Rocked to its core?
Mexico’s largest mortgage lender, government-run housing fund Infonavit, completed its first cross-border MBS placement this year, which bodes well for funding. But Mexico’s mortgage lenders are realizing that they must do more to attract institutional investors, especially mutual funds that are still wary of Mexican securitizations, as demand for mortgages in Mexico’s low- to mid-income segments is growing quickly. With $11 billion in assets, Mexican special purpose mortgage lenders, sofoles, are still a long way from reaching the $180 billion in funding that the state-run mortgage bank predicts Mexico needs to generate by 2020 to meet housing demand. Mexico’s mortgage-backed securities market makes up less than 1% of the country’s GDP, compared with almost 10% in the US.
Originators are looking to covered bonds to develop a new instrument to complement the fast growth of securitizations. Mexico’s second-largest mortgage lender, Su Casita, is considering moving into...
