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Colombian Mortgage Market

Colombian Mortgage Market. Pricing Structure. Early 70’s. 70’s – early 90’s. Mid 90’s – Late 90’s. Dec 99. 2000. 2002. UPAC was modified several times: Linked to M. IR . Capitalization of interests. UPAC collapsed: M.IR reached 60%. Economic recession.

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Colombian Mortgage Market

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  1. Colombian Mortgage Market • Pricing Structure Early 70’s 70’s – early 90’s Mid 90’s – Late 90’s Dec 99 2000 2002 • UPAC was modified several times: • Linked to M.IR. • Capitalization of interests. • UPAC collapsed: • M.IR reached 60%. • Economic recession. • Capitalization of interests was declared unconstitutional. • UVR • Creation of UVR. • Linked to inflation. • Conversion of CAVs into Banks. • Loan balances recalculated with UVR. • Creation of UPAC (Unit of • Constant Purchasing Power).

  2. Colombian Mortgage Market • Mortgage trends Disbursements Stock Stock

  3. Creation of the CHMC • WB Strategy and IFC Role • Early Stages 1993-1998 • Support in the drafting of the new mortgage and capital market Law. • Intermediate Stages 1999- mid 2001 • Assistance in the implementation of the new Law. • Addressing the Constitutional Court ruling. • Break barriers between institutional investors. • Creation of an Ad-hoc Repo mechanism with CB • Creation of a Clearing Mechanism

  4. Creation of the CHMC • WB Strategy and IFC Role • Final Stages Late 2001-2002 • Creation of the CHMC in July 2001 • IFC’s equity investment of US$40 million and LCGF of US$100 million. • Attract new investors (AVVillas, Colpatria, CAF). • Assistance in risk management, technological development and organizational structure.

  5. Creation of the CHMC • WB Strategy and IFC Role • Recent Achievements 2002 • First mortgage issue in April 2002 • COP 464 billion (US$ 200 billion) • Demand 8.9 times.

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