is to make a 30% profit in three years – another potential loss to the taxpayer in effect.

The answers also state that NAMA expects to make a €2bn ‘surplus’ relative to the €31.8bn it paid for the loans with a par value of €74.1bn. In other words, by the time it winds up it will have written off €40bn in debt - €8.9bn has been written off so far, leaving €31bn to go. At the time NAMA was set up, then Finance Ministser Brian Lenihan promised that the developers would be pursued for every penny they owed. Now we’re supposed to swallow a €40bn loss as a ‘surplus’ or profit.

Instead of being this life-support machine for developers, NAMA should be democratised and transformed into an agency to deliver social and affordable housing, using, for example, the over 1,100 hectares of residential land NAMA controls in Dublin alone – enough for up to 110,000 homes."

see Oireachtas debate: Thursday April 14, answers 72-75

Mick Wallace, Ind,  speaking in the Dail on April 14, on Housing Crisis, NAMA and Vulture Funds.