Taking a major step forward in easing the process of buying and financing real estate in Mexico, the governors of Sonora and Baja California Norte will meet in February to announce their support for a series of land exchange and title reforms, being developed in cooperation with the government of Mexico by the National Law Center for Inter-American Free Trade in Tucson.

The governors of the two Mexican states will join with Arizona Gov. Janet Napolitano at Puerto Peñasco n or Rocky Point n to pledge their support for the final Securitization Project report. They are expected to announce their plan to be the first in Mexico to follow the steps outlined in the blueprint, designed to open the doors to U.S. investors and lenders.

Sponsored by the U.S. Trade Development Agency, the reform plan will standardize the Mexican real estate market, allowing mortgages, south of the border, to be bundled and traded like U.S. mortgages, opening the way to the leading American capital markets.

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Not only clearing the way for American buyers to more easily purchase property, the new rules will allow Mexicans to acquire conventional home mortgages for residential developments, especially housing for the nation’s growing population of potential low and middle income home buyers.

Once implement, “the rules will make the real estate purchasing process transparent,” said Boris Kozolchyk, National Law Center director. Providing recommendations for legal and registry reform and modernization, as well as standardization of real estate transaction information, he said, “Buyers and lenders will have easy access to titles and any liens on the property.”

Starting with Sonora, and extending to the rest of the country over the next several years, Mexican home buyers and real estate brokers will also be able to find a complete set of standardized transaction forms in one place, at the law center or through the Internet. This, alone, will transform real estate sales, making it into something far simpler and more predictable than the current complex process.

The process of developing the Securitization Project report and implementation blueprint “has been a lot more positive than we, ourselves, thought it would be,” Kozolchyk said. “We thought we’d find more legal and political problems than we’ve encountered.”

He said, “At this point, we can say With IMI Group, a Phoenix-based international mortgage bank, and other lenders already entering the Mexican real estate market, he said this is something Sonora and Baja Norte want to do, as quickly as possible. With the report and the accompanying blueprint, “They’ll be able to do it.”

Beyond Mexico, Kozolchyk said the law center is drafting trade and real estate legislation for members of the Central American Free Trade Agreement. Sponsored by the Inter-American Development Bank, the Tucson staff is working with a government-wide task force of Guatemalan officials to develop a law for secured transactions that will reform foreign sales and purchasing rules, as well as bankruptcy and e-commerce laws. They will also be consulting with the governments of Guatemala and Honduras on revised procedures for appraisal, financial statement and recording property titles.

With CAFTA, the nations of Central America “have to opportunity to open their countries to investment,” Kozolchyk said, “and for countries, such as Guatemala and Costa Rica, things are going forward at a good pace.”

He said, “We’re helping the CAFTA members to tap into bank credit. The ability to lend and a quick way to recover, in the same way as with a domestic lien under Article 9 of the Uniform Commercial Code, is the only they’ll be able to access the credit they need, and that’s the only way these countries will be able to benefit from the export opportunities offered by the trade agreement.”

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