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Written Answers - National Asset Management Agency

Tuesday, 15 May 2012

Dáil Éireann Debate
Vol. 765 No. 3

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 193.  Deputy Michael Healy-Rae Information on Michael Healy-Rae Zoom on Michael Healy-Rae  asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan  his plans to take persons, who paid an inflated price for property three, four and five years ago and who now see the same properties being sold for a fraction of that cost, out of the situation in which they find themselves in view of the new proposal by the National Asset Management Agency regarding a deferred payments on new properties being sold; and if he will make a statement on the matter. [24126/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan NAMA launched its 80:20 Deferred Payment Initiative on 8 May 2012. This initiative is being made available initially on a pilot basis in respect of 115 houses located in residential developments in counties Dublin, Meath and Cork. Further details on the Initiative including eligible properties are available on NAMA’s website, www.nama.ie. I am informed by NAMA that the pilot scheme will be subject to an evaluation as to its outcome and that it may in future extend the Initiative to additional residential units and, if so, it is envisaged that these would be located across the range of regions in which its debtors control units which may be suitable.

Regarding the issue of mortgage difficulty, last summer the Government’s Economic Management Council established an inter-departmental group to consider further actions that could be deployed to address the increasing problem of mortgage over-indebtedness. This group, which was chaired by Mr. Declan Keane, produced its report at the end of September and it was subsequently published by Government last October. The report concluded that blanket debt forgiveness schemes would not be an effective use of scare resources and that interventions should best be utilized to assist people address temporary repayment difficulties or, if necessary in more difficult cases, for banks and the State authorities to develop and provide more sustainable options on a case by case basis. The Government has accepted the “Keane Report” recommendations as the most appropriate general way to address the problem of significant mortgage arrears. A high level steering group of senior officials, chaired by the Secretary General of my Department, is now overseeing the implementation of these measures.

On the wider issue of mortgage affordability, and in line with the commitment in the Programme for Government, I announced in Budget 2012 that I was increasing mortgage interest relief to 30 per cent for first-time buyers who took out their first mortgage in the period 2004 to 2008. This was the period during which house prices were at their peak.

I have sought to be as flexible as possible within the constraints pertaining. Under the current tax legislation Mortgage Interest Relief is granted from the date the first mortgage interest payment is made. The legislation has been amended for this particular measure to also include [366]mortgage draw-down as a qualifying event for the rate increase. This means that a mortgage holder will qualify for the increased rate if they made their first mortgage interest payment in the period 2004 to 2008 or if they drew down their mortgage in that period.

 194.  Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath  asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan  the percentage and nominal value of loans in the National Asset Management Agency that are income generating at present; the percentage of the income being generated that comes from rental income paid on commercial property leased by Government Departments, State agencies and other public bodies. [24224/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I have been informed by NAMA that it estimates it received income in respect of 33% of its loan portfolio, representing a nominal value of €23.55 billion of the total nominal value of the portfolio of €71.19 billion. It is estimated that for 21% of the loan portfolio (a nominal value of €15.05 billion), loans are fully performing in accordance with their contractual obligations; for an additional 12% of the loan portfolio (a nominal value of €8.5 billion), loans generate some income but not sufficient to meet fully their contractual obligations as per loan agreements.

NAMA advise me that it has been working to capture as much of the underlying rental income generated by assets as possible.

In relation to the percentage of income that originates as rental income from commercial property leased by Government Departments, State agencies and other public bodies, NAMA advises that it cannot readily identify the type of client paying rental income to debtors. However, the amount of rental income being paid to NAMA debtors by State agencies is not thought to be substantial.


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