# PI for ordinary Joe, NAMA for the well-connected..



## Artemis (23 Jan 2013)

My understanding is that there will be a publicly available list of anyone availing of PI, but the 850 NAMA clients are a closely protected secret.
These seems like double standards. 

How does this conflicting approach serve the public interest?

Are there other examples of double-standards?


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## leroy67 (23 Jan 2013)

look on Kildare Street. there's a big building on the right hand side if you're coming from Stephens Green full of them !


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## Brendan Burgess (23 Jan 2013)

There is no double standard here at all. 

If someone avails of bankruptcy they go onto a public register, whether they have a credit union loan or a loan acquired by NAMA. 

AIB does not post its clients names in public. The Credit Unions don't post their clients names in public. Nama does not post its clients names in public. 

In many cases, NAMA has to take legal action against its clients and their affairs usually become a matter of public record.  Likewise when a Credit Union takes action against its clients, the case becomes a matter of public record.

Brendan


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## Artemis (24 Jan 2013)

I disagree.

If ordinary Joe avails of any the new mechanisms, not just bankruptcy, their name and details will be automatically published on a register that will be accessible to the public.

The majority, if not all of NAMA clients are availing of debt writedown mechanisms, which are not public.

It is also common for a NAMA client, who has cost the state millions to be given a salary and a free private residence to the value of 500K.

"In many cases, NAMA has to take legal action..." NAMA have only taken legal action to a fraction of 1% of its 850 clients.

To suggest the ordinary Joe is getting equal treatment to the well healed, well connected does not stand up, at any level.


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## Bronte (24 Jan 2013)

In a democracy I see no reason why developers who are having debt written down at public expense should not have their names published. It most definitely is a two tier system and is disgraceful. Nama should be transparent. Instead it is all smoke and mirrors.  Not only are there names being protected, we do not know the deals being done and we do not know how much it is costing us per developer.  Nor do we know which developer is receiving what salary at our expense, nor do we know how many of them have long since transferred assets to their spouses/families etc.  Or even done current transfers backdated and backed up by the latest craze of 'trusts' etc.


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## Brendan Burgess (24 Jan 2013)

> If ordinary Joe avails of any the new mechanisms, not just bankruptcy,  their name and details will be automatically published on a register  that will be accessible to the public.


And if rich Bill, NAMA client, takes advantage,their names will be published as well.





> NAMA have only taken legal action to a fraction of 1% of its 850 clients.


1% of 850 is 9.  NAMA is regularly in the papers for taking legal action. So they have taken far more than 9 cases. So a "fraction of 1%" is not correct. 

If Ulster Bank does a deal with one of its customers and writes off part of that debt, they will not publish the name in the paper. It is the same for NAMA. They bought the debts from AIB, BoI etc. They should treat their customers in the same way. 


> It is also common for a NAMA client, who has cost the state millions to be given a salary


  The debtor would be much cheaper and is much more likely to do a better job than an expensive Receiver. Of course they should be paid.  Where NAMA is not getting cooperation, e.g. in the case of Treasury, they appoint a receiver. 



> In a democracy I see no reason why developers who are having debt  written down at public expense should not have their names published.


These developers borrowed money in a confidential manner from AIB, BoI, Anglo etc. They did not ask for NAMA to take over their debts. In some cases they took High Court action to make sure that NAMA did not take over their debts. I have spoken to developers who have told me that they are so pleased that they banked with Ulster Bank and that they don't have to deal with NAMA.  


> Nama should be transparent


Why? NAMA is a business which is trying to maximise the return or minimise the cost to the taxpayer. It is operating in a very commercial and competitive world. If it shows its hand, you are giving the power to the other side. 



> nor do we know how many of them have long since transferred assets to  their spouses/families etc.  Or even done current transfers backdated  and backed up by the latest craze of 'trusts' etc.


If they did it "long since" , there is very little that any lender can do about it. NAMA is aggressively pursuing people who have attempted to put assets beyond its reach. NAMA is trying to be practical. In some cases, it has no right to get money back, but I understand that it refuses to do deals with people unless they bring the money back. 

The top guys in NAMA are very good. They are very tough.  It's a huge business and I am sure that they have made mistakes.  But overall, we have to trust them to do the best for us.  We can't make their decisions subject to political purposes or public "it's a disgrace, Joe" type calls. Did you see the letter from the Chairman to Margaret Heffernan? They were very clear. "If you don't pay what you owe us, we will get a liquidator appointed to Dunnes Stores" She was livid, but she paid up.


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## Artemis (24 Jan 2013)

> if rich Bill, NAMA client, takes advantage,their names will be published as well


All clients of PI are published, not just those who refuse to co-operate or attempt to take advantage of the legislation.[FONT=&quot]
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> 1% of 850 is 9.  NAMA is regularly in the papers for taking legal  action. So they have taken far more than 9 cases. So a "fraction of 1%"  is not correct.


Agreed, I left out a 0. NAMA has taken legal action against a fraction of 10%, not 1%. Hardly, a home run!! 



> The debtor would be much cheaper and is much more likely to do a better  job than an expensive Receiver. Of course they should be paid.  Where  NAMA is not getting cooperation, e.g. in the case of Treasury, they  appoint a receiver.



NAMA debtors are paid up to 200K, a  multiple of six of the average industrial wage to manage their own  properties. The small BTL investor is not only managing the properties,  but is likely acting as handyman,cleaner and Gardner for a property they  know they will lose and be likely be chased for the shortfall. 



> The  top guys in NAMA are very good


I am sure they are professional  and doing a tough job in difficult circumstances, but theyare ex estate  agents, bankers, property gurus, who pumped the bubble for all it was  worth.  And if they are so good, why is there a budget of billions,yes  not millions  for external services and expertise over the life of NAMA,  on top of the 200+ increasing staff.

Let us also not forget that  when many NAMA clients sell their trophy home to pay debts, they are  allowed to keep 500K to buy an alternative home, mortgage free. Again a multiple of the average house price.



> Where NAMA is not getting cooperation, e.g. in the case of Treasury, they appoint a receiver.



Cooperation  from Ordinary Joe with the banks is irrelevant. We have clearly heard  from public interest directors that there will be no debt write down or  debt forgiveness, and the banks have been given a VETO over the PI  arrangement. Absolute Madness.
NAMA accepts that the best case is to recover what it paid for the loans, not the actual amount borrowed from the Bank.

Many  ordinary Joes' regret borrowing, but based on the double standards,  maybe they will also regret they didn't borrow much more.


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## MrEarl (25 Jan 2013)

Hello,

I have mixed views on some of the issues being discussed here, such as:

A)  I conclude that the best people to try and manage / improve or sell the properties held by NAMA on our nations behalf, are former Bankers, Surveyers, Lawyers etc.  All are professional, experienced and no doubt working hard.  As it happens, I know a couple of the NAMA staff and can say with confidence that they are working very hard to earn their salaries.  Who else might possibly carry out this work, if not professionals in the necessary disciplines (and please, no silly suggestions .... ) ?

B)  An allowance of €500k to acquire a new home, is simply too much.  There is no justification what so ever, for releasing such a large sum. In my view, NAMA has sufficient stock to offer co-operating individuals, a small 3-bed semi detached house in a reasonable location and that should be the maximum offered.  Take it or leave it ... the current arrangements are over generous and need to be reduced, if the report of €500k is true.

C)  In many cases, I also agree that a co-operating former Borrower (albeit, it is often the keyman from a company which borrowed etc) is often a cheaper and perhaps better option to help complete a development, manage or sell their former property.  Benifits come in different ways here - ranging from cheaper labour (than the cost of a receiver and their profesisonal team), to specific knowledge and expertees in respect of the properties in question and perhaps even, some business connections who may add value in one form or another.  Not everyone who borrowed money for developments or investments, was a bad person - so no need to threat them all like criminals.  However, equally, it would appear to me that they are being paid too much for their work, in terms of hard payment and I'd rather see them paid part in salary and part by way of some other benifit, like perhaps a credit note to be applied against their liabilities to NAMA etc.

When all is said and done, NAMA is a massive property company in its own right.  It needs professionals, funding etc to operate and hopefully succeed in helping limit the damage already done to Ireland, financially.  We won't truely know the absolute cost and related contributions NAMA will have generated, for many many years to come.  While I think I recall hearing that NAMAs current mandate runs to something like 2017 - the fact of the matter is, it would be better placed, if this were extended to something like 2037 (to permit genuine time for some form of return in value of suitable properties etc), subject to a certain level of revenue being generated per year, to be applied in reduction of the national debt.  Milestones must be set for annual cash generation by NAMA and serious penalties applied, for failure to deliver on same - otherwise it will turn into another branch of the civil service .... 

Thank you for considering my comments.

Regards

Mr. Earl.


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## Artemis (25 Jan 2013)

> There is no double standard here at all.



I think I see pigs with wings...


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## Bronte (25 Jan 2013)

Artemis said:


> Many ordinary Joes' regret borrowing, but based on the double standards, maybe they will also regret they didn't borrow much more.


 
I really like your full post Artemis on this topic.  

I know of one 'small' estate where the BTL/builders are now managing the properties, handyman, gardener, landlord etc and all I can see for them is ultimatley losing the properties and probably everything else, but meantime spending 24/7 to keep it going.


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## Artemis (25 Jan 2013)

Just a quick comment to try and halt this post going off point.
How NAMA operates and conducts its business is not the issue, it is more to discuss how the small debtor under PI is treated in contrast to the a large NAMA type debtor.

NAMA seems to acknowledge that banks and borrowers were reckless and much of the money borrowed is never coming back.  They are making the most of a bad situation and working towards some form of closure. There are no winners in the mess but lets recover as much as we can and let everybody get on with their lives and give the economy some chance of survival.

It is a pity NAMA weren't running  the PI, the can-kicking might be brought to an end.


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## Importer (25 Jan 2013)

I think this topic is a mixing of apples and pears.

An individual availing of the PI process is insolvent and looking for an arrangement with their creditors and yes their names are recorded in a register

A big developer company with loans in NAMA is just a company with loans and nothing more. It just so happens that the loans were transferred from another bank to NAMA. It doesnt mean that all the companies with loans in NAMA are basket cases. Some will survive the NAMA process and emerge from the process as successful companies. Some will go into liquidation and will be reported as liquidated companies when that happens.

If you want a better comparison, 
Compare individuals in the PI process with liquidated companies, with NAMA loans. both are listed somewhere for everyone to see. Both are DECLARED insolvent

Yes its true that only 17% of NAMA loans are performing however there are lots of individual loans in our main banks which are not performing either. Neither of these categories are reported anywhere (YET)
As all of these loans work their way through the system , some will "come good" and some will go to the "bad list"


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