By Eva Vázquez, Project Manager of Mejora Mutualista.
Insecurity, vandalism, abandonment, desolation, repossessions, high delinquency rates and capacity of 100% or higher are among the eligibility criteria for homes financed by BBVA Bancomer to benefit from the «Mejora Mutualista» (Mutual Improvement) initiative. Everybody Wins!
«Mejora Mutualista» is a comprehensive housing recovery model based on three aspects:
- Social Recovery
- Financial Recovery
- Physical Recovery
All based on a win–win approach. As customers begin complying with their restructured payment obligations for mortgages, water, property tax and maintenance, BBVA Bancomer Group will likewise invest money to improve the physical aspects of the homes and the community, ensuring better public services from local authorities.
Over the last 18 months we have worked on these three aspects in the field, in a program aimed at recovering the El Laurel residential area, located in Tijuana, Mexico. It was here in 2006 that we provided financing to make 1,055 families’ dreams of owning their own homes come true. However, just a couple of years later severe physical, social and financial deterioration had seen the community go into a negative spiral, which this pilot program aimed to reverse quickly. The residences that had been intended as medium income homes became social housing as a result of the deterioration.
This ground-breaking learning experience has already achieved its first successes. Best of all we are not alone. We have the firm backing of a committee convened especially to monitor the project, which includes representatives from the following departments: The Bancomer Foundation, Financial Literacy, Communication, DANF, Anida, Technology and Recovery. Each and every department has played a valuable part in the initiative’s success.
Our sphere of influence in El Laurel covers 30 condominium projects with 1,272 homes. The results so far are as follows:
Run by the company Kommúnitas in partnership with a local developer and architect, who oversee neighborhood organizations.
- A census used to identify physical and social needs.
- Training and establishment of 24 neighborhood committees.
- Organization of private contract awards.
So far we have restructured 210 loans out of a total of 507 customers. More and more customers are being included in the program, which has seen the delinquency rate slip from 50% in 2012 to 43% in 2013, while the amount charged to income in 2011 of 41 million pesos was down to 26 million pesos in 2012.
Thanks to support from the Non-Financial Assets Division, including real estate investors, housing sales were up by 100% in 2012 compared to 2011, with home prices already showing a recovery.
Infonavit also took part by restructuring its co-financing loans.
From the approved budget for physical improvements at El Laurel, the following investments have been made based on the demands of the community:
- 44 eco-containers for PET and aluminum recycling, operated by children.
- 20 condominiums with street lighting (860 homes), improving security.
- 103 homes boarded up to minimize vandalism, invasion and dirtiness.
- 9 boards erected to protect light meters.
- 10 walls built to improve security.
- 3 gates installed and/or repaired.
- 3 condominiums painted.
The support that the community has received from municipal authorities, thanks to our involvement, has been invaluable:
- Swearing-in of neighborhood committees
- Removal of 10 tons of trash during cleanups.
- 300 trees donated for gardens and parks.
- Street lighting repairs.
- Pavement repairs.
- Social events in the community
There is still much to do to complete this difficult transition. The project comes to an end in February 2014. The finished product will be a residential area self-managed by the community and the local authority. But most important of all, BBVA Bancomer will have safeguarded hopes of a better future for families in El Laurel.