Top 10 developers yet to hear from NAMA over loans
No NAMA official has yet contacted any of the top 10 developers due to transfer €17bn worth of assets to the agency by the end of the month.
NAMA officials believe that because the loans haven't been transferred yet, they have no authority to contact the borrowers who are still legally clients of the banks.
Once the loans are transferred, NAMA will write to each developer requesting that they produce a business plan within one month.
If a borrower fails to produce a credible business plan within the set timeframe, it is understood that NAMA will produce one for them.
NAMA has been beset by delays over the last number of months, but sources close to agency said it is ready and 'primed' for the loan transfers to begin.
"We expect to be intensely busy over the coming weeks as we deal with the transfer of over 1,000 individual assets," one source said.
Following recommendations from the EU, after it signed-off on the NAMA plan last month, a revised valuation methodology was signed into law by the Finance Minister Brian Lenihan last Wednesday.
Crucially, the net effect could change the amount being paid by the taxpayer for €77bn of loans.
It is quite possible that the allowance on the long-term economic value of the loans which the finance minister estimated at 15pc last September could now be lower.
However, this won't become clear until the loans are transferred and the final current market value figures are known.
If this were to happen, a higher discount or 'haircut' would be applied to the banks and the taxpayer would end up paying less than estimated €54bn for the risky property loans.
The original discount, or haircut was estimated to be 30pc. Market speculation now places it closer to 35pc.
In approving the NAMA plan, the European Commission also recommended that NAMA revalues the administration and legal costs associated with transferring the loans.
Last night, sources close to NAMA said the banks and not NAMA will pay all legal fees and due diligence in transfers. Notwithstanding the progress made, delays in transferring the loans are still possible if the EU insists on auditing the loans as they move across. The EU appointed the Financial Regulator who in turn appointed Ernst & Young to conduct the audit of the loans on behalf of the European Commission.
Ernst & Young is the former auditor of the now nationalised Anglo Irish Bank.
The top 10 borrowers being moved in the first wave of transfers to the state agency include Liam Carroll; Bernard McNamara; Sean Mulryan of Ballymore; financier Derek Quinlan; Dublin builder Gerry Gannon, co-owner of the K Club golf resort in Co Kildare; and Galway businessman Gerry Barrett.
NAMA is taking over development loans as well as associated loans secured on assets such as investment properties provided as collateral for development loans.
A significant number of the associated loans are being serviced with repayments by borrowers.
Contrary to weekend reports, the long-term economic value will apply to all properties including buildings and development lands.