FT: Irish Banks Writing Down Professional Mortgages by 25%

[fungus]

Banks Write Off Debt for Landlords

ft.com/cms/s/2/e54b8042-200a … z1B2zwriVz

Several of the UK and Irish banks that received government bail-outs are **offering to write off up to 25 per cent of a mortgage debt **for professional landlords and developers – just to encourage them to move to new lenders.

Anglo Irish Bank – the institution at the centre of Ireland’s property meltdown and the recipient of €30bn of government money – is one of a number of lenders willing to let certain property owners off a proportion of their debt if they refinance elsewhere.

[yoganmahew]

So now they don’t even need NAMA to do it…

[The_Unwelcome_Guest]

Eh, this is all premised on the basis these people can get er, financed elsewhere!

[mr_anderson]

@yoganmahew

So now they don’t even need NAMA to do it…

No no, remember … NAMA is the only game in town.
Nothing to see here folks, kindly move on.

[JohnnyTheFox]

@The Unwelcome Guest

Eh, this is all premised on the basis these people can get er, financed elsewhere!

It was a 50%+ write down, rather than 25%, and it wasn’t a NAMA bank, but this came from a reliable source with first hand knowledge.
viewtopic.php?f=19&t=32128&p=464481#p464481

[Negative_Covenant]

Sounds like a good model. Perhaps the ECB would do the same with the debt owed to them by Irish banks. Or maybe they could but portuguese bonds on the secondary market and restructure them to reduce the nominal value to the price they paid.

Anyways… I have heard rmours BoSI are willing to write off substantial amounts if their borrowers can refinance elsewhere. No doubt it is the NAMA’s banks that are providing the new finance! Actually, this is probably a good thing if the loan is commercially prudent. The debt gets written down substantially, the errant creditors pay the price and irish businesses survive. Apart from those few positives though I am furious.

[The_Unwelcome_Guest]

@Negative Covenant

Apart from those few positives though I am furious.

Yeah, alot of legal fees foregone there! Not to mention the FF favours that will never be cashed in!

[johnnyskeleton]

1. I move my €1m loan from Anglo to AIB and get it reduced to €750k in the process.

2. I move my €750k loan from AIB to BOI and get it reduced to €560k.

3. I move my €560k loan from BOI to Anglo and get it reduced to €420.

Repeat until it is paid off.

[weathervane]

2 issues with the article:

Firstly it says the banks are incentivised to write the debts down by 20-25% becuase they’d only get 50% from NAMA - but NAMA isn’t (currently) taking mortgage debt as far as I’m aware.
Secondly what bank is going to refinance these distressed debtors?

[yoganmahew]

@johnnyskeleton

Repeat until it is paid off.

Tut, tut. The arrow never makes it to the target…

[JOE]

@yoganmahew

@johnnyskeleton

Repeat until it is paid off.

Tut, tut. The arrow never makes it to the target…

It’s an asymptote in mathematical parlance

[BrendanG]

@JOE

@yoganmahew

@johnnyskeleton

Repeat until it is paid off.

Tut, tut. The arrow never makes it to the target…

It’s an asymptote in mathematical parlance

Or in street parlance, fat chance.

[johnnyskeleton]

@JOE

@yoganmahew

@johnnyskeleton

Repeat until it is paid off.

Tut, tut. The arrow never makes it to the target…

It’s an asymptote in mathematical parlance

But banks are required to round down at 0.4c, no? Although it would be funny to be caught in a negotiation deadlock “I have a mortgage for 0.6c with your bank, will you write off 0.2c and I’ll move it to another bank?” - “Sorry, that’s a 33% discount and we can’t give you that much off your mortgage.”