The Mexican residential mortgage-backed securities (RMBS) domestic issuance market grew 12.8% in the second half of 2011 to $2.68 billion from $2.37 billion in 2010, according to Standard & Poor's (S&P) Ratings Services' Mexican RMBS Index.
However, S&P notes that although the Mexican economy showed signs of strengthening last year, the country's mortgage defaults reached 8.1% by the end of 2011 and the economy was still a great distance from full recovery. S&P cautions that it will ‘likely take an additional 12 to 18 months of stable economic growth for the Mexican RMBS market to show solid signs of a recovery.’
‘2012 will likely continue to test Mexico's RMBS market,’ says Marisol Gonzalez de Cosio, S&P credit analyst. ‘Weak economic growth in the U.S. and around the world could easily harm economic growth in the Latin American region and derail any improvements in the Mexican RMBS market during the year.’