Why Real Estate Foreclosures Are Rare in Mexico

Foreclosure, by definition, is the legal procedure forThere are no search results found. No For-Sale listings
satisfying claims against a mortgagor in default whoavailable
has not redeemed the mortgage; satisfaction may beWell, that pretty well sums up your opportunities to
obtained from the proceeds of a forced sale of the"steal" a nice condo in a Mexican resort city such as
property.Puerto Vallarta! There are numerous reasons why
There are many reasons why mortgagors may fallforeclosures are rare or essentially nonexistent in
into default but historically it happens when theVallarta however the primary reason is that up until
mortgagor loses his job, loses his health, or for somejust recently, all purchases were done strictly on a
other reason is unable to make his mortgagecash basis. Mortgages are now available in Mexico but
payments in a timely manner.only with a substantial down payment. With a solid
Today, the majority of reasons for default are totallycredit history and income stream, one might be able to
different. Many recent mortgagors were able to obtainpurchase a property in Mexico with only 20% down,
loans with little or no credit history and little or nothinghowever most of the mortgages are with down
as a down payment. They received adjustable ratepayments approaching 50%. As you can imagine, it
mortgages and if they were ever able to afford theirtakes an awfully good reason to walk away from a
monthly payments, they were no longer able as soonproperty when you have that kind of investment in it!
as the interest rate increased and consequently theConsequently, with 98% of the properties owned
mortgagee was forced to foreclose on the buyer. Asoutright and the remaining 2% with well funded
the foreclosure rate in a given region started tomortgages, there are virtually no foreclosures in
increase, so did the availability of distressed propertyParadise!
sales. Of course, an increased volume of distressedBecause there are virtually no foreclosures in Mexico,
properties in the neighborhood resulted in a rapidthere has been no significant depreciation of values
depreciation of the neighboring properties. With thethere. That's not to say that there's not been a leveling
value of a given property well below its mortgageoff in prices or that the developers are not more
payoff balance, many mortgagors merely elect toinclined to "negotiate" today than they were a year
abandon their property and walk away from theirago. To the contrary, prices on newly constructed
mortgage; thus the mortgagee is forced to foreclosecondos have never been better than they are today
on these borrowers as well.and bargains can be found throughout the city. This is
This vicious circle of foreclosure events is currentlyto some degree due to over building during the past
occurring at an unprecedented rate in the US.ten year boom period and partly due to the reduction
Headlines such as "US Foreclosures Up 24 Percent inin prices of steel and other construction materials as
1st Quarter "," US Banks Step Up Home Foreclosureswell as the decrease in construction labor rates as the
"," Las Vegas Tops Foreclosure List", "Sun Belt StatesPeso recently devalued by 30% relative to the US
Lead Q1 U.S. Mortgage Foreclosures" andDollar.
"Foreclosures May Hit 1.5 Million in U.S. Housing Bust"For the reasons regarding foreclosures outlined above,
are seen in the news on a daily basis.you should never see your investment value plummet
Okay, know that we fully understand the cause forin resort destinations such as Vallarta as it has in many
and frequency of the recent foreclosures and knowingdesirable locations throughout the US. Because the
it's a buyer's market, perhaps, if you still have a littleNorth Americans have been recently hit so hard
money left over after the recent stock market sell off,financially combined with the fact that the local
you might be considering shopping for a forecloseddevelopers have overbuilt, it´s a true buyer's
property at a distressed sale price in a Mexican resortmarket on the Mexican Riviera. There are
city. If so, you might as well forget it; you'll not see a1,000´s of new condos currently on the market
foreclosure sign in Mexico!in PV and with interest rates at an all time low, the time
The following is taken verbatim from Condo.com, oneto buy will never be better. Any North Americans still
of the major websites dealing in worldwide condoholding cash will never find a better time or place to
sales:invest; besides, where else can you live in a climate
Mexico Foreclosures - is the best way to find freebetter than Hawaii, 2-4 hours from home, all the
foreclosures listings in Mexico. Find foreclosed condos,amenities of home, as many or more activities than at
foreclosed condos, foreclosure properties and otherhome, and at a fraction of the price? So, why wait;
foreclosure investment opportunities in Mexico. Searchcome on down and explore the possibilities; just don't
bank foreclosures, REO properties, preforeclosures,look for any foreclosure signs in Puerto Vallarta or any
HUD homes and more foreclosures in Mexico. Sorry!other resort destination in Mexico!