Let NAMA developers buy back loans at discount, says FG TD
THE Government should scrap its ban on NAMA selling back heavily discounted property loans to the developers they took them over from, a prominent Fine Gael TD has said.
Aine Collins, TD for Cork North West, also branded the agency as "far too powerful", and said it threatens to jeopardise Ireland's economic recovery.
The controversial proposal for NAMA developers to be able to buy back their loans at a discount comes as Finance Minister Michael Noonan and his top officials have commenced a mid-term review of the agency's operations. The announcement of the review has come following a period of intense criticism of the agency and its operations in the Dail and Seanad.
Selling the loans back to the developers at below what they paid for them would crystallise the loss on behalf of the taxpayer. But the reality is that in many cases the full book value of the loans won't be achieved again.
Ms Collins said if the developer is now in a position to pay the market value for the loan, then they should not be precluded from bidding for them.
"I am not pro-developer on this, but my concern is purely what is in the best interest of the taxpayers. If developers have been able to get fresh financing, and they are willing to pay the most, then the ban has to be lifted," she said.
The taxpayer paid €30bn for loans that were previously worth €72bn, and NAMA has said it intends to "break even".
But it is prohibited by Section 172 of the legislation from selling back those property interests to the developers involved, many of which defaulted on the loans during the crash.
Ms Collins said the ban was initially required when NAMA was established, but with the economy growing, a new approach was needed.
A spokesman for the Department of Finance said because work on the mid-term review has commenced, it would not be commenting on Ms Collins' calls.
However, her perceived closeness to Mr Noonan has led some to conclude that she may be voicing one of the proposals under consideration in a bid to test the public mood on the issue.
Fianna Fail finance spokesman Michael McGrath said such a suggestion would be "galling" to Irish taxpayers.
"I have yet to hear a logical argument to allow this to happen, and a move of this nature would represent a significant shifting of the NAMA goalposts midstream," he said.
NAMA chairman Frank Daly has strongly indicated that the agency wants permission from the Government to sell assets back to developers who have already defaulted on the repayment of their loans.
Ms Collins said NAMA is the largest single property portfolio in the world and has "too much power" and nowhere near enough oversight. She has also called for the establishment of a specific Ombudsman to oversee NAMA, to address a shortfall in accountability at the agency.
Asked for a response to Ms Collins's calls, NAMA declined to comment.