The trinidad Guardian / 1. T&T is currently in the midst of an economic contraction. What has been the effect, if any, on TTMF in the mortgage market? Have you observed any particular trends taking root?
Notwithstanding the economic contraction, we have been experiencing an expansion of our mortgage portfolio primarily as a result of the conversion of the Housing Development Corporation’s “license to occupy” arrangements, to mortgages.
Additionally, our focus on encouraging existing homeowners to utilise the equity in their property to restructure their high-cost debts will continue. This allows them the ability to release much needed income that was previously tied up in debt servicing thus better preparing them to manage their finances in these challenging economic times.
Further, TTMF’s business solution for monitoring the loan collections process has a built-in early warning system that allows for the tracking of potential delinquency. This is augmented by continuous scanning of the domestic and international markets to identify the factors that are likely to affect our customer base so we can develop and implement strategies accordingly.
In this regard, the impact of the downturn in the economy has not had a significant impact on our profitability as it could have, were we not so vigilant.
We have been recording consistent growth in our asset base and in our profitability.
As at September 30, 2017, our assets are recorded at $3.976 million which is $80 million in excess of the fiscal year 2016. This is expected to increase further during the last quarter of this year.
In the recent budget statement, the Minister of Finance announced incentives to small and large developers for the construction of new homes. These incentives will enhance the delivery of homes to our citizens while facilitating renewed economic activity in the construction sector. This is an opportunity to expand our relationships with our partners and for us to play a pivotal role in the execution of the government’s housing policy.
2. The property tax is likely to come on stream in the future. How does TTMF view the installation of the tax affecting the mortgage market broadly, and its own business more specifically?
Property tax is not a novel idea as prior to 2009, all property owners paid land and building taxes as a consequence of owning real estate in T&T.
Further, the government had signalled its intention to amend the legislation for some time and, as such, I believe most people are expecting it will be re-instituted but it is the amount of the tax they are concerned about. It is noteworthy that the payment of land and building taxes is actually in several countries globally as a means of increasing revenues.
The property tax is not expected to negatively impact the mortgage market as the benefits of homeownership far outweigh the annual tax charge. Some of these are: ? The net worth of homeowners increases as the real estate value appreciates over time. ? Home ownership provides stability and security for the entire family. ? There are tax benefits afforded to first-time homeowners for the first five years. These tax savings will offset some of the property tax costs.
Specifically for our customers, one of the benefits we offer is the collection and remittance of the land and building taxes to the relevant district revenue office. Since 2010, we have continued to collect payments towards these taxes which are being held in escrow on customers’ accounts. Should the tax be re-introduced, and upon the customers providing us with their revised assessment indicating the tax due on their property, we will undertake to make these payments on their behalf, thus taking the hassle out of the process for them. 3. What is the latest update on the proposed merger and stock market listing of the TTMF and the Home Mortgage Bank (HMB)?
TTMF is poised to play its part in this event in the financial landscape of T&T.
TTMF and HMB already share a common chairman of the board of directors.
Additionally, earlier this year we signed a memorandum of understanding (MOU) which is intended to encourage collaboration between the two companies and will involve the sharing of information, technical and administrative facilities and skills whilst maintaining the independence and integrity of both companies.
4. The TTMF operates in a very aggressive market space where it competes with commercial banks as well as other non-bank financial institutions for mortgages. Why should someone in the market for property
choose TTMF as their preferred mortgage provider?
TTMF’s vision involves being the lender of first choice for residential mortgages in T&T. We emphasise relationship building, follow-up and follow-through. Our staff guide customers and direct their steps to home ownership whether one is purchasing a home that is already built, constructing a new home or purchasing a house that requires repairs.
Additionally, the interest rate on our construction loans is currently the lowest in the market.
Our interest rates are the most stable in the industry and it is not subject to rate fluctuations that other mortgage providers may be impacted by. As such, monthly mortgage payments are predictable so our customers are better able to achieve their financial goals as they can be assured that the interest rate on their loan is not likely to increase over time.
Further, TTMF does not have penalties for lump sum payments or pre-payments, therefore our customers can manage their interest cost or repay their loan at any time before the end of the loan term.
Our products cover:
? Purchase or construction of residential property ? Repairs/renovations to existing or newly acquired properties ? Purchase of land for residential use; and ? Equity loans for debt consolidation; investment; education and medical expenses or for any other major expense. There is no limit on the amount we can lend and, as mentioned previously, we take the hassle out of home ownership by assisting customers in making payments to third parties eg WASA rates, land and building taxes, lease rent, insurance etc. And the rates on our group homeowners all risk insurance premium is one of the lowest in the market. 5. How does the TTMF view itself as a socially responsible corporate entity? The very nature of our business incorporates a social integration programme that is essential to our mandate. Thus, social investment in our customers, their families, their communities and the nation at large, is a day-to-day undertaking of our business. Our major corporate social responsibility initiative is our TTMF CAN Project (Corporate Assistance for the Needy). We currently have five branches: Arima, Chaguanas, Port-of-Spain, San Fernando and Tobago. In each of those locations there exist homes for displaced and orphaned children as well as the elderly who are in need of basic care. As a socially responsible company, TTMF identifies one home in each location on which a needs assessment is conducted. We collect canned goods to distribute to these homes. We repair the physical, psychological and emotional environment of each establishment thereby ensuring these homes are a safe and healthy haven. Corporate social responsibility for us is not a choice. It is an integral part of the development of our nation and it is the only way that we can fulfill our true mandate: shelter, safety, financial security and personal wealth.