IFC helps Colombia create first secondary mortgage company
( 2001-07-17 16:32 ) ()

The International Finance Corporation (IFC) has signed an agreement to provide US$40 million in equity investment to create Colombia's first secondary mortgage company, Titularizadora de Colombia, the IFC announced Monday.

IFC, the private sector arm of the World Bank Group, has also approved a local currency guarantee facility of US$100 million to support the development of Titularizadora de Colombia.

IFC's investment will help provide affordable financing to home buyers and lower the cost of mortgage loans as well as strengthen Colombia's financial markets by making Titularizadora de Colombia available to banks as a liquidity facility and guarantor of mortgage-backed securities, the IFC said.

Titularizadora de Colombia will be an independent, multifunction company with the objective of acquiring and securitizing high-quality residential mortgage loans. It will help improve the efficiency of loan origination and will create standards in a number of aspects of mortgage lending and practices. In addition, the new entity is expected to facilitate liquidity through the purchase of qualified mortgage loans from any qualified mortgage originator.

IFC's investment "will contribute to the reactivation of the construction industry in Colombia, as well as promoting economic and social development through the creation of new jobs and affordable housing," said Karl Voltaire, IFC's director for Latin America and the Caribbean.