# How can a person/business end up in NAMA while meeting all repayment obligations?



## Cantalia (7 Dec 2013)

Can someone explain to me in simple terms how a person/business can end up in Nama if they are meeting all their capital and interest repayments on loans? Is it correct that businesses have ended up in Nama simply because the banked with the IBRC which was liqiudised? Thank you


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## MrEarl (7 Dec 2013)

Hello,

Just because a business (or any other type of borrower) ends up in NAMA does not make them a problem borrower.  They can be performing perfectly to their contacted terms, but may soon be moved to NAMA because they were a former customer of either Anglo or Irish Nationwide (subsequently merged and renamed the IBRC, which is now in liquidation).

My personal view is don't worry about it in terms of business reputation or immediate impact on how your current bank loans are structured as there is zero impact as long as you are paying your loan to terms etc.  

However when opportunity permits, I would strongly urge you to seek a refinancing opportunity & move to one of the Banks remaining open for business (preferably a business bank) as you will need various other facilities in the future - be it overdrafts, FX, asset finance, additional loans etc. 

If you are not familiar with how to go about this, speak to your accountant or a decent financial advisor, there are plenty of people with experience in helping good borrowers move to new banking partners (and also a few banks actually interested in gaining quality new clients).


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## Brendan Burgess (7 Dec 2013)

Agree 100% with Mr Earl. If you are paying your loans on time and if you don't want new money, then it doesn't make any difference to you if you go to NAMA.  

However, if you need to restructure your loans or if you need to borrow more money secured on the same assets, it will be a disadvantage. 

Around 16,000 residential borrowers will probably be going to NAMA soon.


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## Cantalia (8 Dec 2013)

Thank you, is it the case that everyone in the IRBC will now have to go into Nama by virtue of the liquidation? Even if they may not have been in Nama otherwise??


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## MrEarl (8 Dec 2013)

Cantalia said:


> Thank you, is it the case that everyone in the IRBC will now have to go into Nama by virtue of the liquidation? Even if they may not have been in Nama otherwise??



That depends on whether or not their loan is "sold" into NAMA as part of the current sale process, which is being undertaken by KPMG (Kieran Wallace as liquidator to the IBRC).

In reality, I think the majority of Borrowers currently banked through the IBRC (in liquidation) with balances below say €20m will end up being "sold" over to NAMA. It would appear there are significant restrictions on what price the liquidator can sell the loans at (i.e. it appears he is restricted to selling them at only a very small discount) and hence, I cannot see many selling to third parties, who would seek to make profit on the purchase etc.


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## dewdrop (8 Dec 2013)

I was under the impression that Loans relating to land development projects whether performing (repayments uptodate) or otherwise over a certain threshold with all Irish banks went to Nama. Perhaps i am mistaken.


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