PAMA - Personal Asset Management Agency

[LDFerguson]

The following is an exerpt from an e-mail I received during the week. Just putting it up here so that it can be discussed.

Hi, We are getting in touch with you to highlight PAMA2011 which we launched last week. Our initiative is a concerted attempt to relieve the burden on some of the thousands of people affected by negative equity and mortgage debt. As you can see our two-pronged approach involves neither debt forgiveness or increased taxation etc.

PAMA will "Put People First"


Having received the backing of many of those we consulted, we decided to launch


WWW.PAMA2011.COM


We will be campaigning to the government to assist many who find themselves caught in negative equity and/or mortgage arrears through a two pronged approach:

PAMA (Personal Asset Management Agency )

This agency will look at the best ways in which to tackle personal negative equity and mortgage arrears.


Pension Fund Release

Offset some pension expectation on retirement in public sector against mortgage debt in 2011.

Release pension funds now in the private sector to relieve those struggling to meet their mortgage commitments in 2011.


Importantly, neither approach involves debt forgiveness and both approaches would be entirely voluntary.

Please hit “LIKE” on http://www.facebook.com/#!/pages/Pama2011/130862933649969 so that your voice can be heard.

 

[Chris]

Offset some pension expectation on retirement in public sector against mortgage debt in 2011.

This would cost money now, as there is no pot of money set aside in an account or fund for individual public employees; public sector pensions are paid for out of current revenue. By bringing forward pension entitlements these funds will have to be found now, meaning increased borrowing and/or taxation.

 

[Brendan Burgess]

The Examiner reported yesterday that it is Fine Gael policy to allow people to access their pension funds to reduce their mortgage debt. I agree that this is worth looking at.

Brendan

 

[Brendan Burgess]

From their website

[FONT=Helvetica, Arial, sans-serif]PAMA - Personal Asset Managment Agency
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[FONT=Helvetica, Arial, sans-serif]PAMA, through Government will borrow funds at a fixed preferential rate to assist individual borrowers in defined categories.
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[FONT=Helvetica, Arial, sans-serif]Borrowers many of whom will be in negative equity and/or mortgage arrears will have their mortgage application(s) re-assessed to confirm their true indebtedness.
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• [FONT=Helvetica, Arial, sans-serif]The property or properties will be valued as at 2011 values
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• [FONT=Helvetica, Arial, sans-serif]Applicants can reduce their borrowings to a maximum of 92% of the new valuation
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• [FONT=Helvetica, Arial, sans-serif]This monthly reduction will allow mortgage holders the freedom to clear other associated debt
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• [FONT=Helvetica, Arial, sans-serif]The deferred portion of the mortgage charged a rate of 2.5% and the mortgage itself at 4.5% both rates fixed (depending on rate of borrowed funds).
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• [FONT=Helvetica, Arial, sans-serif]Every 5 years the property will be valued however, a minimum notional increase of 3% pa factored from year 3 onwards. This increase will be transferred to the deferred portion of the mortgage
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[FONT=Helvetica, Arial, sans-serif]Robust control and management systems must be in place during the life of PAMA[/FONT]

This just makes no sense to me. I don't even know where to start.

The cost of borrowing for the Irish government is around 8%(?) at the moment.

What does "reduce their borrowing" mean? Write down their mortgage?

Someone has to pay - the borrower, the taxpayer or the lenders and the lenders are mostly owned by the taxpayer now.

 

[Chris]

I agree Brendan, first they say that their idea will not cost anything and then they go on to say they will borrow the money needed to pay for it. And those interest rates are more delusional than Bertie's "Lehman Brothers excuse".

 

[Jim2007]

The Examiner reported yesterday that it is Fine Gael policy to allow people to access their pension funds to reduce their mortgage debt. I agree that this is worth looking at.

Brendan

Chances are that the ones who are in need of a financial boost are the ones that have little or nothing in the pension funds in the first place....

Jim.

 

[Brendan Burgess]

Chances are that the ones who are in need of a financial boost are the ones that have little or nothing in the pension funds in the first place....

Jim.

Hi Jim

The point is that this policy will help some people. That is good enough. There is no easy answer. There is no one answer. The problem needs a range of solutions.

If someone is overindebted and they have a pension pot, the pension pot can be used to reduce the overindebtedness. It doesn't even have to be that large. A small fund won't solve the problem for an individual, but it will contribute to that solution.