DEVELOPERS WHO default on property loans due to Irish banks or have assets seized should be prevented by law from buying them back again at knock-down prices, the Green Party has said.
A memorandum on the legislation needed to found the National Asset Management Agency (Nama) will go before the Cabinet when it meets next Tuesday.
The new agency must also play a leading role in delivering lands needed for public housing and other infrastructure in the decades ahead rather than leaving the State at the mercy of private land-owners who have to be bought out at exorbitant prices, Green Senator Dan Boyle said.
He acknowledged that serious constitutional questions would have to be overcome to prevent developers who bought land using one corporate identity from buying the land again using another corporate creation, “but ways will have to be found”, he said.
The legislation founding Nama – the brainchild of economist Peter Bacon – would also have “to be clear about how valuations are put on property”, Mr Boyle said, although he acknowledged that common rules would be difficult since the lands would have been bought at different times and on different terms.
The Department of Finance has begun work on the details of the Finance Bill necessary to legislate for the changes included in the supplementary Budget.
The Finance Bill will be published on May 7th. Its second stage Dáil debate will take place on May 12th and 13th. The committee stage will be on May 21st and its report stage on May 27th. It will be dealt with by the Seanad on May 28th.
Meanwhile, Fianna Fáil Dublin MEP Eoin Ryan demanded that the banks help mortgage holders to hand in fixed-rate mortgages for currently cheaper variable loans.
“Tens of thousands of people in Ireland have fixed mortgages for their homes and they are paying interest rates of 5.5 per cent or even higher,” said Mr Ryan, who is running for election in Dublin.
“In a spirit of solidarity and taking into account the support the State is now giving Irish banks from taxpayers monies, the banking sector itself must demonstrate to the people of Ireland that it is willing and able to help people through this recession,” he went on.
Mortgages could now be secured for “4 per cent or even less”, said Mr Ryan, who is a member of the European Parliament’s economics committee. “I have seen mortgages advertised at a level of 3.5 per cent recently.”
Labour TD Róisín Shortall said variable-rate mortgage holders had seen their interest payments cut by 26 per cent over the last year. “This has helped somewhat to offset pay cuts, extra taxes and extra levies. It has helped them to meet higher costs on items like groceries, insurance, childcare and GP fees.”
The Government justified its decision to abolish mortgage interest relief for those with mortgages over seven years because rates have fallen, “but not everyone has been so lucky”, she said.
One constituent has claimed that his bank has demanded €14,000 to switch from his 12-year fixed rate mortgage.
“It is time the banks played their part,” Ms Shortall said. “It should be possible for the banks to offer a once-off penalty-free switch to a variable rate mortgage to existing customers or to at least reduce the penalty significantly. No one is asking for a free ride, just a bit of fair play.”