NAMA Guaranteeing Negative Equity Portions of Home Loans


Would this latest announcement by NAMA be the reason behind the recent central bank report on undervalued houses?


As usual, a shallow, credulous report from Sean Whelan on RTE with one single talking head - yeah, an EA telling us about the upsurge in interest in property. Whelan is an absolutely shocking reporter. So far out of his depth on economics it’s not funny. He seems constantly bewildered.

He did say that most of the 600 other properties that might eventually become part of the NE scheme were houses, not apartments. Which is rather interesting I thought. Because if NAMA has 10,000 properties, and no fewer than 750 are houses, that is a higher proportion than I would have thought.

I also wonder how they chose the properties to release. Legal freedom might have dictated it. Or maybe they are releasing the best they have. Or, perhaps, not the best just yet so they can launch the scheme, get people talking, and then launch the best stuff. Fuck me, who knows how these people are thinking.


It would seem that all the vested interests have a plan.


Does anyone know the full breakdown in selling prices for Carrickmines ?

One of my clients, who owns a two-bed, wants to know what level of NE he’s in. :frowning:


Seems pretty farcical with so many cash buyers out there.


I can tell you one thing the Naul properties are way way overpriced, knowing a couple of properties around there with land and what offers are on them. This is a sucker trap, plain and simple.


To the people asking are they going to add 20% to the asking price, I doubt it, NAMA will want to shift these apartments at some stage. I assume they want to sell them - they have had their fingers up a dark place up to now. So I doubt they would be that transparently silly, but there will be some confusion, as private sellers will have to react, so the NAMA stuff may seem relatively dear in the future esp. if NAMA are not realistic (with them being a state established body, with ‘Long Term Economic Value’ notions in their constitution).


If you and NAMA were both selling similar products (houses/apartments) into this market and the latter - a state-owned entity - could promise a favourable deal with the banks (a number of which are also state owned) would you not have a reasonable case for the European Commission’s DG Competition investigators to pour over?

You’re plainly being disadvantaged by state intervention in the market, which sounds like the definition of what EU state aid rules were designed to prevent. Maybe they’ve cleared this in advance. Or maybe not…


I hope the name-the-scheme competition is still open, as I am not that impressed with the entrants so far.

From today forth, it shall be known as the Naturally-NAMA-Know-They’ll-Fall-More-Guarantee.

Seriously though, who is this guarantee designed to reassure? The obvious candidate is Cautious McSavvy, Canny’s younger sister, who just got her first job after finishing her masters, and whose parents are still nagging about getting on the metaphorical ladder, like they have been since 2003.

Are we forgetting about someone? How about the traumatized Irish banks? The 10% deposit plus 20% N.E. clawback amounts to 30% protection for them from falls in the collateral backing the mortgage. Some have said they have looked for 30% deposits since the crash, so from their point of view, this is just shifting the figures around, and why they agreed to support it. Note that it does make a difference from the buyers point of view, as it alleviates a negative equity scenario by as much as 20%.

So it looks like the banking industry need 30% reassurance today, which is telling coming from people who were tragically late to the property bear party.


Anyone know how this scheme works with the interest?

As I understand it, NAMA don’t get the 20% from the bank until the 5 years elapses. In that case, the buyer should be saving themselves the interest on 20% of the property sale price for 5 years.


The ironic thing about this ‘plan’ is that NAMA is creating a ***CEILING ***on prices, not a floor !

Example :

Two identical houses in the same estate.

The private seller is @ €300,000.
The GuaranteedNAMA™ is @ €300,000.

Because of the NE insurance, no one in their right mind will buy from the private seller at the same price as the GuaranteedNAMA™ house, so the private seller will be forced to reduce below €300,000.

But here’s the thing, until all GuaranteedNAMA™ properties are sold, no property will be sold above the €300,000 price.

Hence, by their action, NAMA is creaing a ***CEILING ***on prices, not a floor !



Our friends over at askaboutmoney are in agreement with us


I like the fact that an “independent” person will be valuing the properties. Ask NAMA can you employ your “independent” surveyor as opposed to them employing theirs :stuck_out_tongue:


Brendan Burgess opening line in the second post made my ironing board burst into flames!


Surprised he didn’t tell everyone to fill their shoes with houses :smiley:


Is this not a good thing.

A government agency is puting a ceiling on house prices.

Maybe this action will even halt the dead cat bounce :slight_smile:

Otherwise ?


Right posted a WIW for Ballincollig yesterday one of the houses is a two bed asking €175k walk in condition wouldnt be mad about some of the furnishings but that is a personal thing, all white good included. I would expect it to go for €150/€160k.
Anyway my mate who is interested in buying rang the auctioneeer who is listed on the Nama site he “offered” basically the same house in a different part of the development with a builders finish i.e fitted fireplaces built ins fitted kitchen but no white goods for …€130k. So I would be interested in thought particularly on the basis that my mate is mortgage approved already

I’m posting this in the WIW Ballincollig in case we have any future buyers who might be interested


NAMA says just under 2,000 of the 10,000 are houses (allegedly…). … s-control/


If we set aside the obvious for a moment and believe that NAMA are not shills, is it possible that they know they bought the loans for more than the properties are now worth? Politically, they can’t sell them for less than they bought the loans for (and they’ve publicly said that).

Maybe this is their way of writing off 20%, but kicking the can down the road 5 years. Sell for X now, don’t have to write down the 20% for 5 years.


Wow, very negative Indo main headline tomorrow: “Bad bank accused of inflating prices for house deal”.

Meanwhile at the IT, their main headline: “NAMA house sales show price drop of up to 80% from peak”.

Not exactly what NAMA were hoping for I wouldn’t have thought. Such instantaneous cynicism from the big two is a first I think for one of these harebrained property schemes. (No links at time of posting - seen on Vincent Browne).