Colombian Mortgage MarketPricing Structure
UPAC collapsed:•M.IR reached 60%.•Economic recession.•Capitalization of interests was declared unconstitutional.
Early 70’s
•Creation of UPAC (Unit ofConstant Purchasing Power).
70’s – early 90’s
UPAC was modified several times:•Linked to M.IR.•Capitalization of interests.
Mid 90’s – Late 90’s
Creation of UVR.•Linked to inflation.Conversion of CAVs into Banks.
Dec 99 2000
•Loan balances recalculated with UVR.
2002
•UVR
Colombian Mortgage MarketMortgage trends
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1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
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Disbursements
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Creation of the CHMCWB 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
Creation of the CHMCWB 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$100 million.•Attract new investors (AVVillas, Colpatria, CAF). •Assistance in risk management, technological development and organizational structure.
Creation of the CHMCWB Strategy and IFC Role
Recent Achievements 2002
•First mortgage issue in April 2002•COP 464 billion (US$ 200 billion)•Demand 8.9 times.