FT: Irish Banks Writing Down Professional Mortgages by 25%

Banks Write Off Debt for Landlords

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

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

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

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

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.

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.

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

  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.

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?

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

It’s an asymptote in mathematical parlance :nin

Or in street parlance, fat chance.

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.”