Reverse Mortgage DefinitionDefinition of reverse mortgage
Sovereign-backed Trinidad and Tobago banking focuses on key political goals | Trinidad & Tobago 2015
Trinidad and Tobago have a number of characteristics that are beneficial to the growth of global finance, as outlined in the World Economic Forum's Global Competitiveness Report 2014-15. Despite being the number 89 out of 144 competitors rated worldwide, T&T came number 38 for its macro-economic performance, number 52 for infrastructures and finance, number 69 for corporate performance and number 77 for higher learning.
With a share of around 16% of GNP, T&T's broad-based finance service activities (including insurances and property services) are the second biggest economic activity after the oil industries, which generate around 38% of value added. T&T's major T&T insurers, operating throughout the Caribbean, have economies of scales.
Another strong point of the industry is that it comprises four specialised government-backed institutes that concentrate on specific financial industry policies. The three T&T Mortgage Financing Company (TTMF), Home Mortgage Bank Group ( "HMB") and Agricultural Development Bank of T&T ("ADB") were selected by the Federal Reserve as relevant to the system.
Our export import bank Bank of T&T (EXIMBANK) is the second. The TTMF is an agent that offers mortgage loans to first-time buyers. It is 51% National Insurance Board of T&T (NIBTT), the main body of the welfare system, and 49% National Insurance Board of the State. Headquartered in Port of Spain, TTMF has offices in Arima, Chaguanas, San Fernando and Tobago.
The TTMF also offers mortgage protection in connection with Cuna Caribbean Insurances, which guarantee reimbursement of the mortgage in the case of the death of a mortgage holder. TTMF provided 6% interest rates in 2013. During the year, the balance sheet increased from 3.5 billion TT$ (539.7 million $) to 3.7 billion TT$ (570.5 million $).
This includes an expansion of the mortgage portfolios from TT$ 3 billion ($ 462.6 million) to TT$ 3.2 billion ($ 493.4 million). The TTMF finances its operations mainly by issuing long-term debt and by selling mortgage loans in the aftermarket. The HMB was founded in October 1986 in reaction to a recent International Finance Corporation (IFC) survey that found an urgent lack of accessible middle-income homes.
IFC also noted that the mortgage volume was well below the level of possible future mortgage borrowing. However, the suggested approach was to create an organized mortgage aftermarket. The HMB became the most important institute in T&T's aftermarket. HMB's tasks also include "mobilising energy saving for investments in residential construction, supporting[the] emergence of a system of financing properties and housing" and promoting "capital markets growth".
Mortgage purchase by HMB from TTMF and commercial bank. Credits are also granted, which make up around 40% of the entire credit portfolio. HMB, as a lender, provides full coverage of the mortgage credit value, with an in-house authorization threshold of $5 million TT$ ($771,000). Mortgage lending will take place through the Port of Spain headquarters, although HMB will open an extra branch in Chaguanas.
She has a clear bias towards mortgage loans, housing loans, property purchases, building, equity finance and apartment buildings. MMB also offers reverse mortgage services. HMB's mortgage book increased by TT$ 386 million ($ 59.5 million) in 2014; TT$ 123 million ($ 19 million) came from the original mortgage book and the balance was acquired in the collateral book.
The balance sheet totals at year-end were TT$ 2.3 billion ($ 354.7 million). Receivables include $514 million TT$ ($79 million) and financial investments of $1.7 billion TT$ ($262.1 million), of which $1 billion TT$ ($154.2 million) in shares and $645 million TT$ ($99.5 million) in bonds and notes that have been originated by the federal and state governments.
Refinancing borrowings totaled TT$ 1.1 billion ($ 169.6 million), while equity positions totaled TT$ 474 million ($ 73.1 million). T&T Securities and Exchange Commission (TTSEC) and are considered eligible investments for the legal deposit and legal fund of insurers. Our products are appealing to business customers and property insurers.
HMB has been issuing mortgage guarantee fund units since 1999. This is a mortgage obligation that can be tailored to the needs of the investor in respect of interest rate and redemption characteristics. Garanteed mortgage fund units give the investor the opportunity to keep mortgage-backed securities without having to commit to a single mortgage for the long run.
Lastly, since December 2001 HMB has been managing the Mortgage Participation Funds (MPF), an investment funds secured by mortgage loans and incorporated with TTSEC. The inflow into the MPF is covered by the mortgage transfers from HMB's assets. HMB guarantees the floating yield (monthly and 1.35% at the date of writing), which is the difference between this instalment and the interest payment made by the mortgage debtors.
HMB's mortgage portfolio, which includes those that have been assigned to MPF, amounts to approximately TT$ 1 billion ($ 154.2 million) according to Ramlogan. HMB's 2013 business year noted that PwC had been mandated to assess the feasibility of reorganising the property and operation of TTMF and HMB. NIBTTT, which is the dominant stockholder in TTMF and HMB, will determine whether and on what conditions such a deal will take place.
ADB is a classical agro developing school. Premier Wendy Samsundar Beharry, ADB's Head of Operations, said to OBG that the institution's definition of farming company generally covers all operations associated with "transporting foods from the farmyard to the plate". A loan can be granted for working capitals or investments in capitals (i.e. real estate and/or plant).
Currently, it is financed from reserves and by the State, which holds 97% of the shares in the EIB and is 100% owned by the EIB. In 1997, the country's only officially recognized ECA, Expimbank, was founded from T&T Transfer Insurance Company, founded in 1973. Expimbank finances its business activities through credits from business banking institutions and revenue reserves.
Receivables due and payable for payment by the EXIMBANK are warranted by the governments to which the agencies belong. In all, there are four product lines offered by EXIMBANK: post-shipment funding (factoring of bills for goods or provision of goods and related financial support activities to clients for export), pre-shipment funding (a short-term pre-export stock funding facility), buyer credits (financing of capital investment and/or refurbishment of premises) and trade loan protection (protection against loss of goods or provision of financial support to overseas buyers).
EXIMBANK's non-audited financial statements showed a balance sheet totalling TT$402 million ($62 million) and principal positions of TT$192 million ($29.6 million) at the end of June 2014.