Leo offers to sell his apartment to NAMA for Long-term Economic Value

Dannyboy83

Not sure if this link has been posted yet, but we could all do with a laugh:
http://www.leovaradkar.ie/?p=593

SineadLewis

Dannyboy83 wrote: »

Not sure if this link has been posted yet, but we could all do with a laugh:
http://www.leovaradkar.ie/?p=593

I don't think the will buy from the "little people".

The_Minister

Is it just me, or does Leo Varadkar, as a member of the Dail, show a scary lack of knowledge as to hoe NAMA works?

I know he's ****-stirring, but still, thats not how its meant to work.

Long Onion

The_Minister wrote: »

Is it just me, or does Leo Varadkar, as a member of the Dail, show a scary lack of knowledge as to hoe NAMA works?

I know he's ****-stirring, but still, thats not how its meant to work.

This is exactly what I was thinking, at least if he offered them his mortgage it would have made more sense. What a fool.

eoinbn

The_Minister wrote: »

Is it just me, or does Leo Varadkar, as a member of the Dail, show a scary lack of knowledge as to hoe NAMA works?

I know he's ****-stirring, but still, thats not how its meant to work.

It's not too far off. What he is trying to point out is that he wins(i.e the property devs), the banks win and the only people that are at risk of losing are NAMA- i.e the tax payer. It's not a perfect analogy but it gets the point across.

The_Minister

eoinbn wrote: »

It's not too far off. What he is trying to point out is that he wins(i.e the property devs), the banks win and the only people that are at risk of losing are NAMA- i.e the tax payer. It's not a perfect analogy but it gets the point across.

No.
The people whos loans are bought by NAMA still owe every penny.
They just owe it to NAMA instead of AIB, BOI etc.

If he wants to sell his mortgage to NAMA then fine, but all that means is that an organisation with even more powers to recoup the money owns his debt.

eoinbn

The_Minister wrote: »

No.
The people whos loans are bought by NAMA still owe every penny.
They just owe it to NAMA instead of AIB, BOI etc.

If he wants to sell his mortgage to NAMA then fine, but all that means is that an organisation with even more powers to recoup the money owns his debt.

He owes €350k. NAMA gives him €420k so he gives the bank the €350k and has €70k left over to buy a cheaper place. The bank gets it's money, he can go buy the same flat for €250k and the tax payer takes the risk.

P. Breathnach

If he is in negative equity, I'm prepared to buy his mortgage for the value of his home.

thebiglad

eoinbn wrote: »

He owes €350k. NAMA gives him €420k so he gives the bank the €350k and has €70k left over to buy a cheaper place. The bank gets it's money, he can go buy the same flat for €250k and the tax payer takes the risk.

NAMA does not 'give' him €420k - they loan it to him (or take over his debt with current lender to maintain the current analogy).

If NAMA took his mortgage at €420k he would then own them - there is no gain to him. Only gain could be to Nama if his property in 10 years is worth €500k (taking into account whatever inflation there has been of course).

The argument just does not make sense

Long Onion

eoinbn wrote: »

He owes €350k. NAMA gives him €420k so he gives the bank the €350k and has €70k left over to buy a cheaper place. The bank gets it's money, he can go buy the same flat for €250k and the tax payer takes the risk.

so you don't know how NAMA works either then.

The_Minister

eoinbn wrote: »

He owes €350k. NAMA gives him €420k so he gives the bank the €350k and has €70k left over to buy a cheaper place. The bank gets it's money, he can go buy the same flat for €250k and the tax payer takes the risk.

:eek: Please tell me you don't think that's how NAMA works!!

No wonder everyone is pissed off.

Firstly, by my calculation (in my head) the 420k is bollocks. The NAMA formula would get him around 365K I would have thought.

More importantly, the money goes to the bank, not the person owning the loan. The person owes the same amount, it just gets transferred to the NAMA. He still has to pay back the entire loan, he just pays it to NAMA.

Who told you that the person who took out the loan got the money?
What sense does that make?

kippy

The_Minister wrote: »

:eek: Please tell me you don't think that's how NAMA works!!

No wonder everyone is pissed off.

Firstly, by my calculation (in my head) the 420k is bollocks. The NAMA formula would get him around 365K I would have thought.

More importantly, the money goes to the bank, not the person owning the loan. The person owes the same amount, it just gets transferred to the NAMA. He still has to pay back the entire loan, he just pays it to NAMA.

Who told you that the person who took out the loan got the money?
What sense does that make?

Totally agree,
Just heard him on Newstalk there. Its a great piece of publicity but scarely incorrect in its concepts.
He made out that NAMA would "pay" him 420K for the property, with which he pays off his "mortage" to the bank and his car loan.
I am not sure whether or not he IS that stupid or whether this is a purely intention scare mongering tactic but theres no doubt a large number of the population that will believe what he is saying is true.

I hadnt calculated his figures but obviously there a whole lot of things built into the NAMA figures (including a semi insurance policy in the form of certain bonds that only have a low interest rate) that completely blows Leos figures and concepts out of the water.

The scary thing, no one corrected Leo while on Newstalk and so far there dont seem to be any people calling in to correct him. Disgrace.

Diarmuid

The_Minister wrote: »

No.
The people whos loans are bought by NAMA still owe every penny.
They just owe it to NAMA instead of AIB, BOI etc

Makes no difference to the tax payer because those guys will never be able to repay those debts. This idea that just because someone still owes the money, then everything will work out, is crazy

murfie

The_Minister wrote: »

No.
The people whos loans are bought by NAMA still owe every penny.
They just owe it to NAMA instead of AIB, BOI etc.

Sure but do you really believe they are going to chase that money, in fact they are even going to invest more money into developments to finish them instead of seizing and selling them, to basically bail out these builder tycoons.

Please don't fool yourself, NAMA is seriously flawed and I can only hope the greens vote to not support it.

eoinbn

thebiglad wrote: »

NAMA does not 'give' him €420k - they loan it to him (or take over his debt with current lender to maintain the current analogy).

If NAMA took his mortgage at €420k he would then own them - there is no gain to him. Only gain could be to Nama if his property in 10 years is worth €500k (taking into account whatever inflation there has been of course).

The argument just does not make sense

Yawn. This isn't hard to work out.

What Varadkar is proposing isn't exactly how NAMA works, it's his own twist on NAMA, where everyone appears to win, just like the government is saying with NAMA.

Leo gets the €420k, NAMA gets his flat which according to NAMA will be worth €420k in a X number of years, and the bank gets it's money- nobody loses out.
NAMA works like this: NAMA take over the loan, the bank get's it money(the same as now), and the property devs that are effectively bust atm get X number of years more to start paying back the loan.

So in both scenario's the bank wins, the devs/Varadkar (or at least get a 2nd chance to not go broken) yet in both cases NAMA(i.e everyone else) takes the risk. That's the point.

listermint

murfie wrote: »

Sure but do you really believe they are going to chase that money, in fact they are even going to invest more money into developments to finish them instead of seizing and selling them, to basically bail out these builder tycoons.

Please don't fool yourself, NAMA is seriously flawed and I can only hope the greens vote to not support it.

Link Please

Diarmuid

listermint wrote: »

Link Please

http://www.rte.ie/business/2009/0731/nama.html
"NAMA will have the ability to borrow up to €10 billion to finish uncompleted developments which it acquires."

And for future reference http://lmgtfy.com/?q=bank+nama+finish+developments

Joey the lips

The_Minister wrote: »

Is it just me, or does Leo Varadkar, as a member of the Dail, show a scary lack of knowledge as to hoe NAMA works?

I know he's ****-stirring, but still, thats not how its meant to work.

+1


I agree but i think what leo is doing is showing the irony.... That the builders are being helped but we are not.

ascanbe

Diarmuid wrote: »

Makes no difference to the tax payer because those guys will never be able to repay those debts. This idea that just because someone still owes the money, then everything will work out, is crazy

Exactly.
These people haven't got a prayer of repaying these debts; in rare cases they may be able to pay a small percentage of them but they will be making every effort to avoid doing so.
So we have relieved the banks of this black hole of debt and taken it upon ourselves; but hey, we now own a bunch of, soon to be derelict, housing estates and apartment blocks as well as some, practically worthless, land.

SkepticOne

The_Minister wrote: »

Is it just me, or does Leo Varadkar, as a member of the Dail, show a scary lack of knowledge as to hoe NAMA works?

I think this may be an overly literal interpretation of what he is saying.

murfie

listermint wrote: »

Link Please

Chapter 6
POWERS IN RELATION TO DEVELOPMENT OF LAND

Development of land.
148.—(1) Where this Chapter applies, NAMA may enter into an agreement (including an
agreement with the person who was the debtor in relation to the bank asset concerned) for the
purpose of developing the land.

http://www.nama.ie/Publications/2009/DraftNamaBill2009.pdf

Darsad

Varadkar is great at stirring things he would be better placed writing to the Minister for Finance requesting ways be implemented to stop the unvouched expenses claimed by TDs of which he will claim over 100K this year nice cushion to help with his negative equity !!

The_Minister

Diarmuid wrote: »

Makes no difference to the tax payer because those guys will never be able to repay those debts. This idea that just because someone still owes the money, then everything will work out, is crazy

They are taking every loan over 5,000,000 regardless of whether or not they can pay.
Many of those loans will not default.

murfie wrote: »

Sure but do you really believe they are going to chase that money, in fact they are even going to invest more money into developments to finish them instead of seizing and selling them, to basically bail out these builder tycoons.

Of course they are.

Finished properties sell for more then unfinished ones, allowing NAMA to recoup more of the loans.

By paying developers to owe it money to do it, it can take that money to pay back some of its loans, as opposed to paying it to a builder who owes it nothing and will walk off with the money.

it makes sense to pay the builders to finish the properties.

murfie

The_Minister wrote: »

it makes sense to pay the builders to finish the properties.

So we can have more overpriced empty developments on the market to go along with everything else? Makes sense to who? Developers?

The_Minister

murfie wrote: »

So we can have more overpriced empty developments on the market to go along with everything else? Makes sense to who? Developers?

Ok.
1. We have half-finished developments
2. We can get more money if those developments are finished.
3. We have builders who owe us money.

Our options are:
We can pay those builders to finish those projects, and then get them to pay us the money we paid them, to pay off some of their loans. *Smart option*
Or
We leave the buildings unfinished and sell them for less money. *Not-so-smart option*
Or
We get pissy with the builders and to punish them, hire companies who don't owe us money. Those companies finish the building, then walk off with that money, as opposed to paying most of it back to us. *Thick option*

Diarmuid

The_Minister wrote: »

Ok.
1. We have half-finished developments
2. We can get more money if those developments are finished.

Not necessarily true. Plenty of developments around where phase 1 is finished and not sold and phase 2 not finished. If you can't sell phase 1 why would you think you'd sell phase 2?

SkepticOne

I think the question is fairly simple. Is there a business case for putting yet more billions into finishing off buildings?

If there was a business case, it would be no problem attracting private investors to put money into it. It is precisely because private investors don't see a business case (because there isn't one, imo) that the taxpayer is being forced to step in.

The question people who support NAMA need to ask themselves is this: would you put your own hard earned money into these schemes as opposed to other people's?

donkey balls

Two weeks ago I wrote to NAMA to offer my apartment to them for long-term economic value. Like hundreds of thousands of young people, I am now in negative equity and am facing the spectre of debt deflation – a falling income with rising debt repayments. See my letter and the NAMA response below.

and this is the same pr**k that claimed over 73,000 euro in expenses and judging by the coment above he must be one of the four TD,S who took a 10% pay cut.

the guy is a plank what does he know about trade&enterprise he is a doctor the same goes for those in power and the goobeens that want to have there turn to ruin the country.

eoinbn

SkepticOne wrote: »

I think the question is fairly simple. Is there a business case for putting yet more billions into finishing off buildings?

If there was a business case, it would be no problem attracting private investors to put money into it. It is precisely because private investors don't see a business case (because there isn't one, imo) that the taxpayer is being forced to step in.

The question people who support NAMA need to ask themselves is this: would you put your own hard earned money into these schemes as opposed to other people's?

At very best NAMA will break even, and I don't believe that for one second. However just because it will lose money doesn't make it a failure- it's not about making money, it's about getting the banks up and running again. If it does that, and at the cost of ~€10b i think that's a pretty small price tbh(Currently the government spends that every ~2 months).

murfie

donkey balls wrote: »

the guy is a plank what does he know about trade&enterprise he is a doctor the same goes for those in power and the goobeens that want to have there turn to ruin the country.

Have you read the FG alternative to NAMA it appears to be a good alternative.

http://www.finegael.org/upload/FG_Banking_Policy_Sept_21.doc

Set up a good bank, promote lending through the banks to the people that really need it. let the banks and their investors keep the risk they decided to take on, with the bad developer loans.

P. Breathnach

SkepticOne wrote: »

I think the question is fairly simple. Is there a business case for putting yet more billions into finishing off buildings?

I think the answer is that there is in some cases, and not in others.

If there was a business case, it would be no problem attracting private investors to put money into it. It is precisely because private investors don't see a business case (because there isn't one, imo) that the taxpayer is being forced to step in.

I don't think it is as straightforward as that. Private investors need funds, and the banks aren't lending. I expect that there are currently bankable projects that have been stalled because of this, and I am hopeful that in the short to medium term economic recovery will start and projects that are not immediately viable will become better propositions.

But that low-lying field two miles outside town will probably never be worth what some over-optimisitic developer paid for it, and we we will never need that hotel in the middle of nowhere, and the office block being built speculatively to house a decentralised unit of the civil service will probably remain empty. And as for those urban housing estates in rural parts of Cavan...