Dáil Éireann Debate, Wednesday - 18 April 2012
138 Deputy Pearse Doherty asked the Minister for Finance his views on whether there has been a reduction in the value of the National Assets Management Agency or its debtors’ assets that can be prescribed to NAMA approving rent abatements. [18124/12]
View answerI am advised by NAMA that rent abatements have typically been agreed for an initial fixed period of no more than twelve months and that thereafter they are subject to ongoing assessment by reference to factors such as turnover and business profitability. The objective of agreeing rent abatement in the first instance is to support the short-term viability of a business which is intrinsically viable but experiencing difficulties arising from current economic conditions. In cases where there is genuine hardship which can be ameliorated by rent abatement, NAMA achieves two significant benefits. Firstly, it helps preserve the value of the collateral supporting its loans by ensuring that tenants remain in business and continue thereby to generate rental income. Secondly, it safeguards jobs and economic activity in general.
Any short-term loss of rental income arising from rent abatement and any short term decrease in the value of the asset where there is rent abatement, therefore, is likely to be more than offset by these long-term benefits.
139 Deputy Michael Healy-Rae asked the Minister for Finance the estimated cost to the Exchequer if a National Asset Management Agency type scheme were to be brought in for mortgage holders; and if he will make a statement on the matter. [18126/12]
View answerThe Government is fully aware of significant difficulties some homeowners are facing in meeting their mortgage obligations and it is committed to advancing appropriate measures to assist those mortgage holders who are experiencing real and genuine difficulty. These include measures recommended in the "Keane Report" such as significant personal insolvency reform, the implementation of "mortgage to rent" as a social housing response, Central Bank engagement with individual mortgage lenders on their mortgage arrears resolution strategies and the development and provision by lenders of specific solutions to assist their customers experiencing mortgage difficulty and the provision of a mortgage advisory function. While the Government and the Troika are in ongoing contact on the further measures the Irish banking system and the State could deploy to further enhance the stability of the banking sector, there are currently no specific proposals under active consideration for a measure, along the lines adopted in respect of the National Asset Management Agency, to specifically provide direct assistance to mortgage holders experiencing difficulty meeting their mortgage obligations. Accordingly, given the significant number of variables that would have to be considered and decided if such a proposal was envisaged, it is not possible to provide an estimate of the potential cost to the Exchequer of such a proposal at this time.
