The RMBS downturn in Mexico, most acute among nonbank originators, has put sector regulator Sociedad Hipotecaria Federal (SHF) on war footing.
In September the agency made the inclusion of a master servicer in mortgage and construction-loan deals a precondition for carrying the SHF stamp, only one of the rules it has instituted this year as a way of reviving investor confidence in the sector and strengthening transactions.
SHF approval carries with it a commitment of secondary market support, a powerful incentive in the local market.
"With a master servicer, investors are going to have access to information that's more trustworthy," said Paloma Silva, deputy general director of housing market development at SHF. "It mitigates the risk of a servicer and generates more capacity to detect problems early on."
Market players would agree, but the move is unlikely to broaden the playing field of servicing in any meaningful way. Activity is just too limp for much business to go around.
There's another reason as well. Two companies dominate the sector right now, GMAC Financiera and Chile's ACFIN. The latter has a lock on business with one state-owned originator, Infonavit, and a developing relationship with another, Fovissste. Since they're the ones providing the bulk of RMBS volumes, there's an even smaller incentive for newcomers to try their luck.
ACFIN, for its part, has also begun spreading beyond the housing sector, in a sign perhaps that bigger opportunities will be popping up elsewhere.
Specializing in master servicing, ACFIN only launched its services outside of Chile in 2006. Now the company has 33 deals under its belt, with a good number of them linked to Infonavit. In July 2008, Infonavit RMBS investors agreed to have ACFIN retroactively become master servicer for all the agency's deals.
"Growth in RMBS is coming from Infonavit and Fovissste," said Juan Diego Risopatron, business director of ACFIN. Even banks, less affected by the crisis than their nonbank peers, seem to have shed their enthusiasm for structured finance, he added. "They're not pursuing securitization with the same force."
The Chilean master servicer has already closed two deals backed by the accounts receivables and is now working on a third. In addition, Risopatron expects that next year will see the launch of a program backed by payroll-deductible loans, which already has ACFIN attached. The approach will be "similar to a securitization," he added.
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