Brazil's Caixa to cut mortgage lending amid funding dry-up, source says

lunes 7 de diciembre de 2015 15:29 GYT

SAO PAULO Dec 7 (Reuters) - State-controlled Caixa Econômica Federal, Brazil's largest mortgage lender, plans to further limit disbursements of home loans amid a severe reduction in outstanding savings deposits in Latin America's largest economy, a source with direct knowledge of the matter said on Monday.

In recent months, Caixa barred borrowers from taking more than one loan funded with savings deposits and lowered the amount it lends in the form of constant amortization mortgages. Whatever decision Caixa makes to limit disbursements of mortgage loans will aim at preserving the bank's depleting stock of savings deposits that are funneled into housing credit, the source said, without detailing what those moves could be.

Recent measures "will have not been enough and additional steps to restrict credit may be taken," said the source, who requested anonymity because deliberations are under way.

Further limits on mortgage financing underscore the headwinds facing Caixa as Brazil grapples with the deepest recession in a quarter century and unemployment spikes. Lending on the segment, which grew 40 percent annually between 2007 and 2014, might stall this year and next as rising interest rates weigh on real estate purchases.

Rising urban joblessness is forcing Brazilians to draw on their savings, which has in turn led to a drastic reduction in the pool of funds available for mortgage financing. Savings account withdrawals surpassed deposits by 58.4 billion reais ($15.5 billion) in the first 11 months, according to central bank data.

The total amount of mortgage loans funded with money from Brazil's Savings and Loans System, or SBPE, reached 67 billion reais in the year through October, the lowest since at least 2003. In the first 10 months, disbursements of SBPE loans slipped 28 percent, industry group Abecip said late last month.

($1 = 3.7681 Brazilian reais) (Reporting by Aluísio Alves; Editing by Guillermo Parra-Bernal and Bill Trott)