Housing Finance in Mexico: Current State and Future Sustainability
In 2001, Mexico introduced a comprehensive federal housing policy package. The results have been quantitatively impressive; however, there are qualitative concerns. It is also uncertain whether current subsidy programs have negative financial implications for participating mortgage issuers, as poorer applicants with lower job stability are injected into the pool of borrowers. This paper addresses that question by analyzing a large database provided by INFONAVIT, Mexico¿s principal mortgage issuer, which contains information on borrowers¿ repayment behavior. It is found that borrowers who received subsidies do not show higher default rates than borrowers who received no financial assistance. Borrowers receiving subsidies actually take longer to show their first default than borrowers not receiving subsidies. Therefore, current subsidy programs do not seem to have negative financial implications for participating mortgage institutions.
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| Format: | Technical Notes biblioteca |
| Language: | English |
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Inter-American Development Bank
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| Subjects: | Housing, Financial Sector, Public Administration, G18 - Government Policy and Regulation, G21 - Banks • Depository Institutions • Micro Finance Institutions • Mortgages, G28 - Government Policy and Regulation, H81 - Governmental Loans • Loan Guarantees • Credits • Grants • Bailouts, R31 - Housing Supply and Markets, R38 - Government Policy, R51 - Finance in Urban and Rural Economies, Access to credit, Market failures, Public Policy, Policy adequacy, Mortgage insurance, Housing, Housing finance, Financial sector, |
| Online Access: | http://dx.doi.org/10.18235/0008970 https://publications.iadb.org/en/housing-finance-mexico-current-state-and-future-sustainability |
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