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Supporting clients with global needs

Supporting clients with global needs. Introduction. BBVA USA BBVA BANCOMER. New Product. Potential Business Services to Provide Advantages Characteristics Requirements Operational Flow Chart. Population. 61,673,146. % of Population in the US. 22%. Increase in Population . 44%.

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Supporting clients with global needs

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  1. Supporting clients with global needs

  2. Introduction • BBVA USA • BBVA BANCOMER New Product • Potential Business • Services to Provide • Advantages • Characteristics • Requirements • Operational Flow Chart

  3. Population 61,673,146 % of Population in the US 22% Increase in Population 44% Expected Increase 7% HouseHold 21,475,522 Income per Capita 19,966 % Hispanics 33% 2nd Generation 13% Introduction The Hispanic market on the border states in the United States, represent a huge opportunity for business BBVA Bancomer is the financial institution leader in Mexico Focusing on the strength of the Mexican borders, in 2005 the Group BBVA decided to participate in the North American market, through an acquisition of two banks: Valley Bank (today known as BBVA Bancomer USA) in CA and Laredo National Bank in TX

  4. BBVA USA groups 5 business units; 3 Banking Institutions Laredo National Bank(*) American Bank specializing in international and commercial banking BBVA Bancomer USA Extension Bank from Bancomer México primarily focusing on the 1st generation of immigrants BBVA Puerto Rico 6th Bank in Puerto Rico, specializing in financing mortgages, commercial and consumer products and 2 Non Banking Institutions: BBVA Finanzia USA Credit card and consumer financing provider Bancomer Transfer Services Leader in Money transfers to Mexico and LatinAmerica; a specialist in MSB (*) In the process of adopting BBVA global image

  5. Laredo National Bank, is the legal entity that will provide the financing: • LNB is a bank founded in 1892, it’s a bank that is regulated by the OCC. • As a national bank, LNB has experience in lending all over the United States. • With the 95 branches in TX and CA, BBVA USA can service customers from all over the USA and Canada • LNB has the experience of financing properties in Mexico for American residents. • 95% of the employees are bilingual(100% in BBVA Bancomer USA).

  6. Introduction • BBVA USA • BBVA BANCOMER New Product • Potential Business • Services to Provide • Advantages • Characteristics • Requirements • Operational Flow Chart

  7. BBVA Bancomer, supports the sales process: • BBVA Bancomer the leader financial institution in México with national presence through 1,700 branches. • In January 2005, BBVA Bancomer acquired the biggest mortgage company in Mexico, Hipotecaria Nacional, creating the mortgage division for the institution • With 10 years of experience in the market, Hipotecaria Nacional, has provided approximately 120,000 individual credits • Maintains business relationships with 895 Developers in Mexico • Hipotecaria Nacional has a business network with 110 branches distributed within 10 divisions

  8. Divisional Occidente Guadalajara I, Guadalajara II, Atotonilco, Cd. Guzmán, Colima, Lázaro Cárdenas, La Piedad, Manzanillo, Tecomán, Morelia, Tepic, Puerto Vallarta, Uruapan, Zamora, Zapopan, Guadalajara III, Ixtapa COVERAGE Divisional Metroperiférica Acapulco, Cuernavaca, Iguala, Pachuca, Toluca, Tula Divisional Metro-Centro México, Coacalco, Del Valle, Vallejo, Los Reyes, Santa Mónica, Satélite, Iztapalapa Divisional Sureste Cancún, Chetumal, Campeche, Mérida, Playa del Carmen, Villahermosa, Ciudad del Carmen, San Cristobal de las Casa,Tapachula, Tuxtla Gutiérrez Divisional Golfo Cholula, Coatzacoalcos, Córdoba, Jalapa, orizaba, Puebla I, Tehuacán, Tlaxcala, Tuxtepec, Tuxpan, Veracruz, Huajapan de León, Juchitán de Zaragoza, Oaxaca, Poza Rica

  9. Introduction • BBVA USA • BBVA BANCOMER New Product • Potential Business • Services to Provide • Advantages • Characteristics • Requirements • Operational Flow Chart

  10. New Product POTENTIAL BUSINESS • Potential market is 41 million of US and Canadian Citizens with high income and future retirees (Baby boomers). • It is estimated that in the next 7 years there will be a demand for 10,000 houses for retirees • In April, 2005, the market in the restricted zone showed an inventory of properties estimated at $5.3mmd • Statistics show an average of 473 properties sales per month Bancomer guarantees the transaction through the issuance of a Trust (fideicomiso)

  11. Introduction • BBVA USA • BBVA BANCOMER New Product • Potential Business • Services to Provide • Advantages • Characteristics • Requirements • Operational Flow Chart

  12. New Product SERVICES TO PROVIDE With the synergies between BBVA USA and BBVA Bancomer México we have the opportunity of launch, “Your Dream Home in Mexico” • A package has been created with all necessary services for US and Canadian citizens to be able to purchase a dream home in Mexico’s restricted zones • The loan is underwritten and funded by LNB • Services provided to the developers are given by Hipotecaria Nacional in Mexico and includes: • Training to the Developers sales force • Appraisals • SRE Permits • Trust Issuance This product has been created at the request of Real Estate Brokers and Developers

  13. Introduction • BBVA USA • BBVA BANCOMER New Product • Potential Business • Services to Provide • Advantages • Characteristics • Requirements • Operational Flow Chart

  14. New Product DEVELOPER ADVANTAGES • New tool to increase their sales • Competitive product in the USA and Canadian mortgage market • Customer underwritten under the US credit guidelines • Bilingual representative in Mexico • All Loan and Permit Processing • Immediate payment through electronic transfers (Pesos/Dollars) • Support of the leader financial institution in Mexico

  15. Introduction • BBVA USA • BBVA BANCOMER New Product • Potential Business • Services to Provide • Advantages • Characteristics • Requirements • Operational Flow Chart

  16. New Product PRODUCT CHARACTERISTICS • Credit in Dollars • Minimum loan amount: $100,000 USD. • Maximum LTV 75%. • Terms: 15, 20 and 25 years. • Tree interest rates programs. • Fixed interest rate • Adjusable rate mortgage 3/1. (Fixed interest rate for first 3 years, and adjustable for the rest of the term) • Adjusable rate mortgage 5/1. (Fixed interest rate for the first 5 years, and adjustable for the rest of the term) • No prepayment penalty • Formalizing through a Trust * Interest rate based on Libor plus margin

  17. New Product Purposes of the Loan The loan can be used with anyone of the next purposes: 1. Vacation home acquisition 2. House acquisition for investment purpose 3. Cash out over previous acquiered properties in Mexico Any purpose will have the same loan characteristics * Interest rate based on Libor plus margin

  18. New product Interest rates comparatives SCORE ARM 3/1 ARM 5/1 FIX MAS DE 701 PTS 7.500% 8.000% 9.000% 686 A 700 PTS 7.625% 8.125% 9.125% 671 A 685 PTS 7.750% 8.250% 9.250% 650 A 670 PTS 7.875% 8.375% 9.375% Rates posted for 25 Years • 20 Year Term - subtract .250 from listed rate above • 15 Year Term - subtract .500 from listed rate above • ARM programs, have an anual increase of 2% maximum; and a total increase of 6% (based in the origial rate) * RATES SUBJECT TO CHANGE DAILY WITHOUT PRIOR NOTIFICATION

  19. New product Example FIX ARM 5/1 ARM 3/1 * Sales Price $ 300,000.00 $ 300,000.00 $ 300,000.00 * Down Payment $ 90,000.00 $ 90,000.00 $ 90,000.00 * Loan Amount $ 210,000.00 $ 210,000.00 $ 210,000.00 * Interest rate 8.50% 8.00% 7.50% * Term 15 15 15 * Monthly payment $ 2,067.95 $ 2,006.87 $ 1,946.73 * Trust $ 62.29 $ 62.29 $ 62.29 * Insurance $ 72.45 $ 72.45 $ 72.45 * Monthly payment $ 2,202.69 $ 2,141.61 $ 2,081.47 * Closing costs (estimated), Entre 6% Entre 6% Entre 6% y y y 8% 8% 8% origination and Trust fee

  20. Introduction • BBVA USA • BBVA BANCOMER New Product • Potential Business • Services to Provide • Advantages • Characteristics • Requirements • Operational Flow Chart

  21. New Product REQUIREMENTS • Credit Score: 650 Pts. (Fico Score). • Minimum Age: 18 años. • Hazard Insurance • Annual maintenance Trust Fees and Insurance Premium are included in the monthly payment through and Escrow Account

  22. New Product REQUIRED DOCUMENTATION • Signed Application • Picture ID (Passport and Driver License) • Income Tax Returns with W2’s for the last 2 years • Paystubs for the recent month • Bank Statements for the last 2 months

  23. New Product REQUIRED DOCUMENTATION FOR APPRAISAL • Property Deed • Condominium Regime (if applicable) • Articles of Incorporation • Power of Attorney – with Identification • Proof of Address • R.F.C. • Plan of Property identifying the distance from the restricted zone

  24. Introduction • BBVA USA • BBVA BANCOMER New Product • Potential Business • Services to Provide • Advantages • Characteristics • Requirements • Operational Flow Chart

  25. FLOW CHART Developer/Realtor meets with customer while vacationing in Mexico and signs a sales contract Requests additional information and reviews file a 2nd time LNB underwrites the file of customer No Yes Approved? Approved Yes Developer/Realtor sends file to H.N. representative; Expected time for prequalification is 48 hours once LNB receives signed application No LNB contacts customer with interest rate and requests opening of checking account LNB mails Denial letter explaining the reasons for denial and advises HN representative Customer deposits funds at LNB for SRE permit, annual fee and estabishment of Trust and appraisal. H.N. representative sends file to Laredo National Bank. 1

  26. FLOW CHART 1 HN representative receives the SRE permit and sends instructions to the Notary LNB receives signed documents and sends loan proceeds via electronically to Trust-Bancomer. LNB requests appraisal and Trust establishment to a H.N. representative HN representative schedules closing time with Developer, customer and Trust to sign at Notary HN representative coordinates the validation of the loan and closing date with customer to sign the Loan Agreement, Note, & Hazard Insurance, 24 hours in advance of signing the Trust (fideicomiso) HN representative follows up with the appraisal and requests the SRE permit (The permit is taking approximately 16 days) No Funds are sent to Developer via electronically or by check at least within 24 hours after the Trust (fideicomiso) has been signed Once Loan Agreement and Pagare are signed will send via email copies of Loan Agreement, Note, Hazard Insurance Binder & copy of unsigned Trust to LNB Once appraisal received, LNB prepares the loan agreement, Pagare, Notary instructions and sends to HN representative All servicing of the loan will be handled by LNB in the United States

  27. Expected processing time from application received and approved by LNB through closing is approximately 30 days

  28. This product is already available. LNB and Hipotecaria Nacional are ready and pleased to attend you.

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