Highclere Capital Lending, led by trade veterans Leon Dadoun and Paul Grewal, started taking form final summer season and is gearing as much as serve its first shoppers by the top of April.
Dadoun, Highclere’s CEO, brings 4 a long time of expertise in Canadian and Worldwide banking with a specialty in debt capital markets.
Equally, Grewal, who serves as President, brings experience from a protracted profession driving development and innovation, having beforehand led groups at Morcorp Capital, Road Capital Financial institution and FirstLine Mortgages.
Dadoun sees worldwide capital markets as a key differentiator for Highclere’s technique. Whereas many mid-market lenders depend on retail deposits or conventional securitization, Highclere is working to ascertain a extra liquid secondary marketplace for uninsured mortgages—one thing that has remained elusive in Canada
He tells Canadian Mortgage Tendencies that whereas international funding sources stay largely untapped by mid-market lenders, a lack of understanding and ambition has saved rivals from filling the hole—compounded by an over-reliance on retail deposits as the first funding supply for mid-level banks.
A brand new method to mid-market funding
Dadoun factors out one other key problem going through many mid-market lenders—their reliance on a broker-to-broker mannequin, which may put strain on profitability.
“When you have a look at a lot of the mid-market banks on the market, they’re actually working what is called a broker-to-broker mannequin,” he says. “They’re paying dealer commissions on the asset facet of the steadiness sheet, and dealer commissions on the liabilities facet of the steadiness sheet, and in order that squeezes margins and makes them considerably much less aggressive.”
Increasing past conventional funding sources is central to Highclere’s method. Whereas the corporate will first enter the market with insured and insurable mortgage merchandise by established financial institution aggregators, it’s already laying the groundwork for its Alt-A portfolio.
By actively selling Canada’s mortgage trade to overseas funds and funding sellers, Highclere has secured new financing channels to help this enlargement and, finally, a broader push into capital markets funding.
“There’s an inflection level between the distinction in the price of capital markets funding, and the distinction in price of brokerage deposits the place you’d fairly pay that delta,” provides Dadoun. “What Highclere loses in not having the ability to absorb retail deposits, it greater than good points from the power to function at a better leverage than any mid-level retail financial institution would.”
Two different key elements assist set Highclere aside—its dedication to integrating cutting-edge AI and machine studying into its adjudication course of, and its unique concentrate on nationwide brokerage partnerships, with no plans for direct-to-consumer choices.
Grewal’s expertise in partnership growth and technical integration performs an important position in each initiatives.
Leveraging AI for sooner approvals
Whereas AI can be integral to Highclere’s underwriting course of, the corporate has but to disclose the specifics of its fintech and AI partnerships.
These particulars are anticipated to be introduced quickly, however for now, Dadoun and Grewal inform us they firm’s focus stays on creating superior instruments to streamline the underwriting course of.
Highclere expects to roll out rule-based product pricing and decisioning instruments throughout the subsequent 12 months, aiming to automate key features of underwriting and credit score evaluation.
“The target is to remove the guide bottlenecks in mortgage underwriting,” says Grewal. “Automating doc processing, extracting the data brokers are attending to us in minutes versus manually doing it … there are capabilities proper now the place synthetic intelligence can scan recordsdata and catch inconsistencies earlier than they delay approvals.”
As for the broker-only centered method, it’s a technique that has performed nicely all through Grewal’s profession to date, emphasizing constant and dependable efficiency by an increasing community of strategic companions.
In contrast to some lenders the place brokers wrestle to attach with decision-makers, Highclere is dedicated to offering direct entry to its underwriting and credit score groups, guaranteeing quick turnarounds and a extra seamless expertise. It’s a longtime roadmap for achievement that the staff is seeking to replicate.
“The one method we’re going to win—and I’ve discovered this after 30 years within the enterprise—is that service and that relationship you present to that mortgage dealer will decide in case you get the subsequent deal,” notes Grewal.
“When combining that with our capital markets funding technique and product innovation, we imagine brokers can be a stronger place to supply extra selections to the shoppers,” he provides. “Our objective is to help mortgage brokers win and succeed.”
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Dylan Freeman-Grist Highclere Capital Lending Lender Leon Dadoun mortgage trade mortgage trade information Paul Grewal
Final modified: February 22, 2025
