Mexico's largest banking company, Grupo Financiero BBVA Bancomer SA, sees its fledgling cross-border mortgage business growing this year and in 2010 as Americans continue to buy second homes in Mexico despite a weak U.S. economy.
"At least for us, cross-border mortgages have grown," said Isidoro Sanchez, the director of business development at BBVA Bancomer's mortgage arm.
"We will be closing 2009 with around $150 million in cross-border loans," he said.
Spain's Banco Bilbao Vizcaya Argentaria SA, which controls BBVA Bancomer, lent about $100 million under its "Your Dream Home in Mexico" mortgage program last year, up from $65 million in 2007.
The dollar-denominated loans for U.S. and Canadian citizens are held on the balance sheet of the Spanish bank's U.S. subsidiary BBVA Compass Bank, while BBVA Bancomer provides the bank trust required for home purchases in Mexico along land borders and the coast.
While the minimum loan under the program is $100,000, the average so far has been about $500,000, Sanchez said.
BBVA's cross-border mortgage business stands to benefit from the restrictions U.S. banks have slapped on home equity loans in the wake of the housing bubble. Americans traditionally used those loans to fund home purchases in Mexico.
"We think the market is very big and we are betting on growth" next year, Sanchez said.