Why NAMA will fail



yehbut_nobut

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wow!

Recent media reports have suggested that NAMA is running into serious difficulties in valuing loans due to borrowers' lack of solid legal title to the the properties used as collateral for the loans.

Over the past decade, property developers were able to avoid paying stamp duty by not taking legal possession of acquired properties, but developing them under licence.


Brian Cowen had introduced Section 110 to the 2007 Finance Bill to close the loophole after pressure from Deputy Burton, but he never signed the Ministerial order necessary to give effect to this section.

It now looks as if Fianna Fáil's failure to act is coming back to haunt them; it could be NAMA's achilles heel.
 

charley

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so you are saying that the previous owner still holds the title and if they can't prove he sold it to the developer NAMA will be chasing broke developers with no assets
 

DCon

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Is there any end to the FF incompetence?
 

hammer

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so you are saying that the previous owner still holds the title and if they can't prove he sold it to the developer NAMA will be chasing broke developers with no assets
EXACTLY.

And the developers solicitors will claim client confidentiality over paperwork :)

Only in Ireland.
 

droghedasouth

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BIFFO's biggest wimp-out to the Galway Tent comes back to bite him in the bullox.

How very appropriate.
 

hammer

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€250m saving a year by "avoiding legally" :) stamp duty.

Now you know where the money came from to help party coffers.
 

charley

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is there any figures as to how many of these properties are in title limbo ?
 

18 Brumaire

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This is all nonsense. If there was no title no security could have been given in the first place. I can't imagine any solicitor being so foolish as to give an undertaking to a bank in these circumstances (or can I?). If that is the case then the professsional indemnity insurers will be coughing up.
 

hammer

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This is all nonsense. If there was no title no security could have been given in the first place. I can't imagine any solicitor being so foolish as to give an undertaking to a bank in these circumstances (or can I?). If that is the case then the professsional indemnity insurers will be coughing up.


Were you asleep for the last 2/3 years ?

Did you read The Examiner article ?
 

cyberianpan

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I'm not sure why the title owner couldn't offer them up as security for the developer. I suspect this relates moreso to the general shoddy security documentation ... and developers who have clear title are willing to fix that without contest

Also Joan Burton... who is normally pretty good... goes quite mad:

"As a result of his failure to close this loophole, it will now cost the Irish taxpayer not just the €250 million that the Taoiseach's own consultants, Goodbody Consultants, predicted at the time, but probably now a further €20 billion in bad loans. Not only are those loans bad but the underlying securities have no title.
1) The claim that the tax loophole is somehow responsible for causing €20bn bad debts is crazy
2) Her claim that €20bn lack sound security due to this is dubious


cYp
 

MsAnneThrope

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is there any figures as to how many of these properties are in title limbo ?
From the Examiner article:

Mr Cowen in 2008 as the property boom was slowing commissioned a study into the impact of closing off the loophole and was told by Goodbody Economic Consultants that it could have a negative impact on the property market.

The report said that over 40% of all land transactions in the country were using the loophole and they estimated that in 2006 its use cost the Exchequer about €250 million
 

charley

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i wonder have any farmers bought the sites back off the developers for a few hundred euro ?
 

hammer

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If any Bank senior official got kickbacks on loans advanced to developers should he be held liable for part of the loan if NAMA come a calling :)
 

DCon

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i wonder have any farmers bought the sites back off the developers for a few hundred euro ?
I wonder if any farmers set up development companies, sold their own land to the company (financed by one of the NAMA banks), avoided stamp duty on the transaction, and now will end up with their land back after the development company default on the loan they cannot/do not want to pay back.
 

mr_anderson

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Whilst I've no doubt FF will find a loophole to this loophole, I believe history will record that Joan Burton played her part in trying to prevent this NAMA crime from occuring.

She has outshone everyone else on the opposition benches from day 1 on this topic.

I'm not a major fan of labour, but were she in my constituency, she would get my #1 vote.

She is one of the few of our elected representatives who can really wrap their heads around what is about to happen.
 


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