Fovissste, on alert for inflation in 2023; will seek to “punish” UMA to mitigate impact on credits

Although the Issste Housing Fund (Fovissste) has been working for some time to adopt a scheme of credits mortgages calculated in pesos, the truth is that most of the financing of its portfolio is governed by the economic benchmark called Measurement and Updating Unit (UMA).

This means that every first of February, the financing granted by the institution suffer from considerable increases in terms of debt and the amount of monthly payment.

In 2022, the National Institute of Statistics and Geography (INEGI) determined that the UMA would have an increase of 7.36% compared to the previous year, which directly impacted the pockets of the beneficiaries.

For 2023, Fovissste has turned on red lights due to the possible increases that its borrowers will suffer, especially due to the inflationary phenomenon going through the national economy.

“Our credits are in UMAs and yes, we are very worried about what is going to happen with the inflation next February”, commented the executive member of Fovissste, César Buenrostro Moreno.
In this sense, he anticipated that the Fovissste performs an analysis of its financial capacity so as not to update the UMA to 100% next year.

“We still don’t know whether to punish it by 5%, 10% or more, we need to see how much we could endure so that the blow is less towards the accredited”, he confirmed in an interview.

Likewise, he stressed that the debt of the successors has been increasing given the relationship of the credits with the worker’s basic salary, which practically does not grow.

“That is no longer the responsibility of the Fund, but if the government could somehow increase the salary, there would not be so much difference,” said the official.

Scheme would start in January

Buenrostro Moreno explained that in Fovissste there are two relevant pending issues, one of them is the reconversion of credits in UMAS to pesos.

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However, he shared that the Fund does not have sufficient capacity to support the modification to pesos of the 919,000 financing that currently exist in the portfolio, so the transition will be made by segments, starting with the pensioner population.

“We already have a reconversion program, which could be launched in January. Although it would be impossible to modify all the creditsbecause the fund breaks, we are thinking of starting with those who have credits more deteriorated,” he said.

According to data from the National Baking and Stock CommissionAs of last October, the Fund had a delinquency rate of 7.25 percent.

On the other hand, the official reported that there is a backlog in terms of origination testimonies, which has been worked on hand in hand with the National Association of Mexican Notaries.

From December 2021 to date, Fovissste reduced these procedures from 86,000 testimonies to 29,000 pending.

“It is important to maintain close coordination with business leaders to advance in the objective of placing rights holders and accredited persons at the center of decision-making,” added Buenrostro Moreno.