The United States' neighbor to the north hosted the Mortgage Bankers Association of America's International Real Estate Conference, but it was Mexico that occupied mortgage bankers' minds.

Bankers said the nation south of the border offers an alternative source of loan growth as margins shrink in the United States but that it remains difficult to lend with confidence to Mexican borrowers.

"Credit bureaus are just getting started down there," said Francis S. Hattemer, managing director of Bank United, Houston.

With comprehensive credit histories on Mexicans unavailable, Bank United and other lenders are focusing on U.S. and foreign borrowers seeking to buy homes in Mexico.

Paul Freudenthaler, director of international development for Inland Mortgage Corp., said the company has closed about 20 loans in Mexico and the pipeline of prospective loans is growing. To date, none of the loans has had delinquency problems, he added.

Inland is marketing its loan products in Mexico through magazine ads and representatives based there, Mr. Freudenthaler said.

Once credit reporting issues are resolved in Mexico, the market could be very attractive to U.S. lenders, said Manuel Zepeda, director general of FOVI, a housing finance unit of Banco de Mexico, the nation's central bank.

Only one-third of the demand for housing in urban areas of Mexico will be met this year, Mr. Zepeda said. And half of Mexico's population is younger than 30, so an ample market of first-time homebuyers will exist, Mr. Freudenthaler said.

Mr. Zepeda said the time is right for U.S. mortgage bankers to form joint ventures with Mexican counterparts. In addition, Banco de Mexico is seeking a partnership with a U.S. mortgage insurer, Mr. Zepeda said. The bank wants access to technology that mortgage insurers have, he said, to be able to manage credit guarantees on mortgages more efficiently. No private mortgage insurance company exists in Mexico.

Credit risk isn't the only issue for U.S. lenders doing business in Mexico. Currency risk is a major concern.

Mr. Freudenthaler and Mr. Hattemer both said that, when they first started to lend in Mexico in 1994, Wall Street firms were enthusiastic and willing to invest to help fund the loans. But the value of the peso plunged later that year.

"Devaluation hit, and people didn't return your calls," Mr. Freudenthaler said.

Michael Seats, director of international operations at Residential Funding Corp., said his company is limiting its activity in Mexico to dollar-denominated loans to U.S. borrowers wanting to buy retirement homes.

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