Home Financing Institutions in Argentina

(Available only in Spanish) This work analyses the case of the deepening of mortgage lending in Argentina in the 1990s and compares it with the failure of the 1980s. It shows that macroeconomic stability determines the development of the market and that a rapid takeoff can be achieved with the appropriate legal and market institutions (competition between banks and dollar contracts). The real price of property, and unemployment influence the performance of the market, which expands at the rate of the increase in the capacity available for bank loans. Mortgages successfully competed with the other fund applications offered by the banks because of their capacity to diversify risks and their guarantee of repayment. Recently, a serious macroeconomic crisis led to a run of defaults on contracts which jeopardized the right to recover mortgages. The reconstruction of the market is expected to be very slow, given the experience of the 1980s. The process will probably consist of creating a currency of account for the denomination of the contracts, implementation of capital market instruments as an alternative to the bank instruments, and improved information, in order to reduce transaction costs and connect demand with investors interested in the mortgage business.