A ‘reckless abandonment’ of lenders’ principles

THE head of NAMA has said a trawl through the banks’ books has revealed “a troubling picture” of how loans were secured and where there was a “reckless abandonment of basic principles” by lenders.

There had been an over-reliance on solicitors’ undertakings, a lack of stress-testing on loans, and the approval of irregular mortgages at all levels of banking, said agency chief executive Brendan McDonagh.

The NAMA chief revealed the banking practices while telling TDs why the average discount of 47% for loans transferred to the agency was different from the initial “haircut” of 30%, estimated last year.