As 2007 came to a close, MBS players around the world steeled themselves against subprime contagion. But Hipotecaria Total (HiTo) took a bold step forward unveiling a highly innovative, mortgage securitization vehicle in Mexico and issuing the first so-called Bonhitos on December 20. HiTo was founded barely a year earlier for the sole purpose of creating and sponsoring an efficient platform for the securitization of mortgages in Mexico.
HiTo combines securitization technologies from Europe and the U.S., traditional Mexican mortgage funding methods and its own structural variations to create a product tailored to Mexico but with features that can apply to other emerging or developed markets. But its benefits hinge on the integrity of a highly complex, untested system and the behavior of a secondary market that is still nascent.