1996-09-26 Local Press - 60% of Mortgage Debtors Could Lose their Homes
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60% of Mortgage Debtors Could Lose their Homes
If they do not restructure their debts by September 30, 60% of Mexicans who have fallen behind on their mortgage payments could lose their homes. According to the debtors' organization, El Barzon, only 292,795 of a total of 900,000 mortgage debtors have restructured their debts under a recent government program designed for them. Under the program, if the delinquent mortgage holder does not restructure his/her debt by September 30, home ownership will be transferred to a trust fund, and the former owner will have to rent the house from the trust fund.
El Barzon announced a campaign called, "It is my children's house, and I will defend it," and warned that about 8% of delinquent mortgage debtors (70,000 families) are unable to pay any rent. Six of every ten mortgage holders have stopped their regular bank payments. The total portfolio of non-performing mortgage loans is estimated at more than 117 billion pesos (about $16 billion). Between January and August, bankers have confiscated properties worth 9.64 billion pesos (about $1.3 billion): including ranches, machinery, houses, factories, vehicles and businesses. (El Financiero, 18 September)
Credit Unions In Trouble
More than 500 credit unions around the country hold a portfolio of 25 billion pesos in non-performing loans. They are currently unable to provide further financing for more than 60,000 micro and small businesses that previously depended on them, which could cause a massive closure of businesses and up to 600,000 layoffs. Nacional Financiero (Nafin) was the principal provider of funds to these credit unions until it froze its lines of credit in October 1994. (La Jornada, 23 September)
Private Sector for Petrochemical Privatization
In response to the Pill Assembly's rejection of the privatization of the petrochemical industry, private sector leaders urged the government to continue with the privatization process, arguing that it is an important tool in reactivating the economy. Finance Secretariat spokesperson Alejandro Valensuela said that, "Privatizations must continue in all areas, but alternatives that lead to greater productivity and efficiency and greater domestic and foreign private investment must be sought." (Reforma, 24 September)