Lenihan: Property won't be bought back at discount
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Friday July 31 2009
FINANCE Minister Brian Lenihan insisted yesterday the Government will not allow the developers who "brought us to this hazardous position" to buy back their properties from NAMA at a discounted price.
Mr Lenihan said the Government had the right to restrict certain individuals from acquiring land from NAMA.
"Yes, we will have the powers to preclude certain buyers, and, yes, it will be my intention to exclude the persons who brought us to this hazardous position," he said.
While this restriction will prevent the developers buying back their land at a much lower price, it will also prevent the banks re-engaging in property lending with the same developers.
And while the Government does not envisage NAMA as a provider of funds, the minister said it may lend money to developers who were not in default, and who had certain developments close to finalisation.
NAMA would lend them money to finish off the development on the basis that this would result in "a better outcome for everyone", Mr Lenihan said.
Interestingly, the legalisation also states that NAMA will also not sell any property unless the buyer can produce a tax clearance certificate.
Separately, the Government has bowed to pressure from the International Monetary Fund that NAMA legislation leave open the possibility of the 'bad bank' taking over other classes of loans, such as mortgages, if necessary, as the economy deteriorates.
However, Mr Lenihan said yesterday he did not see NAMA ever being expanded to cover other loan classes.
When the board is up and running, NAMA will consist of a seven-man board. The board is appointed by the Finance Minister and seconded from the National Treasury Management Agency (NTMA).
Members of the board must have expertise and experience at a senior level in one or more areas ranging from finance and economics to law, valuation and risk management. The key role of chairman has yet to be decided.
Where people are seconded from the NTMA, they must provide a statement of interests, assets and liabilites, to prevent a conflict of interest; and members will have three months after their appointment to present the minister with a tax clearance certificate.
- Maeve Dineen and Joe Brennan
