Constitutional challenges to NAMA on bank loans

[patslatt]

NAMA could face constitutional challenges from property developers on banks' toxic property loans and property collateral values. On RTE Radio this morning,I heard the head of NAMA is complaining he doesn't have the staff to cope with the task and that law firms are salivating at the litigation prospects. Could this be another example,like the Tribunals,of lawyers making hundreds of millions by making legal mountains out of molehills?

Property valuations in connection with loans transferred from the banks to NAMA could be very difficult,given the moving target nature of the market. Valuers have been refusing to supply monthly valuations on unit linked property trusts,even though such valuations are needed to permit unit holders to sell.An auction process that forces both sides to compromise on price could be the solution,as I discussed at http://www.politics.ie/economy/63457...ught-nama.html

[orbit]

On what basis could borrowers challenge NAMA? The banks maybe, but I don't see borrowers having much to shout about.

[corelli]

For a start, I cannot imagine any lawyer "salivating" over anything of the sort. Ambulance chasing is impermissible and can lead to striking off. Secondly, the tribunal fees were set by a FF/PD government, not the lawyers. Blame the Government. Thirdly, lawyers cannot work in a vacuum, they need clients, in this case, property developers. Blame property developers if they go to the High Court.

[corelli]

On what basis could borrowers challenge NAMA? The banks maybe, but I don't see borrowers having much to shout about.

The reasoning is that that if NAMA buy the loan at a reduced price the value of the land is depressed. There is no problem with a bank assigning anyone else a loan, that would be covered in every standard loan agreement. The difficulty is with coming to a valuation. I personally can't see any challenge succeeding but you never know.

[Sailor]

For a start, I cannot imagine any lawyer "salivating" over anything of the sort. Ambulance chasing is impermissible and can lead to striking off. Secondly, the tribunal fees were set by a FF/PD government, not the lawyers. Blame the Government. Thirdly, lawyers cannot work in a vacuum, they need clients, in this case, property developers. Blame property developers if they go to the High Court.

Not salivating? - they´ll be like rabid dogs. As for being struck off for ambulance chasing - how many to date?

[Dreaded_Estate]

I don't see what the developers can challenge legally.

The banks are perfectly entitlted to, and regularly do, sell their loans onto others directly or through securitisation.
NAMA buying the loans is no different IMO.

[patslatt]

I don't see what the developers can challenge legally.

The banks are perfectly entitlted to, and regularly do, sell their loans onto others directly or through securitisation.
NAMA buying the loans is no different IMO.

Some banks could delay agreeing the valuations of loans to developers to enhance their bargaining power,knowing that the government is under pressure to free up bank lending to businesses and to liquidate the bad loans ASAP. Also,bank managements have to be very careful about valuations of developer loans to be sold to NAMA, for fear of being sued by shareholders. This could mean a very prolonged valuation process and haggling.

[patslatt]

Not salivating? - they´ll be like rabid dogs. As for being struck off for ambulance chasing - how many to date?

There could be hundreds of millions of legal fees in litigation on loans and property valuations. It's the tribunals' monstrous fees all over again.

[patslatt]

On what basis could borrowers challenge NAMA? The banks maybe, but I don't see borrowers having much to shout about.

The borrowers with little to lose could strengthen their bargaining position by delaying the workouts of the developer loans which are necessary to refocus bank lending to businesses other than property.

Borrowers whose loans are in default could have their properties seized,which would solve the valuation problem. However,where loans in default are part of financing a syndicate whose other shareholders are financially sound,the seizure of property could prevent an efficient workout of the syndicate's project.

[cactusflower]

The longer this is dragged out the more it will be found that developers either have nothing with which to pay their debts, or that they have moved anything they had out of reach.
There was a judgement on Kelly and his children for I think 8 million yesterday. People who had family members as Directors in their firms are going to live to regret it sorely.