seeks that the beneficiary chooses if his credit is obtained in pesos or in UMA

In order to make the conditions that the ISSSTE Housing Fund (fovissste) offers its beneficiaries who are looking for a mortgage credit With the agency, President Andrés Manuel López Obrador sent an initiative to the Legislative branch to modify the conditions offered in financing for state workers.

This November 15, in the parliamentary gazette of the Chamber of Deputies, the initiative that consists of three substantial points appeared:

• Offer the possibility to the beneficiary to obtain his credit in pesos or in Units of Measurement and Update (UMA).
• Modify the registration period for applications for creditwhich would become continuous and not be limited to a period of time established by the organism.
• Determine the salary reference for the assignment of the creditwhich could be the pension, the base salary and, where appropriate, this together with the compensation established by the regulations.

“This initiative intends that the fovissste fulfill its purpose: to establish and operate a financing system that allows working people to obtain credit cheap and sufficient, through mortgage-backed loans in the cases expressly determined by the Executive Commission of the Housing Fund based on the reform itself”, can be read in the document.

The UMA problem

The fovissste is a public organization that began operations in 1972 and it is estimated that throughout its history it has supported more than 2 million people with credits that, according to the document, they would hardly have agreed with the commercial banks.

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In this context, the document explains that in 1993, on the eve of a global real estate crisis and faced with the instability of the peso, the ISSSTE law was modified so that credits granted by the Fund would be updated according to the increase in minimum wages.

However, given a possible lag between the inflation rate and the change in nominal wages, during the life of the mortgage creditsin 2016 a reform decree was published on the de-indexation of the minimum wage, where in the event of an increase in this above inflation, the balance of the debt would be updated according to the growth of the UMA.

Given this scenario, the fovissste began to update the mortgage credits according to the UMA, but this did not prevent the increases in the debt balances of its borrowers from continuing.

Although the agency has begun with pilot schemes for the delivery of financing in the modality of pesos and at a fixed rate, as commercial banks do, the Fund itself has recognized that it does not have the capacity to apply said modality to all credits what delivery

Now, with the reform to the ISSSTE Law, it is intended that the organization’s accredited be able to choose if their financing is granted in pesos and at a fixed rate or under the UMA modality; In addition, that those who have obtained a credit under the latter, they may request restructuring of their loan.

“With the reform, it will correspond solely and exclusively to the worker to choose whether the credit is granted in value of UMA or in pesos at the time the respective contract is signed… This process will be accompanied by the updating of institutional regulations and complementary programs, in order that the granting of credit is carried out with the least possible economic impact for the Fund,” the document states.

Specifically, the initiative proposes reforms to articles 6, 20, 178, 179, 180 and 185, in addition to seeking to add article 20 bis of the ISSSTE Law.