Latin America's mortgage market is stable, has a huge potential for growth, and is hungry for foreign capital.

That's the message mortgage banks and government agencies from Brazil, Colombia, Argentina, Costa Rica, Mexico, and Chile delivered to U.S. mortgage bankers and other business people gathered here for the Mortgage Bankers Association's annual international real estate seminar.

But most investors are not yet convinced. Mortgage companies and banks from outside Latin America, it seems, were mostly here to look, not necessarily to buy.

"It's like a bunch of people standing around a pool, waiting for someone to be the first one in," said Stuart Landucci, vice president of global trust services at Chase Manhattan Bank, one of only a handful of major U.S. banks represented. "There's a few people on the diving board right now, but that's it."

Last year's devaluation of the Mexican peso seems to have left deep scars on the confidence of potential investors, some of whom had been about to dive in before the crisis. People who had spent months or years researching and structuring deals were left in the lurch.

"We were all set to securitize" a pool of mortgage loans in the United States, said a Mexican banker, "then there was the devaluation of the peso." He is now looking to Mexican investors, hoping that recent regulatory changes will create demand for the securities among the country's pension funds.

In welcoming seminar participants, Costa Rica Vice President Rodrigo Oreamuno Blanco called his nation's capital a perfect spot for negotiations because of its location near the center of the Americas and its history of living harmoniously with nature and avoiding the political infighting of its neighbors.

Notable at the conference was the absence of rating agencies. Both Moody's and Standard & Poor's had participated previously.

Last week's five-city terrorist attacks in Mexico, attributed to the Popular Revolutionary Army, were on many investors' minds, especially those interested in buying mortgage loans for vacation properties in Mexico.

"That's just what they're talking about - the county is selling off its patrimony to Yankees," said a potential investor, referring to a manifesto the guerrillas distributed to newspapers nationwide.

But several players have concrete plans. IFS Financial Corp., Woodlands, Tex., has formed International Mortgage Resources Corp., a subsidiary intended to offer financing to Americans and Canadians wishing to buy vacation homes in Mexico.

The venture, headed by Kevin A. Garcia, formerly chief executive of VBFSB Holding Corp., Wilmington, Del., will open its first office this year in Cabo San Lucas in the Mexican state of Baja California.

The venture may outsource its servicing to AccuBanc in Dallas, also an IFS subsidiary, said Rosa Dalia Hernandez, its vice president of mortgage operations. Intermac expects to open additional offices throughout Mexico's resort areas.

ICM Mortgage, the lending subsidiary of Pulte Home Builders, a North American tract-home giant, has a 30% share in an 18-month-old Mexican mortgage company named Su Casita.

ICM has given the company technological advice, as well as marketing and servicing help, said Jose Manuel Agudo Roldan, president of Su Casita.

And Weyerhaeuser Mortgage, Woodland Hills, Calif., recently bought subservicing rights on a Mexican bank's underperforming mortgage portfolio.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.