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Pre NAMA rewriting of loans by banks

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  • 28-09-2009 7:22pm
    #1
    Amhran Nua
    Closed Accounts Posts: 4,124 ✭✭✭


    Interesting news by Dr. Constantin Gurdgiev on what appears to be a rewriting of loans by the banks prior to NAMA valutions in order to maximise returns.
    So I was told today, by a senior banker, that banks have been actively re-writing non-performing loans (since at least April this year) under new contracts with extended principal and interest holidays in covenants. These, in preparation for Nama, are priced at higher rates so they can get more on the loans once Nama discount applies.

    ...

    Whether you do or not, one thing is clear - if you are a bank you had no incentive to manage your stressed loans since the very least this April. And you had a massive incentive to push up the face value of the loan without forcing it to become non-performing. The latter can be done by re-writing the loan with new roll up covenants.


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