The Government coughed up Billions for NAMA and didn't even see the files???

Mr. Incognito

http://www.examiner.ie/ireland/nama-team-still-havent-seen-euro77bn-loan-files-103385.html

NAMA team still haven’t seen €77bn loan files
By Mary Regan Political Reporter
THURSDAY, OCTOBER 15, 2009

THE Government has still not seen the records or books of up to €77 billion worth of development loans that it will soon take over from the country’s banks.


Just weeks before the National Assets Management Agency (NAMA) is passed into law, the Department of Finance has admitted that its plans are based on "aggregate data which has been provided by the institutions".

The department has not been able to "verify the integrity of the data" because "the NAMA team has not had direct access to individual transaction records and loan files".

The statement was made in the draft NAMA Business Plan published last night, which said that €15bn of loans taken over by the state will not be paid back by property developers.

The document said at least 20% of the loan sums owed to NAMA will default.

"Of the €77bn nominal value of loans acquired, €62bn will be repaid by borrowers and loan defaults or debt restructuring will occur on €15bn," it stated, adding these were "conservative and prudent assumptions".

Finance Minister Brian Lenihan told the Dáil the figures in the report "are liable to be adjusted further as the detailed analysis and due diligence is carried out".

The plan projected that by the time the NAMA plan is completed by 2020 and loans with interest are repaid, it will have made a profit of €4.8bn.

However, Fine Gael’s finance spokesman Richard Bruton said "the tooth fairy, the Easter Bunny and the Loch Ness Monster are all more credible propositions" than the figures that have been given in the business plan.

He said: "There is no analysis and no depth of information on how the rather extraordinary assumptions were arrived at."

The NAMA Bill last night survived its first vote in the Dáil.

The bill was approved by 77 to 73 on a second stage vote.

The business plan is expected to be passed into law by early November and the top 10 to 15 loans – which are worth a total of €16bn – will be transferred by the end of the year.

This means that "Christmas will come early for the top developers and bankers", according to Labour’s finance spokes-woman Joan Burton.

But Mr Lenihan said: "NAMA is not designed to be and will not be permitted to operate in practice as a bail-out mechanism for developers who have operated irresponsibly".

The Government hopes to have dealt with the top 32 loans – worth €24bn – by January, and the top 100 – worth €38bn – by February.

This story appeared in the printed version of the Irish Examiner Thursday, October 15, 2009


Read more: http://www.examiner.ie/ireland/nama-team-still-havent-seen-euro77bn-loan-files-103385.html#ixzz0U1Sh1JgU

I am gobsmacked. Utterly gobsmacked. So the government wrote a blank check for the banks based on estimates MADE BY THE FECKING BANKS. The same Banks that were giving out money hand over fist that created the false property boom in the first place?

What the hell is going on here. This could be the greatest scandal in the history of the state

hobochris

I'm not sure what to say... I'm in too much disbelief to get angry.

Think I'll stick in that skilled worker visa application to Canada.Maybe come back when the government implodes.

SlickRic

honestly, are we really all that surprised at this stage?

ronano

jesus christ

you're right i'm not shocked but god,why are people trusting the banks? they have their own self interest not ours

AARRRGH

As Joseph Stuiglitz said:

“[In Ireland], this bank bailout is a simple transfer from taxpayers to bondholders, and it will saddle generations to come. The only thing that might give you solace is that, as chief economist of the World Bank, we see this type of thing happening in banana republics all over the world. Whenever a banking crisis happens, the financial sector uses the turmoil as a mechanism to transfer wealth from the general population to themselves. I’ve been very disappointed to see that it has happened, not only in banana republics, but in advanced industrialised countries.”

This bit in the article:

The NAMA Bill last night survived its first vote in the Dáil.

Does this mean the opposition are disagreeomg with NAMA in public, but then voting in support of it in the Dail?!

Mr. Incognito

Does this mean the opposition are disagreeomg with NAMA in public, but then voting in support of it in the Dail?!

No it means that Finna Fail and the Greens voted for and Finna Gael Sinn Fein against but the government has a majority which is why they are leading the country.

Noreen1

Looks like we now live in a Banana Republic......
Nobody is stupid enough to sign off that amount of other peoples money, without having some very detailed analysis done..... so, what the hell is going on???

Noreen

AARRRGH

Noreen1 wrote: »

Looks like we now live in a Banana Republic......
Nobody is stupid enough to sign off that amount of other peoples money, without having some very detailed analysis done..... so, what the hell is going on???

Noreen

I would love to know did our politicians buy loads of banks shares when they were 11 cents or whatever, and are they now doing whatever they can to maximise their investment...

Cork Boy

hobochris wrote: »

Think I'll stick in that skilled worker visa application to Canada.Maybe come back when the government implodes.

Wish I could qualify for one of those :mad:

Boskowski

How about table 5 in the draft (http://www.rte.ie/news/2009/1014/namadraft.pdf)?
Whatever about the enormous cock-up this NAMA thing is going to be anyway. But the brazenness to bang in there 240 millions per year in fees & expenses. A total of 2.64 billion in moneys for the professions. And that's before the legal battles over the loan evaluations and the inevitable tribunal. If NAMA isn't going to bring a revolution about I don't know what is....

dresden8

realcam wrote: »

How about table 5 in the draft (http://www.rte.ie/news/2009/1014/namadraft.pdf)?
Whatever about the enormous cock-up this NAMA thing is going to be anyway. But the brazenness to bang in there 240 millions per year in fees & expenses. A total of 2.64 billion in moneys for the professions. And that's before the legal battles over the loan evaluations and the inevitable tribunal. If NAMA isn't going to bring a revolution about I don't know what is....

Irish people are pussies.

We will bend over for this, the same way we bend over for everything.

Vote NAMA for jobs! Vote NAMA for Economic Recovery!

Liam Byrne

AARRRGH wrote: »

I would love to know did our politicians buy loads of banks shares when they were 11 cents or whatever, and are they now doing whatever they can to maximise their investment...

Someone will probably suggest that that post be moved to "Conspiracy Theories", but you know what ? If it were true I'd accept it, because at least it would mean that there's some reasoning behind all of this hair-brained fiasco.

Mr. Incognito

http://www.examiner.ie/ireland/nama-...es-103385.html

NAMA team still haven’t seen €77bn loan files
By Mary Regan Political Reporter
THURSDAY, OCTOBER 15, 2009

THE Government has still not seen the records or books of up to €77 billion worth of development loans that it will soon take over from the country’s banks.


Just weeks before the National Assets Management Agency (NAMA) is passed into law, the Department of Finance has admitted that its plans are based on "aggregate data which has been provided by the institutions".

The department has not been able to "verify the integrity of the data" because "the NAMA team has not had direct access to individual transaction records and loan files".

The statement was made in the draft NAMA Business Plan published last night, which said that €15bn of loans taken over by the state will not be paid back by property developers.

The document said at least 20% of the loan sums owed to NAMA will default.

"Of the €77bn nominal value of loans acquired, €62bn will be repaid by borrowers and loan defaults or debt restructuring will occur on €15bn," it stated, adding these were "conservative and prudent assumptions".

Finance Minister Brian Lenihan told the Dáil the figures in the report "are liable to be adjusted further as the detailed analysis and due diligence is carried out".

The plan projected that by the time the NAMA plan is completed by 2020 and loans with interest are repaid, it will have made a profit of €4.8bn.

However, Fine Gael’s finance spokesman Richard Bruton said "the tooth fairy, the Easter Bunny and the Loch Ness Monster are all more credible propositions" than the figures that have been given in the business plan.

He said: "There is no analysis and no depth of information on how the rather extraordinary assumptions were arrived at."

The NAMA Bill last night survived its first vote in the Dáil.

The bill was approved by 77 to 73 on a second stage vote.

The business plan is expected to be passed into law by early November and the top 10 to 15 loans – which are worth a total of €16bn – will be transferred by the end of the year.

This means that "Christmas will come early for the top developers and bankers", according to Labour’s finance spokes-woman Joan Burton.

But Mr Lenihan said: "NAMA is not designed to be and will not be permitted to operate in practice as a bail-out mechanism for developers who have operated irresponsibly".

The Government hopes to have dealt with the top 32 loans – worth €24bn – by January, and the top 100 – worth €38bn – by February.

This story appeared in the printed version of the Irish Examiner Thursday, October 15, 2009

Okay boys and girls, lets put this in perspective. I want to buy a horse from a traveller at a fair. Instead of going to said fair and having a look at the horse I decide to give the traveller a ring on the phone. What's the horse like I ask, "Ah, sure she's great boss, worth a grand at least". "Okay, I reply, I'll give you 1,200 for the horse as I'm sure in the long term I'll get a great return out of her, heck I may even run her at the grand national if she's as good as you say"

Can anyone see the problem with this scenario. The government has priced the loan books of the banks and made on offer AND THEY DIDN"T EVEN AUDIT THE FECKING FILES, not even audit them but they still haven't even looked at them. What in the name of good god is going on. We are about to saddle our children with debt they cannot even fathom. We are about to pilfer their communion money, smash open their piggy banks and hand it in ernest to the bankers who drove this property bubble into the skies and then into the gound. The opposition only got their hands on this info last night in the Dail and are demanding rightly an unbiased audit of the loan books. Will it happen- God knows, but if it doesn't you may find that we are crystalising a level of debt that has no hope of return. And what are we getting for this investment? A stern warning from Brian Lenihan that the banks have a national duty to get the money rolling out to small businesses again but no concessions, no guarantees and no incentives. Why would they bother. Heck the banks can shut up shop and demand blood samples for a loan from now on if they want.

I am beyond shocked. I am beyond angry. They is no word in the English language that encapsulates the level of stupidity this government is showing. The closest analogy I can draw is a drunk wandering into a casino and betting his everything he owns or will ever own on the roulette wheel on zero and hoping blindly and frantically that the ball will somehow magically land there.

Ask the bookies for odds on that one.

Villain

"Democracy is a device that ensures we shall be governed no better than we deserve." - George Bernard Shaw

TheZohanS

Mr. Incognito wrote: »

The closest analogy I can draw is a drunk wandering into a casino and betting his everything he owns or will ever own on the roulette wheel on zero and hoping blindly and frantically that the ball will somehow magically land there.

Ask the bookies for odds on that one.

I agree with a lot of what you posted, but your final analogy lets down your entire post.

Scofflaw

Merged threads. Has nobody yet used the phrase "buying a pig in a poke"?

moderately,
Scofflaw

lmimmfn

not surprised in the least, bring on the white elephant.

Noreen1

AARRRGH wrote: »

As Joseph Stuiglitz said:

“[In Ireland], this bank bailout is a simple transfer from taxpayers to bondholders, and it will saddle generations to come. The only thing that might give you solace is that, as chief economist of the World Bank, we see this type of thing happening in banana republics all over the world. !

It might surprise him to hear that it brings me no solace whatsoever.

Definition of a Banana Republic from the online dictionary:
banana republic
n.A small country that is economically dependent on a single export commodity, such as bananas, and is typically governed by a dictator or the armed forces.


:eek::eek:

Noreen

D.S.

While I understand the level of distrust and discontent with the NAMA plan, this whole thread comes across as a bit sensationalist and ridiculous...a couple of things to point out...

1) NAMA doesn't exist as an agency with full powers just yet. Therefore, the NAMA team will not be able to verify the integrity of the data until it officially has the power to do so.

2) The loans are to be reviewed fully by NAMA and transferred over on a case by case basis thereby minimising risk. Therefore, these loans and all data behind them will be reviewed thoroughly before transfer.

3) The data provided was used to build the business case and plans. Yes granted you could say that it is in the bank's interest to provide false information. But if the loans are to be transferred on a case by case basis following a NAMA review, then providing false information at this point wouldn't the best strategy for a bank, and in fact would probably bring down the senior management team within the bank.

4)The banks have to provide the data. How else do you think you are going to collect the myriad of data with regards to LTV, securities, arrears and deposit information?? Coupled with this (and people won't like to hear this) that retail banking information is not generally housed in one pretty system but across a range of systems that vary in their modernity/flexibility, the most expedient way to get the information was to get the banks to hand it over and build a business case from it. A independent team would not have the time to provide an in depth audit in a reasonable timeframe, given the pressure coming from the Department of Finance to act swiftly on the NAMA plan.

I am just not seeing what the problem is here?

Again, while I don't agree with it, I can understand the level of anger/disagreement with the NAMA plan. But this thread on the process of using bank provided data to generate a business plan just seems a bit OTT.

meathstevie

D.S. wrote: »

While I understand the level of distrust and discontent with the NAMA plan, this whole thread comes across as a bit sensationalist and ridiculous...a couple of things to point out...

1) NAMA doesn't exist as an agency with full powers just yet. Therefore, the NAMA team will not be able to verify the integrity of the data until it officially has the power to do so.

2) The loans are to be reviewed fully by NAMA and transferred over on a case by case basis thereby minimising risk. Therefore, these loans and all data behind them will be reviewed thoroughly before transfer.

3) The data provided was used to build the business case and plans. Yes granted you could say that it is in the bank's interest to provide false information. But if the loans are to be transferred on a case by case basis following a NAMA review, then providing false information at this point wouldn't the best strategy for a bank, and in fact would probably bring down the senior management team within the bank.

4)The banks have to provide the data. How else do you think you are going to collect the myriad of data with regards to LTV, securities, arrears and deposit information?? Coupled with this (and people won't like to hear this) that retail banking information is not generally housed in one pretty system but across a range of systems that vary in their modernity/flexibility, the most expedient way to get the information was to get the banks to hand it over and build a business case from it. A independent team would not have the time to provide an in depth audit in a reasonable timeframe, given the pressure coming from the Department of Finance to act swiftly on the NAMA plan.

I am just not seeing what the problem is here?

Again, while I don't agree with it, I can understand the level of anger/disagreement with the NAMA plan. But this thread on the process of using bank provided data to generate a business plan just seems a bit OTT.

Sorry but your second point is just too funny to be true. Do you honestly believe some people in NAMA are going to go through a bank's loanbook one item at a time ? That would be like picking the flees of the back of a hundred chimps one by one with a tweezers. I can't shake the idea that our prudent politicians have bought the Tower of London, Lady Liberty and the Golden Gate Bridge all in the one deal.

D.S.

meathstevie wrote: »

Sorry but your second point is just too funny to be true. Do you honestly believe some people in NAMA are going to go through a bank's loanbook one item at a time ? That would be like picking the flees of the back of a hundred chimps one by one with a tweezers. I can't shake the idea that our prudent politicians have bought the Tower of London, Lady Liberty and the Golden Gate Bridge all in the one deal.

Yes I do..for the largest 100-150 borrowers from each bank. These will be massive exposures..you are not going to take 500m belonging to one developer and not perform a detailed due diligence process on that transfer.

Too funny to be true?? A few excerpts from the NAMA Bill and NAMA Plan:

Due diligence fees – estimated to be about 0.2% of the book value of the portfolio in 2010 - include fees payable to firms carrying out loan and derivatives
valuation, property valuation, audit assurance and legal due diligence for the loans being acquired by NAMA. It is proposed to recoup the cost of the due
diligence process from the participating institutions.

Based on lists of eligible assets identified by participating institutions, begin the process of asset valuation
by appointing legal firms and loan valuers to each of the institutions. Focus initially will be on loans to the
largest 25 borrowers across the participating institutions.
• Set up detailed operational arrangements for the asset valuation process to ensure an efficient interaction
between the institutions and the various service providers appointed by NAMA.
• Facilitate process by providing guidance to service providers on issues which emerge in the course of
valuations.
• Monitor the process, in conjunction with the Audit Co-ordinator, to ensure rigour and consistency in
valuations.
• Ensure that daily progress reports are available to update NAMA management and Board on the progress
of valuations and the extent to which valuations are in line with initial expectations.
• Review and approve one or more acquisition schedules prepared by Audit Co-ordinator with the objective
to transferring the largest 10-15 borrower exposures by end-year.
• Make arrangements, in conjunction with NTMA’s Debt Management unit, for the issue to institutions of
government securities and/or guaranteed securities, including NAMA subordinated debt, as consideration
for acquired loans.

NAMA will meet the major borrowers as their loans transfer to NAMA.
• NAMA will request and evaluate Business Plans put forward by borrowers and recommend to the NAMA
Board the appropriate course of action to take. The following will be required for each borrower:
o A clear and comprehensive account of the borrower’s total exposure to all institutions
o Detailed analysis of the borrower’s total portfolio and its breakdown into groups, segments,
exposures, geography, costs, etc.
o Development of a credible plan for management of the portfolio, with prioritisation of
developments that are expected to yield cash flows.
• Obtain Board agreement to the plan.
• Implementation of the agreed plan with time lines, targets, etc.
• Review the plan at regular intervals for implementation including a fundamental review of primary strategy
in the light of experience.

for the next 100-150 borrowers - a slightly different approach but still largest exposures being targeted directly:

For borrowers outside of the largest 150 borrowers, NAMA will make an
early determination as regards each borrower’s creditworthiness, taking
into consideration information from each of the participating institutions
on the performance history and level of impairment of acquired loans.
• Borrowers will be classified by reference to (i) the level of their exposure,
(ii) their creditworthiness and (iii) their level of impairment.
• The larger and more impaired exposures will be assessed as a matter of
urgency by NAMA and appropriate action will be taken subject to the
approval of the NAMA Credit Committee and the NAMA Board.

It looks like a very detailed audit for each of main 100-150 borrowers transferring to NAMA, and a large/impaired exposure assessment on the next 150.

It would be incredible foolish to take on any kind of debt and not have a proper understanding of future cash flows, current security and collateral agreements etc etc, and the plan seems to this into account.

meathstevie

Well, not only will all these loans have to be thoroughly scrutinised after NAMA has agreed in principal to take them on but there's also the aspect of unravelling the company structures of the borrowers to make sense of the true caracter of the loans.

It's exactly the sort of bad deals NAMA is supposed to be taking on to fulfill it's purpose that will not pass any assesment by any competent person(s) so what's the purpose of the whole exercise if it isn't a poorly disguised attempt at a debt transfer from failed private business to the public purse ?

To be honest with you I don't give a fiddlers about the exact ins and outs. The bottom line is that the ordinary punter is going to bleed long and hard to save the bacon of a few in banking and property development who can't or won't take responsibility for their own mistakes.

D.S.

meathstevie wrote: »

Well, not only will all these loans have to be thoroughly scrutinised after NAMA has agreed to take them on but there's also the aspect of unravelling the company structures of the borrowers to make sense of the true caracter of the loans.

To be honest with you I don't give a fiddlers about the exact ins and outs. The bottom line is that the ordinary punter is going to bleed long and hard to save the bacon of a few in banking and property development who can't or won't take responsibility for their own mistakes.

It's funny how you can make an assessment that the ordinary punter will have to bleed long and hard but not give a fiddlers about understanding the exact ins and outs of the plan..

In either case, it's off topic. My point is simply that the original post and subsequent reaction is OTT and the process of how NAMA is being operationalised does not appear to be mis-managed/inappropriate so far.

The bigger social/economic implications of NAMA has been discussed to death on other threads.

meathstevie

You don't have to be a financial genius nor be aware of the exact ins and outs of any deal to know that when you pick up someone's massive liabilities in the hope of a future return based on very uncertain future circumstances that you leave yourself open to a huge risk. And that's absolutely fine by me if a private entity does that with it's own funding; it's called risk taking in the hope of a return.

Where things go wrong though is when the taxpayer is being forced into taking a massive gamble on what are fundamentally failed business projects.

old boy

look at the success of the financial regulator for the last number of years,
now that gives one an idea of how sucessful the goverment are at managing the banks
look at the last three ministers of finannce and see how good the goverment are at manageing money
look at our last leader and his advice to people who dared mention the word recession
does that make people optimistic, yeah ted.

AARRRGH

D.S. wrote: »

I am just not seeing what the problem is here?

Our government are totally corrupt/incompetent. They are not going to handle NAMA in a cost effective, intelligent manner.

Liam Byrne

D.S. wrote: »

It would be incredible foolish to take on any kind of debt and not have a proper understanding of future cash flows, current security and collateral agreements etc etc

Yes, it would. And considering that FF have already done this with Anglo Irish, I'm not surprised to see them doing it again.

lmimmfn

Anything state run is a disaster, simple as that. The only state owned company that actually makes money is the ESB.

Dickerty

Actually, the NTMA has been well run for many years, and I am sure their successes are part of the reason that NAMA is being parked alongside it.

D.S.

Dickerty wrote: »

Actually, the NTMA has been well run for many years, and I am sure their successes are part of the reason that NAMA is being parked alongside it.

Exactly - NTMA is one of our most successful Government agencies.

Also every other post assumes the Government has f**ked up this project because they have done so in the past and assume this is an indicator of future performance. Interestingly, nobody has been able to pick any real holes in terms of the process to date.

I am not saying the Government won't mess this up completely. I am simply saying this is another OTT thread jumping to conclusions when nothing concrete with regards to asset transfer / credit recovery has happened yet.