BajaNomad

Bank trust

Osprey - 2-23-2016 at 11:58 AM

This July we will pay our 21st annual payment for our fideicomiso on our little Mexican house in Baja Sur. It's usually about $500 U.S. per year and we consider that as just a small fee for being able to buy/hold property near the beach. In a previous thread about the trusts, the banks and Mexico's congress maybe voting to eliminate the trusts, there were many Nomads that opined that the banks would fight it because they wouldn't want to lose all that income for doing virtually nothing.

Compared to all our other expenses (we have only our SS to live on) it is chump change and I have always felt the banks see it that way too. Maybe that's why the 9 major banks (all are foreign now except for one or two) stopped renewing trusts and not accepting any new ones.

Today's Gringo Gazette newsletter report about the congress, the law, the lobbying says "The Banking lobby isn't going to let this one get by them because banks make way too much easy money charging the annual fee for the fideicomisos."

So it now strikes me that some of you out there are just as smart as Carrie Duncan and like her you know all about Mexican realty, banking and lobbying by foreign owned banks. Now tell us why the banks quit the fideicomiso business. After all, it was found money.

Udo - 2-23-2016 at 03:22 PM

I would also be interested in an answer, Jorge.

Osprey - 2-23-2016 at 06:48 PM

You go to the one or two remaining banks that still do Fides and beg them to "Do it again for another 30 years" for example.

micah202 - 2-23-2016 at 07:25 PM

Quote: Originally posted by Osprey  
You go to the one or two remaining banks that still do Fides and beg them to "Do it again for another 30 years" for example.



...and if they say no? :?:

BigBearRider - 2-23-2016 at 07:45 PM

Then you start a corporation.

Pescador - 2-23-2016 at 07:59 PM

What do you do in the "real world" when one option closes, you find a way to do something different. It was a stupid system on its setup, but that is about normal for when the government tries to get involved in things that are better left to the 'Free Enterprise System". I knew this was a weird situation, so it was easier to establish citizenship and own the property outright, but others have attacked it in other ways. There is not necessarily a right way, but a way that works for you.

Paulclark - 2-23-2016 at 08:05 PM

Upon expiration of your trust, which is usually 50 years(old trusts 30 years) you will need to renew with your existing bank or apply to a new bank, for a new trust. There are lots of banks willing and happy to create a new trust (fideicomiso) and it is not difficult. Lots of reputable agencies able to help you.

bajaguy - 2-23-2016 at 08:12 PM

Hopefully the bank trusts will die a quick death and we all will be able to get a clear title

MitchMan - 2-24-2016 at 08:13 AM

Leaving the fideicomiso in the hands of private businesses was a big mistake and gamble as businesses, for the greater most part, tend to fail completely eventually, are replete with inefficiencies, and only motivated by self interest, not the interest of their customers. Witness the fact that banks do absolutely nothing for their arbitrarily set annual fee...how does that make sense? That is just another unfounded, economy-damaging transfer of wealth.

If it ever comes to pass that we foreigners can own real estate in fee simple title, that would be great...and fair. Fairness, something businesses do not concern themselves with, their only motivation is maximizing profit by whatever means necessary so long as they do not get caught for any wrongdoing or so long as an action by them does not damage their reputation.

Remember, if there is no fido renewal, the value of your property will go down as the fido expiration date gets closer since 1) the size of your buying market is being reduced, and, 2)transferring your fido to another foreigner will only have a limited life for that new owner.

Creating a corporation to continue your ownership of your fido purchased property will cost thousands (just a few thousand) as you will have to pay for filings to create the corp and then pay a few thousand in fees and taxes to transfer title to the corp properly. Also, on a perpetual basis, you have to pay an accountant to file monthly and annually to do the online governmental reporting and maintain a cursory set of books (general ledger) as the corp is a legal entity and that's what all corps have to do. That will most likely cost more annually than a fido fee. Further, if you are a USA citizen, you will have to remember to file a couple of disclosure forms annually with your US tax return or suffer a big penalty.

Side note, corps that are expected to have no business activity nor changes in any balance sheet accounts can get a filing deferment for 2-1/2 years. My accounting fees to file for the deferment cost as much as the regular filings would have cost for the 2-1/2 years...therefore no cost savings in my case. I won't even get into the requirements for banking purposes related to spending money "on any corp matters" such as a home property improvement that costs over $2,000 pesos.

Technically, pursuant to Mexican law, a corporation held house is not to be used for strictly personal purposes such as a personal residence. But, like many things in Mexico, what the law is and what one does are often two different things. But, it is a law that you should be aware of if you are going to do this corporation thing.

Fee simple title would be the best circumstance. It would eliminate the fido fee and the maintenance cost of a corporation. Hope the legislation passes.

I have trouble believing that banks would let fido fee freebie money go by the wayside without so much as a whimper.

The only thing I can think of is that the meager accounting that the collecting of their annual fee requires, is a pain in the neck to them. So far as I have noticed, my bank is horrible at it and I have to make sure that I keep good records and copies of my payments and have had to prove to them that I have been making all my payments. Businesses are so inefficient and wasteful.

[Edited on 2-24-2016 by MitchMan]

Russ - 2-24-2016 at 08:38 AM

I just was able to get the bank holding my fido to update my account. I had tried a couple time a year to get an update but without any luck. Here's what they sent me last week. OUCH !

SFandH - 2-24-2016 at 08:56 AM

I've searched for this and haven't been able to find any news reports, but I remember reading during the last time a couple years ago when a bill was in the Mexican legislature to eliminate the restricted zone there was substantial opposition from Mexican citizens.

The bill passed in the lower house (Chamber of Deputies) but died in the upper house (Senate). It was not brought to a vote in the Senate, maybe because of popular opposition.

Can anyone confirm that this is an unpopular idea with Mexican citizens?



[Edited on 2-24-2016 by SFandH]

Osprey - 2-24-2016 at 09:23 AM

Mitch Man, what's your b-tch man? You want a place in Mexico or not? If you give a dance you gotta pay the band. No fees like that in the good old U.S. of A but you knew that didn't ya?

I told you before, you don't need to have what you like, you need to like what you have. Can't do that? Then you're lost, man.

BajaGringo - 2-24-2016 at 11:02 AM

Quote: Originally posted by SFandH  
I've searched for this and haven't been able to find any news reports, but I remember reading during the last time a couple years ago when a bill was in the Mexican legislature to eliminate the restricted zone there was substantial opposition from Mexican citizens.

The bill passed in the lower house (Chamber of Deputies) but died in the upper house (Senate). It was not brought to a vote in the Senate, maybe because of popular opposition.

Can anyone confirm that this is an unpopular idea with Mexican citizens?



The majority of Mexican really don't care either way however there is a loud minority that is led by Lopez Obrador (Morena) who made the most noise against this. They are same group that is vocally opposed to the new energy reforms, opening up Pemex to foreign investment and CFE to use private contractors. Some see that as simply Mexicans wanting to hold onto what they consider sovereign assets. Close friends who are political insiders tell me they are mainly concerned with protecting the strong CFE and Pemex labor unions whose employees are largely loyal to AMLO / Morena.

The foreign ownership of coastal and border regions issue was just another topic they could use as political leverage. My friends tell me that they predict the issue to be brought again for a vote when we see the price of oil increase back above $50/bbl. They also predict it will pass in the senate this time around.

Stay tuned...

BajaTed - 2-24-2016 at 11:04 AM

The Fidecomiso are truly obsolete as a legal doc.
For example there is a clause in our trust that states we cannot call the USMC if we are in dispute with the trust:rolleyes:

Will the Mexican constitution ever be changed to allow title to held by foreigners in the coastal federal zones?

I've heard that lots of $$$ is flowing into real estate in Costa Rica, Belize & Panama due to ownership rights as compared to the Mexico? Will this be a driver for change?