The National Asset Management Agency has proposed a way of providing mortgage finance to home buyers in an attempt to energise the property market.
NAMA chairman Frank Daly said that, following talks with AIB and Bank of Ireland, it had come up with a deferred payment scheme, which would link payment to the value after five years of any NAMA property bought.
Under the scheme, a purchaser would seek a mortgage of €180,000 and pay a deposit of €20,000 on a property linked to a NAMA loan for sale for €200,000.
NAMA then agrees to defer the payment of 20% of the current value of the property, in this case €40,000. Should the property be worth €200,000 or more after five years the buyer's repayments will continue to cover the €40,000.
If after five years the property has fallen in value - to, for example, €160,000 - NAMA waives the outstanding €40,000 from the 2011 purchase price. The purchaser will then have to pay back just €140,000 of the original €180,000 loan.
The scheme will be launched on a pilot basis this autumn, and should apply to 12,000 individual residential units.
Fall in values drags NAMA into 2010 loss
NAMA's first annual report today revealed that it made operating profits of €305m for last year.
But after impairment charges of €1.4 billion due to a fall in the value of its assets, its loss overall was €1.1 billion. The agency noted, though, that these provisions for impairments did not necessarily mean the losses would ever materialise.
During 2010, NAMA paid €30.2 billion for 11,500 loans belonging to 850 debtors. The value of the loans was €71.2 billion, giving an overall discount of 58%.
The majority of the assets acquired - 61% - are in Ireland. 32% are in the UK and Northern Ireland, and 7% in the rest of the world.
NAMA also says that about 59% of the assets it has acquired to date are investment properties, while 41% of the assets are in land or property under development.
Three of the debtors in NAMA owe more than €2 billion each, while 12 debtors owe more than €1 billion.
By the end of last month, NAMA has agreed asset sales worth €3.9 billion.
'We've made enormous progress on a wide range of fronts over the past 15 months and we're ahead of schedule in respect of may areas,' commented NAMA's chief executive Brendan McDonagh.
'Our expectation now is that the pace of activity will step up again in the months ahead as we move through the implementation phase of our work,' he added.
Mr McDonagh also said the agency was getting tough on the lavish lifestyles of some of its 850 debtors. He said NAMA had gotten rid of private jets, was selling helicopters and this week seized €200,000 worth of jewellery one developer had bought for his partner.
'The minister for finance said to me it was good to see that guys were no longer taking helicoptors to play golf. That's progress and important progress,' NAMA chairman Frank Daly said.
Breakdown of assets taken over by NAMA
The National Asset Management Agency has taken control of over 800 assets. The majority - 220 - are in Dublin, followed by 80 in Cork, and 52 in Limerick. The assets are made up mostly of residential units and development properties.
Almost 30 hotels and golf clubs are included in the enforcement action, including Fota Island in Cork, Portmarnock Hotel and Golf Links in Dublin, and The Heritage in Laois.
The majority of hotels taken over are in Dublin (seven), followed by Limerick (three) and two each in Meath and Cork. Weston Airport in Kildare was also among the properties that NAMA has moved on.
The agency has also taken control of 78 assets in Northern Ireland and 193 in Britain. In Britain, the majority of properties are developments (50), followed by pubs (37), retail units (35), and residential units (30).