Sinn Fein TD and Finance spokesperson Pearse Doherty TD has expressed serious concern that NAMA is forgiving developers' loans.

Deputy Doherty said he'd received confirmation of this policy last week in a parliamentary response, and today again when NAMA was in front of the Finance Committee.

Doherty said it would cause outrage among struggling mortgage holders who receive no leeway on their debts.

Deputy Doherty said: "In the Finance Committee I asked NAMA to confirm whether the sell-off of €1.9 billion in loans to a third party is debt forgiveness. They confirmed the practice of selling off loans at what NAMA paid for them and admitted they had no jurisdiction over the loans once they’d been passed on.

"The debt forgiveness works like this: NAMA bought a developer’s €100 million loan to Anglo for €40 million (and the taxpayer recapitalised Anglo then with the outstanding €60 million). NAMA is mandated to pursue the full €100 million, not just the €40 million. But NAMA has sold the loan off to a third party for €40 million. The state has just lost €60 million. This is debt forgiveness through the back door.

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"When NAMA was established, there was huge concern in this state that the body could be used to provide a write off of debts from developers, as NAMA would not be paying the full value to banks for the loans it was acquiring.

"NAMA and the government of the day assured us that NAMA would not just be pursuing the value of what it paid banks for loans, but would go after developers for the full value of debts. This is what NAMA is set up to do – not just to breakeven but to potentially make a profit.

"Through a series of Parliamentary Questions, I have established that NAMA has sold off €1.9 billion in loans to date to a third party. Whether or not this third party chases the developers for the rest of those loans is immaterial. The state will not benefit from anything that is made on these loans by the third party. The third party might not pursue the developer for any more than what they bought the loan for. Therefore, the losses that have been incurred on these loans have been crystalized by NAMA, and the developers who own the loans have essentially had part of the loans written off.

"Mortgage owners in this state are struggling under the burden of their debts and are receiving no write offs and little help in the management of their loans. I believe this policy of NAMA’s will cause outrage among struggling mortgage owners."

(CD)