Analysis of Infonavit’s Mortgage Foreclosed Portfolio

INFONAVIT

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Infonavit has a portfolio of several thousands of mortgage foreclosed properties. These properties concentrate disproportionately in several municipalities, so the way and the time Infonavit chooses to dispose of them will have a considerable effect on these communities. Beyond the specific approach Infonavit takes on placing its foreclosed properties back on the market, the only monitoring these dwellings receive centers around the legal procedures needed to claim the collateral. No further analysis is performed on this portfolio and the spatial dimension of the issue is hardly being considered. At the moment, Infonavit is unable to locate with reliable precision its foreclosed dwellings.

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This project is being scoped

Project scope

Project goal(s)

Geocoding the records of the database to locate the houses that have been or are in the process of being mortgage foreclosed. Performing a cluster analysis to determine where the major concentrations of these properties are. Defining if there are any other factors with a strong spatial correlation that should be considered in future analysis.

Interventions and Actions

Infonavit has recently approved three new programs to place properties back into the market. The first includes all units which are not part of a foreclosure cluster; these can be sold directly to individual purchasers. The second Program allows local governments and mission-driven organization with rehabilitation plans for a certain area to purchase groups of units. The third is aimed at clusters of foreclosed units: for these, Infonavit hires a diagnosis and crafts a masterplan, then requests proposals from organizations to enact targeted real estate and urban rehabilitation projects.

In the short run, if geocoding and analyzing the foreclosure process database becomes possible, the actions of the existing programs could be planned with more time (which would reduce the time these properties sit idle) and with a broader understanding of the problem.

In the long run, understanding what causes these foreclosure clusters would enable Infonavit to modify its underwriting criteria accordingly.

Data

Currently, Infonavit tracks the procedural progress of every individual foreclosure with a system called SIAL (Legal Administration System). The SIAL database has approximately 1.4 million records which include the houses that have been foreclosed and can now be sold, those that were sold in the past, and the houses that are now in the process of foreclosure. So far, this system has been used solely for operational purposes, never for analysis meant to inform the Institute’s policies. And while the data gathering protocol could improve considerably, there is valuable information that could lead to significant findings. The databases gathered from SIAL could also be linked to other Institutional databases (underwriting at different locations, in different years, creditholder characteristics, etc.) and potentially reveal new correlations. This information could also be further analyzed using INEGI’s housing census. The Unified Housing Register (RUV) records the construction of every new house geared towards any government subsidy. RUV works closely with Infonavit; their databases could also be analyzed with SIAL’s.

Analysis Needed

While the full definition of the analysis needed will be decided during the project’s scope, we believe that geocoding and running cluster analysis to the SIAL databse is definitely necessary.

Validation Methodology

Will be defined during project scope

Implementation

Will be defined during project scope

Scope version notes