NAMA may knock down some homes, McDonagh says
The National Asset Management Agency may knock down some vacant homes built during the property boom, the head of the agency said.
“We can all see land and half-built developments which should never have been contemplated,” NAMA chief executive Brendan McDonagh told a Dail committee today.
“It is hard for anyone with an objective view to see how they made sense even at the top of an overheated property market.”
The stock of empty homes in Ireland soared 30pc to 345,000 houses in the three years through 2009, a report showed earlier this month.
NAMA aims to buy €80bn of property loans as part of a government plan to free up lenders. If borrowers don’t repay their loans, the agency can seize the underlying asset.
NAMA “may well be faced with the very difficult decision of perhaps knocking down certain developments,” McDonagh said. Most of the homes are outside Dublin.
During the boom, there was a “mindless scramble to funnel lending into one sector at considerable pace and of a reckless abandonment of basic principles of credit risk and prudent lending,” he said.
The agency aims to transfer all loans by the end of the year, and no later than February 2011, the CEO said.
The discount on the first tranche of loans with a nominal value of €16bn is expected to be about 50pc, McDonagh said. Two-thirds of the first tranche of loans are not “cashflow producing,” he said.