NAMA to reduce number of developers it manages itself
Published 20/03/2010 | 05:00
NAMA, the toxic loans agency, is planning to slash the number of developers it deals with directly, handing back control of their loans to the banks.
Meanwhile several banks are objecting to the initial loan notifications sent out by the agency this week.
The original business plan of NAMA envisaged the agency directly managing the loans of up to 150 developers, but this is proving onerous and NAMA has told bank executives it would prefer to reduce the number of borrowers it manages itself. This will mean the banks taking on a greater administrative burden, although they will be paid an administration fee for managing loans.
Sources said NAMA could end up only dealing directly with as few as 80 borrowers, but last night nobody from the agency was available to comment on this figure.
NAMA, headed up by Brendan McDonagh, this week sent out what are called "acquisition schedules" to Bank of Ireland, EBS and Irish Nationwide. These schedules list the assets to be transferred, their values and how these values are calculated.
The three institutions now have a 28-day period to correct obvious errors or amend the schedules. There are also procedures for the banks to object to the inclusion of particular assets in the schedules and even object to the valuations themselves.
It is understood objections have arisen in the case of two institutions, although none of three banks were prepared to comment yesterday.
One bank is believed to be objecting to the valuations, while another is claiming there are errors in its schedule.
Government sources last night said some banks were unhappy with the kind of discounts being proposed for the first batch of NAMA loans.
The discounts are considerably above the "nominal'' 30pc figure given by Finance Minister Brian Lenihan last year.
The sources said while nobody was "shocked'' at the discounts, the banks were unhappy such a severe approach was being taken.
Anglo Irish and Irish Nationwide remain the institutions expected to take the largest discount on their loans. Both institutions may yet have to live with a 40pc discount on the book value of the loans being transferred to NAMA.
The loans in the first tranches remain in the ownership of the banks during the 28-day period when they are allowed to object. Once this period expires the assets are finally in the ownership of NAMA.
All certificates, warranties and other documents attaching to the loans must then be transferred over to NAMA.
The banks then must try and contact the borrowers within 60 days to tell them their loans are now officially owned by NAMA.