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PROPERTY: NAMA says no to developers' calls

PROPERTY developers have not grasped the reality of the economic downturn with one developer suggesting to the National Asset Management Agency (Nama) that he should be paid an annual salary of €1.5m.

Frank Daly, chairman of the agency, said that suggestions such as this do not get past "first base".

"The jets, the yachts, the Bentleys will not be supported by Nama," he told a Dail Committee on Public Accounts.

The agency said that the majority of larger borrowers would have transferred their property to other persons, usually to family members.

The developers said that this was due to tax planning, providing for family, and following the advice of professionals.

"But I would be pretty sceptical," Mr McDonagh said. "A lot knew what was coming, especially if they had given personal guarantees."

The agency has been inviting borrowers to submit business plans and has received 30 to date.

NAMA expects that by the end of next month, it will have acquired loans with nominal balances of €73bn at a cost of €30bn. This is a discount of about 58pc.

In its original draft business plan, NAMA anticipated it would acquire loans worth €77bn, with €62bn eventually being repaid by borrowers.

Banks told them that 40pc of loans were performing.

But the reality was dramatically worse with only 25pc of loans were performing, and some loans were not backed up by security at all.