Mexico Follows U.S. in Foreclosures Crushing Builders
By Jonathan Levin - Apr 2, 2013 10:42 AM ET
Just as the U.S. emerges from the worst of its foreclosure crisis, Mexico’s is getting worse.
Home repossessions more than doubled last year to a record 43,853 from 2011, according to Infonavit, the state-backed lender responsible for about 70 percent of home loans in Mexico, as the past decade’s expansion in government-subsidized housing backfires and adds to a glut of empty homes weighing on the nation’s beleaguered builders.
Efforts to build thousands of properties on low-cost land beyond city limits has led to unpaid mortgages as workers shun commuting costs and return to urban living, according to the government. With abandoned homes mounting, Infonavit has ramped up home seizures by acting on unpaid taxes instead of delinquent loans, reducing its transaction time to about four months from more than two years, the lender said.
“We have a serious problem with unoccupied homes,” Eduardo Torres, an economist with the local unit of Banco Bilbao Vizcaya Argentaria SA (BBVA), said in a telephone interview from Mexico City. “They were built under the false premise that the housing deficit was so great that everything they built would be bought regardless of conditions. So people got their homes, but that didn’t resolve their needs when the homes were three hours from their jobs.”
Infonavit has been financing home purchases since the 1970s in part to help curb a housing deficit caused by population growth and properties in disrepair. The policy created windfalls for homebuilders, sparking a wave of initial public offerings and foreign bond sales over the past 10 years, with investors rushing to finance a government-backed industry that seemed shielded from economic swings.
more:
http://www.bloomberg.com/news/2013-04-02/mexico-follows-u-s-in-foreclosures-crushing-builders.html
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