Which titan of business does Rajan Kaushal look up to?
Canadian Mortgage Professional’s Desmond Devoy sat down for a Q & A session with Rajan Kaushal, president of Tribecca Finance Corporation, about the state of the market, finding success, what sets Tribecca apart, and what’s ahead for 2024.
With more than two decades in the mortgage industry, through good times and bad, Tribecca has been there, right by its clients’ side.
From knowing the ins and outs of stress tests, to developing customized mortgage products, to utilizing the self-improvement words of the legendary Jack Welch, CMP caught up with Rajan Kaushal (pictured), president of Tribecca Finance Corporation in Toronto, for his take on the year ahead in the mortgage industry, the experience his company brings to the table, and where he sees housing stock availability and interest rates heading.
How is Tribecca approaching the current market and what is top of mind for you to ensure success in a challenging climate?
I founded Tribecca in 1999 and we have been lending for 25 years. Fortunately, that means we have been able to lend through multiple cycles and have the experience necessary to navigate through challenging economic conditions and different market climates.
In a challenging climate, we examine the supply-demand dynamics of real estate in our lending areas. Deep pricing corrections tend to occur when local real estate markets are significantly oversupplied. As long as supply and demand factors are kept in relative balance, deep price corrections can be avoided. Many factors can influence supply and demand, with the most prominent in today’s market being higher interest rates increasing the cost of borrowing. If we continue to see elevated policy rates from the Bank of Canada for an extended period of time, there is a potential concern that more homeowners will be forced to sell as they can no longer afford their mortgage payments, which would then increase supply. While some borrowers are stretched financially, many had to qualify under the stress test, which has provided them with the ability to service their mortgage at increased rates. The stress test has proven to be a saving grace in today’s market with the many rate increases.
Currently, our supply remains relatively low, and I do not think we will have an oversupply for many years to come because we do not have adequate new housing being built in line with population growth. Another very important factor we look at is the job market. Our unemployment rate remains reasonable at 5.8% and as long as people are working, they will do everything they can to make their mortgage payments.
How does Tribecca work with mortgage agents and brokers, and what sets you apart from competitors?
We are grateful to have so many long-lasting relationships with our broker partners. It is very important to us to provide exceptional service and always support our partners. We are very thankful to them for putting their trust in us.
We have excellent processes in place. This means we are responsive and have an underwriting process that provides a quick approval, decline, or request for more information. Once we provide a quote or commitment, we ensure that all the conditions are illustrated and our broker partners know we will honour our commitment. They greatly value this level of service and trust.
We have always been a commonsense lender and we want our broker partners to know that if the deal makes sense, we will get it done. When I was much younger, I read Jack Welch’s book and he espoused a philosophy at General Electric of pursuing improvement on a daily basis. I have employed the same philosophy at Tribecca, and I am proud of our team and our streamlined, efficient procedures. For rush deals, we are able to provide an approval within 2 hours and fund within 24 hours. Our ability to act quickly and decisively is very helpful to our broker partners and customers.
In line with our commonsense approach and collaborative nature, we are always developing products that provide options for our partners and benefit our customers. We offer many products including residential 1st mortgages, 2nd mortgages, and construction loans. An example of one of our products is a collateral bundle mortgage. If a customer owns a second property, we can provide a higher LTV on the subject property and collateralize the second property. We can also customize our mortgage to meet the needs of our customers. For example, we can offer a 2nd mortgage with a term to match the maturity date of the 1st mortgage so that our customer can refinance when their 1st mortgage matures. Another example is if there is sufficient equity, we can provide an interest reserve so that there are no monthly payments for up to 1 year.
We built Tribecca to meet the needs of our broker partners and customers, which means we’ve built a culture that prioritizes responsiveness, trust-building with our partners, efficient underwriting with quick approvals and treating each deal on its own merits.
Because we have been in business for over two decades, our partners know that we are here in good times and challenging times. They know that while there may be changes in policy in more difficult economic climates, we will continue lending and will always service them. When our broker partners work with us, they know that they are placing their client with a reputable lender.
Is there anything new and exciting that you have been working on, and what’s in store for the year ahead?
We are always striving to develop innovative mortgage products and provide solutions for our broker partners and customers. We’re looking forward to this year and have plans to onboard many new brokers and grow our portfolio. The sentiment is that interest rates will start to come down sometime this year, and if that happens, it will stimulate increased activity in the real estate and mortgage markets, increase consumer confidence, and most importantly, provide relief for many people.
