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Peru gets a Fannie Mae lookalike

Peru has set up the equivalent of Fannie Mae, reflecting the growing importance of mortgages in the country.

At the end of December, the International Finance Corporation, the private sector arm of the World Bank, signed an agreement with Titulizadora Colombiana, Colombia’s secondary mortgage market company, and Banco de Crédito, Peru’s main mortgage lender, to establish the new entity, called Titularizadora Peruana.

It will be an independent company focused on acquiring residential mortgage loans and structuring mortgage-backed securities. It has an initial working capital of $3.6 million and the IFC will provide it with a credit line of $50 million to purchase mortgage portfolios. It is expected to undertake its first securitization of up to $100 million in the first six months of this year.

The mortgage market has been expanding rapidly in Peru (outstanding mortgages amount to $2.2 billion compared with $1 billion in 2001).

Marc Tristan, investment officer of the IFC in Lima, says: “I think this is the right moment to set up this type of company in Peru. Total outstanding mortgages are expected to reach the $3 billion level this year, and the country is suffering from a severe deficit of 1.3 million housing units.

“The banking system cannot keep pace with mortgage demand. Commercial banks’ capital has only increased from $1.8

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