NAMA valuation date to be backdated to November - mugged again, another €5bn down.

[He3]

Even though not a single property loan has been transferred to NAMA, Brian Lenihan has decided that on transfer their value will be, not their current value, but a value attributed to them as of last November.

Brian Lenihan has backdated the value of all property loans being acquired by the National Asset Management Agency (Nama) to November 2009, a move that economists claim will cost the taxpayer up to €5 billion.

The finance minister has been accused of signing off on a “holiday for the banks” and engaging in “legislative price fixing”, after his department confirmed that Nama will value all loans based on what they were worth on November 30 last year, even though house and land prices have fallen since then.

They are just laughing at us now.

84 votes made this possible. Remember the names.

Nama backdate could cost €5bn - Times Online

[MsAnneThrope]

Rewind back to the 26th of August 2009, just after that letter from the 46 economists appeared in the Irish Times.

Minister for Finance Brian Lenihan has rejected arguments from a group of 46 economists and lecturers about the risks posed by the planned National Asset Management Agency.

He has also insisted that the Government collectively wanted to ensure the maximum protection for taxpayers when NAMA begins its work of buying up toxic loans from the banks.

Meanwhile, Green Party Minister Eamon Ryan insisted that the State will not overpay for toxic assets when the National Asset Management Agency is established. [...]

'When the final proposals are published the first people to pay will be the speculators, developers and bankers that made the wrong calls on the property market,' he said.

'NAMA will not amount to a bailout for speculators, builders and bankers,' he stressed.

RTE News 26th August 2009

[PaddyJoe McGillycuddy]

Its just Alice in Wonderland stuff now. Figures mean whatever I want them to mean.
From one point of view it is irrelevant anyway. We're broke and no amount of spinning is going to fix that. Lenihan is waving and thrashing about in the water but there's no way back to shore.

[tonic]

Let us not lose sight of the fact that for the "economists" and the OP to be correct in that this will cost another 5 billion, whoever said that prices will fall 10% in 2010, would have to be right and we would have to wait until the end of this year to value all the securing assets on the loans NAMA is taking over. One of those things may or may not come to pass and the other is an impossibility, the banking situation cannot be left to wait another year.

[cyberianpan]

We should always remain cautious of when that spoofer Brian Lucey is trotted out

In December 2005, when paid by a mortgages company, he dismissed out of hand the notion of a bubble
TCD professor admits being wrong about housing bubble - The Irish Times - Tue, Jun 30, 2009

I don't see why the press rely on a failed and discredited commentator , though he must love being described as a "a professor of business in TCD" when he is still only Associate Professor

cYp

[PaddyJoe McGillycuddy]

Let us not lose sight of the fact that for the "economists" and the OP to be correct in that this will cost another 5 billion, whoever said that prices will fall 10% in 2010, would have to be right and we would have to wait until the end of this year to value all the securing assets on the loans NAMA is taking over. One of those things may or may not come to pass and the other is an impossibility, the banking situation cannot be left to wait another year.

The banking situation as you call it has been left for 18 months now while Lenihan flounder away in the quicksand. Sinking month by month, releasing the bad news piecemeal and trying not to scare the horses. Skillful political strategy but he is running out of rope. The banks are a black hole and the country is vanishing into it.

[mollox]

Is there not a claw-back mechanism built into the legislation should the price paid for loans prove to be over-optimistic?
That’s irrelevant in the case of Anglo-Irish, now fully state owned, but relevant for AIB & BOI.
The reality is that there’s no real market at the moment because what bank would lend for property acquisition when that lending might be adjudged to be worth at less than its face value by NAMA, thus immediately creating a book loss for the lending bank.

[DCon]

Not sure I can believe he is doing this, but nothing would surprise me any more..

Brian Lenihan has backdated the value of all property loans being acquired by the National Asset Management Agency (Nama) to November 2009, a move that economists claim will cost the taxpayer up to €5 billion.

The finance minister has been accused of signing off on a “holiday for the banks” and engaging in “legislative price fixing”, after his department confirmed that Nama will value all loans based on what they were worth on November 30 last year, even though house and land prices have fallen since then.

Constantin Gurdgiev, a lecturer in finance in Trinity College Dublin (TCD), said the decision to backdate the Nama valuations means the taxpayer will have to pay billions more than the loans are worth. “This has totally stunned me,” he said. “It is estimated that house prices will fall by around 10% in 2010, and land prices will be even worse. If we have to pay 2009 prices for loans worth €50 billion, this decision could cost us up to €5 billion. It’s just another holiday for the banks.”

Brian Lucey, a professor of business in TCD, said it was a “shocking, nonsensical” decision. “The government has never engaged in legislative price fixing before, but that’s what this is,” he said. “There was a provision for [Lenihan] to set a reference date for Nama to make its valuations, but for that date to be set so far back is shocking.”

Nama backdate could cost €5bn - Times Online

[bormotello]

54 Bn is what bondholders agreed to take
NAMA never was about saving banks, it was mostly about saving bondholder,
Too many influential people in Ireland could loose everything if taxpayers will not pay for their gambling and country doesn’t have new elite to replace them

[Dreaded_Estate]

So the backdate could be before many of these loans are reclassified as impaired or on watch. And going be AIB's latest report the pace of reclassification is very significant.