Battling developer Jerry Beades, who is being pursued by banks and is representing himself in court, secured two legal victories in separate hearings in the courts last week.
On Monday, the Dublin High Court dismissed bankruptcy proceedings against him taken by ACC Bank after a judge accepted Mr Beade's application that paperwork, accompanying the ACC claim was faulty.
Then two days later, Mr Beades, a former member of Fianna Fail's ard chomhairle and a former close associate of Bertie Ahern, successfully fought an application by Bank of Scotland which is pursuing him in the High Court for the repayment of a €9.7m personal loan allegedly given to him to develop an apartment complex on Richmond Avenue in Dublin's northside. Bank of Scotland sought judgement against Mr Beades in the High Court.
The bank's senior counsel, Rossa Fanning, argued that as the developer had failed to file papers responding to its claim by the previous Friday, he was offering no defence to it. On that basis, the bank was entitled to summary judgement for the €9.7m due yesterday.
But Mr Beades, in a colourful application, told Mr Justice Michael Peart that he intended defending the claim.
Mr Beades told the court about the High Court decision to dismiss bankruptcy proceedings brought against him by ACC Bank two days before.
He added that had those proceedings succeeded, he would not have defended Bank of Scotland's claim, as there would have been no point. Mr Beades also questioned the validity of the bank's affidavit outlining its claim against him.
He told the court that he had made inquiries with both the Law Society of England and Wales and the Law Society of Ireland, which had informed him that the solicitor in whose presence the affidavit was signed, Jack Sheehy, was not registered with either body as a practising solicitor.
Mr Beades read from an email he had received that morning from what he described as the "fraud intelligence unit" of the Law Society in London, saying: "Having checked our records and made further inquiries I can confirm that Mr Jack Sheehy is not a solicitor in England and Wales."
Mr Beades also said the Law Society of England and Wales informed him that the fraud and intelligence unit was investigating the matter. He argued that the bank's claim could be based on "criminal documents".
Mr Justice Peart gave Mr Beades until June 22, to reply to the bank's claim, and listed the case for mention on June 26.
He told the developer to ensure that his reply was as concise as possible, and explained that if he wanted to defend the action, it would be adjourned for a full hearing on June 26.
Monday, May 28, 2012
First blood goes to developer fighting own case against banks - Independent.ie
Nama faces losses of up to €8bn on 'junk' land - Independent.ie - (But it's Peter Bacon saying it...so proceed with caution!)
PETER Bacon, the creator of Nama, has said it is facing into multi-billion losses as a result of the continued fall in property prices. One government TD estimated the likely hole to be €8bn.
Mr Bacon's comments come in the wake of the Comptroller and Auditor General's report on Thursday into Nama, which said the agency had overpaid for the loans it acquired from five Irish banks.
The C&AG said that, as a result, Nama would struggle to recover the €32bn it paid to the lenders and its costs.
Speaking yesterday to the Sunday Independent, Mr Bacon said he was reluctant to put a figure on the size of the likely loss, saying: "You could use any assumption you like and come up with a figure."
However, he admitted that he had concerns over the agency's direction in attempting to ensure a proper return for the taxpayer.
Mr Bacon said: "Nama paid more than the current market value and said it was taking a long-term valuation. If you are trying to sell that asset within seven years, then it is not long-term and major losses are likely."
This weekend, Fine Gael TD Peter Mathews said that the C&AG's report showed that "all is not well with Nama". He said Nama was facing a hole in its balance sheet of up to €8bn and that he was deeply concerned.
"Nama cannot hide behind the screen of secrecy and privacy and there may be a temptation for it to use the armour-plated legislation it enjoys to insulate itself," he said.
Chairman of the Oireachtas Finance Committee Alex White said there was a lot of concern in political circles over Nama's accountability and transparency.
"There needs to be a greater willingness on Nama's behalf to explain its policy when the State and taxpayer are on the line for so much money."
Mr White confirmed that it is the intention of the committee to bring Nama before it in July to explain itself.
Finance Committee member Liam Twomey of Fine Gael said Nama enjoyed "incredible powers" and that given that the greatest concern is over its Irish lands, Nama could be sitting on €18bn worth of 'junk' land.
"The fallout of Nama not working is too enormous to fathom," he commented. "The Irish assets are grossly depressed and this poses great doubts over the figures presented by Nama."
Nama has insisted that it is acting to the maximum levels of openness allowed under its governing legislation.
In its response to the C&AG report, Nama said the report concluded that based on its audit and on specialist advice commissioned by it, the C&AG was satisfied that he had received a reasonable degree of assurance that Nama's valuation processes were robust.
Nama chairman, Frank Daly, said: "Overall, I am satisfied, based on the conclusions drawn in this independent and thorough report, that the approach we adopted was largely right, notwithstanding the very difficult circumstances which prevailed during Nama's establishment phase and the absence of precedents to guide us.
"The Comptroller's report also highlights the challenges associated with managing the acquired loan portfolio so as to generate the cash flows that will enable Nama to meet its debt repayment targets.
"These challenges are well known to us but we remain very much on course to fulfil the primary commercial objective that has been set for us by the legislature."
Daniel McConnell: More must be done to tackle mortgage debts - Independent.ie
'Debt is the Irish crisis -- sovereign debt, banking debt and personal debt," Finance Minister Michael Noonan famously said earlier this year. How true that statement was. 6,685 -- that is the number of people who fell into arrears of more than 90 days on their mortgages in the first three months of 2012.
That is 6,685 couples, families in Dublin, in Cork, in Galway and every town, village and parish across Ireland who have simply run out of money to pay the monthly amount to keep the roof over their heads, and now face the real risk of losing their homes.
Alan Shatter's staunch criticisms of the bank's behaviour yesterday echo the strong public resentment over their lack of action in tackling the personal insolvency crisis to date, the latest Sunday Independent Millward Brown Lansdowne nationwide poll. When asked, an overwhelming majority of people, 86 per cent, said they felt the banks are not doing enough to help homeowners in negative equity or those in arrears
According to the latest available figures from the Central Bank, at the end of March, out of the 764,138 private residential mortgages in Ireland, 77,630 or 10.2 per cent are now in arrears of more than 90 days. One in 10 of every mortgage is now in trouble and the numbers are soaring.
Worse still, of that 77,630, more than three-quarters of those, 59,437, are now in arrears of more than six months on mortgages totalling almost €13bn.
Almost 80,000 home mortgage accounts were deemed "restructured" at the end of March, up 7.2 per cent since December. By the end of March, 38,658 mortgages that had been restructured were "performing", while 41,054 were in arrears despite being restructured. That means, in total, 116,288 mortgages are either now in arrears of more than 90 days or had been restructured.
So are all these people reckless fools or genuine victims? What is to be done with all these people? How, as a country, do we tackle this debt catastrophe?
In response to the mounting crisis engulfing this island, last Monday, the State's two top banking officials, Governor Patrick Honohan and Financial Regulator Matthew Elderfield, in their polite bureaucratic tongues told the Government and the banks it has bailed out to get their fingers out and sort out the Irish personal debt crisis.
Elderfield said he was not "comfortable" with the level of mortgage arrears and called on the banks to do more.
He declared that by the end of this month, the banks must decide which loans were salvageable and which were not. "If someone is deeply in arrears . . . simply putting them on interest only isn't going to work. You have to tackle that," he said.
The implication to the banks was clear -- 'lads, stop deluding yourselves and if you have to write down the debt, then write it down and move on'.
But we know that the banks are very reluctant to face up to the losses they are sitting on. While they claim to be dealing properly with their customers, it is clear from Elderfield's point of view they are not.
That view was echoed by Taoiseach Enda Kenny in the Dail on Wednesday. Mortgage arrears was the single biggest issue facing Irish people, Mr Kenny said. The
banks, who had been propped up by the Irish taxpayer, must show a "greater urgency" in sitting down with borrowers and facing up to the problem, he said. Justice Minister Alan Shatter's personal insolvency bill, which has divided opinion so far, is due to be brought forward next month, and will contain a range of options for those struggling with debt, including reducing the term of bankruptcy in Ireland from 12 years to three.
For their part, the banks have legally moved against 278, with 170 properties taken into their possession, an increase of 27.8 per cent on the last three months of last year.
Despite this, apparently the Irish banks "recognise the human impact of mortgage arrears statistics".
"Our position on personal insolvency is unchanged. It should be done in a way that avoids unintended consequences, respects the repayment obligations of customers and minimises the impact on banks' balance sheets, capitalised to a large extent by taxpayers," the Irish Banking Federation said.
When contacted, both AIB and Bank of Ireland said they had hundreds of staff dedicated to dealing with mortgage difficulties and had new products on the market or about to come on the market to aid those in negative equity.
But there are fears that crystallising these losses will force the taxpayer into further capitalisations of the banks, and also jeopardise our chances of returning to the markets as planned next year.
As pointed out by Shane Ross in the Dail on Wednesday, akin to the talk of a second bailout, despite assurances from Government, there is growing anticipation of a need for further taxpayers' money to be injected into the banks.
Stress tests planned for this year have been postponed and the confidence about the official statistics is buckling.
This is a hot political potato and one that requires delicate handling in the weeks and months to come.
This weekend, it emerged that the Department of Justice had advertised for the new head of the Personal Insolvency Agency -- or the Nama for the little guy. Portrayed by Government as a global first, there is still much scepticism around the viability of the Coalition's approach, which is undoubtedly complex and fraught with dangers.
While any move to face our debt crisis is welcome, there is still far too little detail as to how Shatter's bill will work. Further clarity will be needed before any determination can be reached and, in my view, the banks still have too much power.
Elderfield and Honohan are to meet the boards of AIB, Bank of Ireland and Permanent TSB over the next two months to "take a direct and personal interest" in making sure the banks address their troubled mortgage books.
The powerful intervention by Elderfield and Honohan last Monday was a welcome clarion call for common sense. It's now up to the banks and the Government to heed that call.
AIB to sell €675m property loan portfolio
Allied Irish Banks has launched the sale of a €675m property loan portfolio, providing the latest sign that Ireland’s lenders are accelerating their distressed debt disposal programmes.
The bank has appointed Morgan Stanley to run a sale process for the loans, which are mainly secured against Irish offices, and has approached a number of potential buyers during the past week.
More
On this topic
- AIB plans return to profitability in 2014
- AIB ponders €1.4bn property loan sale
- AIB chooses Duffy as chief executive
- US fund drops challenge to AIB buy-backs
IN Banks
The portfolio, codenamed Project Kildare, is likely to attract interest from private equity and vulture funds, which have been actively buying up distressed property loans during the past year.
It is unclear how big a discount AIB will have to accept on the debt. However, recent sales of loans backed by Irish property have attracted bids below half the original value of the debt.
The sale comes just weeks after Lloyds Banking Group put its own €360m portfolio of Irish real estate loans on the block. It reflects a push by banks to shed the billions of euros of legacy debts built up during Ireland’s property boom.
Ireland’s three main banks – AIB, Bank of Ireland, Irish Life & Permanent – are being forced to shed non-core loans to clean up their balance sheets following a banking crisis that forced the country to accept a €67.5bn bailout from the European Union and International Monetary Fund in November 2010.
Irish commercial property values have collapsed since the start of the financial crisis, falling 65 per cent. Meanwhile, the large overhang of offices and retail sites developed during the property boom have driven rents down by 47 per cent since 2007.
Under the EU-IMF programme the banks must remove €70.4bn of non-core assets from their balance sheets by 2013 to wean themselves off emergency funding provided by the European Central Bank and the Central Bank of Ireland.
AIB, which was nationalised during Ireland’s banking crisis, said in March it had reduced the size of its balance sheet by shedding €12.7bn in non-core assets in 2011.
The bank has a target to shed €20.5bn non-core loans. It is also thought to be considering similar sales of property loans secured against UK and continental European assets.
AIB reported a loss after tax of €2.3bn last year, down from €10.2bn in 2010 at the height of Ireland’s banking crisis. The bank declined to comment.
Spanish and Irish property markets still stuck in slump mode | Business | The Guardian
Of all Spain's troubled banks, Bankia has the biggest exposure to failed property developments.
At the last count it had €37bn (£29bn) in loans to housebuilders, with a backlog of interest payments on almost three in 10. To make matters worse, the bank has €9.1bn of repossessed property sitting on its books.
Fears that Spain cannot cope without an EU bailout are fuelled by figures showing Bankia's toxic real estate assets, including loans in and about to fall into arrears to housebuilders and repossessed property, totalled €32bn at the end of 2011.
If it were an Irish bank, there is little doubt it would already be wholly nationalised and its worst performing loans split into a separate pool of toxic debt.
But Bankia, like most of its banking rivals on the Iberian peninsula, has suffered while politicians have disguised the extent of their losses.
The main shield for beleaguered Spanish banks is an opaque property market. Officially prices are 20% down from their peak – but the government bases its figures on valuations by the banks, which hold hundreds of thousands of repossessed properties on their books.
Analysts have long argued that it is not in the banks' interests to depress the values of their own properties to match sale prices, which is the usual measure of a home's value. But there is no equivalent of the Halifax, Nationwide or even Land Registry monthly publications of sales data to provide a counterweight.
A study last month by Pompeu Fabra University, commissioned by the Tecnocasa property group, found that house prices have fallen 41% since the peak. Similar studies have drawn the same conclusion.
Meanwhile, official figures remain artificially high and protect the banks and building societies, known as cajas, from accepting they have an even bigger problem.
The Irish government took the opposite view in 2010 when it became obvious a property building boom had wrecked the finances of its main banks.
In September of that year, the Fianna Fáil-led government nationalised Allied Irish, its second-largest bank and the fourth to be taken into public ownership.
Toxic assets were separated into a National Asset Management Agency (Nama), which paid €32bn for a sprawling property and loans empire built up by the banks not only in Ireland, but across Europe and the US.
Only this week the Irish Comptroller and Auditor General said in its second special report on Nama that it overpaid for the assets, which it argues are worth 75% of the original price.
But the government took the view that the only way to restore confidence was to "kitchen sink" the bank's debts and guarantee to repay bondholders in full. Bondholders had provided loans to the banks, which were in turn loaned to developers.
Irish finance minister Michael Noonan argues that the economy is moving again because international investors can see that the situation, while difficult, is transparent.
But though exports are growing, the economy remains in recession and house prices have continued to fall. The most recent figures from the Central Statistics Office show prices were down 16.4% across the country in the year to April. The only ray of sunshine was a small rise in Dublin for the second month in a row, something that last happened in February 2007.
The number of problem mortgages in Ireland has also jumped as falling house prices combine with stubbornly high unemployment to make the situation worse.
More than one-in-seven Irish home loans are not being fully repaid in April and a total of 116,288 mortgages were either in arrears or had been restructured, up 8% compared with the start of the year.
The lesson for the Spanish is that coming clean about Bankia's debts is the first step, but not the end of the story.