Today on News-talk I heard talk that Nama is discussing the idea of transferring physical assets into financial assets through the process of providing houses to the public.
The purchaser would put up the normal deposit amount and then sign up to repaying Nama an amount per year (at a cost of course), similar to a mortgage repayment. Thus they would of load their property portfolio, public can by houses and no more money would have to be borrowed by the banks to fund mortgage borrowings.
I think these are the principles of the idea. It sounds a good method to 'solve' an accounting headache whilst helping potential buyers.
What this would do to the mortgage providers and the mortgage brokers?
I'd say is not good for their business however it maybe good for the market to find a bottom at some time in the near future rather than in the never never, Banks might well be glad to provide these negative equity mortgages as a way of still trading a profit down the line.
Any thoughts on this idea and what it might do for the country? Would it help in anyway to stabilise the economy and drag rates back to where they would be affordable in the medium term?