Episode Transcript
[00:00:00] Speaker A: Hello and welcome to the season finale of the Mic'd Up Show. What started as a journey of can two people continue to do a podcast and go longer than where most people fail? We have now become the number one place for the lending industry. Anybody who wants to get into mortgage, fintech, prop tech find out about what they should do in their home buying journey. If they want to start at the top, it starts on the national conference scene and not everybody can afford to go out there and certainly not everybody feels comfortable going out there. So the number one place to go weekly Thursdays at 2pm Eastern and 11am Pacific time we film live on LinkedIn so our audiences can post questions and then we actually post their questions on our show to give them exposure.
Two weeks ago our show was watched over 2000 times on LinkedIn live and replay. Not to mention the thousands of listens we get across the podcast. So if you're listening on YouTube or Apple podcast or many of the others that get named, including Spotify, if you guys could give us a like or comment, we would really appreciate it. And we constantly talk about advocacy because the mortgage industry, which has been for years a very cyclical industry of ups and downs with a lot of potential for disruption because it's a trillion dollar industry and trillions and then the amount of money people spend after yet nobody has really come in. And if you follow our thoughts, data is probably the reason more are going to try. But the reason many don't is because along with it is the cyclical regulation that occurs in the mortgage industry. Some would argue an IMB is probably the most regulated institution out there. And then some would argue with Steven's background that the banks are the most regulated. But either way you flip the coin. The lending industry has such regulation. It is the one thing keeping the Amazons of the world out for now. And in order for that to work, advocacy needs a calling and they need an ambassador. So I titled him based on a couple words in the profile of the Mortgage Bankers Association. The ambassador of advocacy, Stephen plus Saints is on here with us.
And Steven, I think we'll start with. Obviously you became chairman of Mortgage Action alliance and fifty hundred thousand people there, but when did you first, maybe even before president of the Oklahoma mba, When did you first find yourself doing something that you would call advocacy that your peers in the industry weren't doing?
[00:02:55] Speaker B: Mike, that's a great question. Thanks for having me on the show too. And thanks for all you're doing to continue to get the messages out to so many people. Just as you, as you talked about to who may not have access or may not realize they have access. So great job, keep up that good work because we need everybody's voice involved in this advocacy effort.
That's an easy question to answer. I was very, very fortunate and privileged to be part of the MBA Future Leaders program way back in 1998. That was the second class that the MBA Future Leaders had. And starting with my bosses at the time and my company at the time, they supported me as a young mortgage banker to be able to, to get more involved. And that MBA Future Leaders experience is what really launched me into a interest beyond just my day to day job, which was my number one priority. But understanding, as you mentioned, all the other things that make our industry go around in understanding that, hey, it's actually the participants in the industry that help make sure that we have policy that makes sense, that our interests are protected.
It became very abundantly clear that we have to use our voice and we have to use our voice whether it's with our folks at a state and local level or at a national level, all the way up to Congress and beyond. And so again, that MBA Future Leaders program is really the thing that really kick started me into, wow, there's an opportunity to help make a difference beyond what I do on my day to day basis at my company because our industry needs active participation. And I was very fortunate that the NBA created Future Leaders because they also started planning for the next generation. And future leaders are still going here, what, 27 years, 28 years later, they're still going strong. So that was the thing that really accelerated it and continuing to have the ongoing support after that from the companies I worked for, from the leaders that I had supporting me in my endeavors, and certainly the NBA and the many peers and colleagues that I met along the way that helped me on my journey. I mean it's, it's, it's addictive. Once you get involved and you can find that you can help make a difference and then you can start talking about it and get other people involved. That's, that's the fun part and that's very rewarding.
[00:05:18] Speaker A: It certainly is addictive. I just came back from a conference where Future Leaders was brought up. It might have started the way you described it, as the next generation, but I've heard. What is your insight on nowadays? They were joking that don't assume a certain age with Future Leaders program, meaning they said it's not all young people.
[00:05:43] Speaker B: Even in my class in 98, way back when, when we were Printing Out Truth and Lenny's on Dot Matrix Printers.
We had several members of that class that were seasoned veterans, if I were to guess, in their 50s and well into their 50s and maybe, maybe older. So I think that's a great observation, Michael, is that this isn't just trying to replace the old quote with the new, but it is taking people to the next level of their journey, whether you're 25 or 55. So I think that's an absolute spot on observation, Stephen.
[00:06:19] Speaker C: It's interesting that you mentioned that and only because you're currently, you know, you're, you're in leadership and have been in leadership not only for your, the industry, but also at the regional level for banking in Oklahoma. What does advocacy mean to the originators that are in Oklahoma? What is when you advocate for them regionally and then you also advocate for them through the Mortgage Action alliance on a national basis, what does advocacy mean? I've talked to four originators, two of them actually who were in the Midwest, one in Texas, one in Kansas. And advocacy means two different things to them. Can you help explain to originators actually, what does advocacy mean to you so that, that they could get a greater understanding of that?
[00:07:05] Speaker B: Yeah, well, I've generally used the same line for a lot of years. It's, it's about protecting your livelihood. Our livelihood, which is the mortgage banking industry, whether you're making a residential mortgages, whether you're servicing loans, whether you're on the commercial side, it's our livelihood.
It's why we go to work, it's whatever fuels us, whether it's to take care of our family, take care of our communities, whether it's a. So it's truly, there's no better way to protect your own interests than by getting involved. I remember years ago the National Advocacy Conference, which I've had the privilege to go to many times over the years going back to 1998.
I remember one year we were kind of light on, we were light on our delegation from Oklahoma and I made a comment to some, a few people, I said, well, just remember if I'm the only one going, I'm going to be speaking for you guys, if I'm the only voice. So the more voices we have and the wider difference, you know, different voices we have, the better, representing banks, credit unions, independents, whoever it might be. So again, it's all Michael, great question, but it's all about, hey, it's protecting your livelihood. I'm not sure there's any better sell than that.
[00:08:20] Speaker C: Do you think that there's when you protect the livelihood of the originator, does that also make the borrower experience better as a result? Because you're trying, you're not only advocating and making the livelihood for the, for the parent company, you're also advocating for the livelihood of the originator. And so the direct result in creating a better advocating not only for the, for the, for the parent company and also for the originator, ultimately that should lead into a better borrower experience as a result. Can, can you speak to that a little bit when it comes to advocating for the originator, either in compensation or in services that the, that the MBA or, or, or the, or your regional MBA might add might talk about so that the experience for the originator is better for the borrower?
[00:09:10] Speaker B: Well, I can speak in fairly broad terms on that, actually. That's a really, really good question and very, very thoughtful one. Obviously, coming off of the mortgage crisis years ago now, the pendulum swung, as we know, pretty far and we've been saddled with regulation and oversight and blah, blah, blah, all meant to protect consumers. But arguably it just, it created rising costs to consumers and more complexities to consumers. Not all things were, not all things were bad, though there are some good things that did come out of it. And that's why that's a slippery slope when we talk about undoing the CFPB and so forth. But that being said, the NBA and our industry in general still has to work on a regular basis to push back on overreaching ideas, whether it's from FHFA through the GSEs that in the end create a prohibitive experience for the borrowers, whether it's through true costs or through the lending experience, whatever it may be. And you know, there's, there's, there's a number of them that, you know, we continue to fight and, and prepare ourselves today to take again, let lenders do the lending. Let us, we're highly regulated as it start by ourselves. And so again, if we can streamline some of these regulatory levels, in the end that's going to, the consumers are going to benefit from that.
[00:10:37] Speaker A: Looking at your background, Steven, you've been in banks, two of the largest banks in Oklahoma, I guess you could say one of the largest banks and then one of the largest mortgage companies that also is a bank in Oklahoma.
Our guest that was going to be on now, scheduled for a later date, put advocacy into action and his background was really a sales trainer, comes to New Jersey and decides to get more operational. Not every salesperson can shut that off. That constant need to sell more, be more, grow more and be more patient for the longer game of career growth. And I find in banks some great stories come out of people that maybe were not even specifically in mortgage. They ran a branch and loan officer in their town is out there crushing it, closing mortgages, making six figures. But as you look at the trajectory along the way, 20 years later, loan officer is still dealing with the ups and downs of a cyclical market. And there's so many amazing stories of people that started, you know, just by opening the doors for their customers. And now our CEOs of these huge large banks. And when I look at you being with the same bank for over 20 years, I'm guessing you had some similar trajectory where you were patient and one day you looked up and you're CEO of one of the largest banks in your state for mortgage.
[00:12:12] Speaker B: Well, as I say, I'd like to tell the story, Mike. My first job at Arvest, where I was there was 32 years when I got in, my first job was a bank teller. And everyone in financial services or in a bank should be a bank teller because that's where you really learn about who's paying your bills, which are the customers. And then two years into that I got into mortgage banking and my first job in mortgage banking, I wasn't even the copy machine guy, I was the assistant to the copy machine person.
So I couldn't have started any lower on the totem pole and got an experience to be in a growing company, really an upstart, and got in there at right time, right place, found my way into secondary marketing where we were gaining our Fannie Mae seller servicer tickets and then eventually our Freddie and then our Jenny. So definitely timing helped. But in being in the right place at the right time, like I said, and having tremendous leaders and people who gave me a chance in having just terrific teammates to help help surround me and give me support me on those on that journey. But it's interesting, you talk about loan officers and, and maybe I read a little bit of okay, they definitely, they're all, they've got full time jobs just trying to bring in business. But you know, remarkably, even within the state of Oklahoma, our current, our current mba, Oklahoma MBA president, she is, she came up through the production side. She's an operations manager. Our president elect is a loan officer, is a producing loan officer manager today. And so it's great to see people in production getting opportunities to be involved in advocacy and in state, local and national leadership as well, if that's what they choose to do even before the NBA. Future leaders in 98.
[00:14:07] Speaker A: Everybody's in it. Like Greg Schurz is a best. All of us. Everybody's in it together. And if you can get that almost future leader, but some sort of class of advocacy, because you do have a lot of loan officers that get successful quickly and maybe then judge a little too quickly. You know, they would say we said seller services, Steven. Not teller services, bank teller. Right. But they don't know that 20 years from now, if they, if they advocated with you, you would actually be the one out there ahead leading it all. So I think there's some hubris to advocacy because you're giving to others before you're giving to yourself. But in the end, it usually does come around in this industry.
[00:14:53] Speaker B: Yeah, that's a great way to put it. And. And I was going to say back in quote, the old days when state and locals were a little bit stronger. And there are still some, obviously some tremendously strong state local, especially state MBAs, obviously California, Texas, they're big ones that come to mind. And. But unfortunately, some of the others had to combine even. But there's still great state local presences. But back, you know, back when I was coming up, it was an awesome privilege if your boss invited you to go to an MBA luncheon or whatever it might be, or the state MBA convention. And I still think that is. And so again, those things all, you know, again, they can start at a state local level. They can start at participating in a. Some sort of action campaign at your own company. You know, the NBA does a tremendous job to provide resources to their members to run these campaigns with basically what I call campaigns in a box to help them spread the message about the Mortgage Action alliance or whatever it might be. And obviously Mortgage Action alliance, which is near and dear to my heart and yours too. I know it's such an easy way to get involved. And stay updated with what's. Again, what's going on in your business that affects your livelihood?
[00:16:07] Speaker C: Stephen, can I. Can I. I'm gonna ask a personal question related to your involvement with the NBA. What initially sparked you to want to join the. Either the. The national MBA or the Oklahoma MBA at the very beginning when you first joined. I mean, it. Maybe you didn't want to do advocacy at first. Maybe you just wanted to see what was about. Or maybe it was just like, hey, I just want to check it out, see what it's all about. Can I ask your. Your. The beginning part of that journey. So for the people who haven't who might not yet have joined their state or national mba. What was that like for you? To actually initiate the choice to join the MBA and to go on this journey not only as a member, but actually go into leadership. Can you tell us a little bit about that journey on a personal basis?
[00:16:52] Speaker B: Yeah, you bet. Well, fortunately, I had others before me that brought me along to introduce me, to introduce me to the idea of, hey, there's a network beyond just our company. We have peers, and while we're competitors, we can be friendly competitors with a common interest. And we put our common interests together actually in a formidable fashion to protect our interests through our MBAs, whether it's a state or local level or at a national level. So that sparked my curiosity and again, having the support from the companies I worked for, to be able to, to engage in that and then engage even at a further level, you know, that, that, you know, again, that's just something I took to. And, and again, I can't underscore the importance of having a company that supported my desires and my curiosity to grow in that. And because that's a key, because, because that's. There can certainly be competing priorities sometimes, but it is, it is important that we get a diverse group of mortgage lenders and banks, credit unions, whatever it might be, involved in our advocacy.
[00:18:05] Speaker C: So as we begin to talk about advocacy, and this week was, or this past weekend, I should say, pretty big news on the CFPB front with Secretary Bennett taking over. What do you see happening?
It's kind of a lame duck role for the cfpb.
I mean, running the treasury and the CFPB at the same time. So what do you see happening for advocacy? Is this, is this a, could this be like the greatest time for organizations like the NBA or community home lenders or, or anybody that wants to advocate for that role? What do you, you know, do you have an opinion about how either individual loan officers can begin to look at this and say, you know what? I would like to participate. Now, how can leadership help me so that I can help them for the, for the purpose of advancing the industry?
[00:19:00] Speaker B: Well, you know, prior to, prior to the changeover in the prior administration before Biden Harris, you know, one of the major things that I know that's, that's obviously near and dear to Ellos hearts and a lot of the industry was lo comp. And you know, I do feel like that the industry was making fairly decent strides on having lo comp, you know, get some help. Help in that, quite frankly, that los were willing to concede on lo comp where, you know, where some things just weren't making sense. But it certainly kept, you know, the hands tied on the companies and the ownerships. So long way of coming around. What's going to happen with the cfpb? As I mentioned before, you know, some of the things that have come out have been, been okay and necessary. But again, I think we all agree it went to, you know, it went, it went too far in many cases as well. So I think it's going to really boil down to, you know, making sure you have the right parties in the room talking about to your point, now we have a chance to do something. What does that, what is that doing something actually going to look like? And do we have the right people at the table to give us the best possible solutions to move forward that are sustainable and that don't get upended in potentially four more years, three and a half more years, whatever it might be. And, but, but I, I think, you know, I think everyone's optimistic that, that there's going to be, you know, that there's going to be some, some real traction with this change in administration on some of these things. But there's also a little bit of be careful what.
But again, if done thoughtfully and again, having the right people at the table, this is absolutely the time to address these things that have been lingering for way too long now.
[00:20:54] Speaker A: Stephen, obviously many of these regulatory agencies have different clawbacks where they're able to audit back years. I think cfpb was typically 3.
Is there a fear this administration says no CFPB, new administration says CFP back on. Is that new CFPB allowed to go back three years with their old rules? Like, does it almost have to age out 6 years for people to start feeling like you can't go back three and get me. Or if do you believe the mindset is if this becomes dissolved, then whatever we do for the rest of this administration, the next one can't come and claw back on it?
[00:21:38] Speaker B: Boy, that's, I think it's. Anything I was, anything I would say, like anyone else would just be speculation at that point on that. But I think you bring up a great point which has to be addressed in, you know, again, in any course of action that's, that's built out from here and that's, that's, that's obviously a major one. I mean, that has been just a major bugaboo for so many.
So much of the industry has been, again, just the very word clawbacks and, and statute of Limitations and all that.
[00:22:07] Speaker A: And no one probably knows it better than you. What's it like being CEO of the bank? I'm sure you have to like actually put your signature on certain things and you have regulators coming in. I'm sure your, your only job can't be just to turn up the air conditioner heat on these auditors when they come. I'm just kidding. But yeah, like, there must be some protocols in place running a bank where you're now juggling multiple agencies. How did you manage that? How did you do that?
Do you think this is going to be any easier for banks now?
[00:22:38] Speaker B: Well, again, as you guys mentioned, banks have been highly regulated for, for many years. And then other. And then just add on the additional layers. If you're, if you're in the mortgage banking business, if you're in the origination business, then add servicing to that. That's even additional layers of regulatory oversight and scrutiny. So, you know, I think in my roles as a mortgage CEO over the years, you know, anything that I had to sign off on, I signed off. You know, I signed off or I didn't sign off based on what I believed at the time, which is, you know, to, you know, to the best of my knowledge, this, this or this. And that's what you have to go with along with. Again, the same for your team. Now you are the leader, so you do have to take a, the ultimate responsibility that whatever, whatever's going on with your team or your, your services or your policies or practices that it's being done. But, but yeah, that's absolutely something that generally that comes out in the results.
But that doesn't mean that, that you can't have cracks in your, in your, in your, in your organizations that from time to time have to be addressed and we all do. It's just, it's just the nature of the business when you're dealing with tens of thousands or hundreds of thousands of transactions and customer interactions and so forth.
[00:23:55] Speaker A: We're here at the bottom of the hour as Michael thinks of his question. I'll give him about a minute and a half to think of a best way to word it. And just say that in season four, this part will not just be audio microphone. Zhao and I giving who we believe is the primary sponsors of keeping this going. But we are going to be working with our new sponsors to have video role at this point so people like Stephen will be forced to watch it, which should be a huge lift for you when you know, some of the guests we have coming up, including Greg Sher Most followed person in Mortgage Next week we have the Week After Stan Middleman who is one of the most influential people in mortgage when it comes to msrs. We have Patty Arviello from New American Funding who is teaching young entrepreneurs how to succeed and follow her path. We have Owen Lee who just signed up who is also running more pack or maybe just finished his his term in one of the hardest positions in mortgage where you're asking for money and you are rewarded on the other end sometimes as I believe he is going to be one of the future leaders of the NBA. And we have many more, including someone I met and always this is the thing about conferences. You come here for this information after you go to a certain amount you start to earn respect by those that give their time to advocate. One of those is Stephen A. Milner from US Mortgage who will be on our show coming up and he is a former professor, so nicest guy in the world and cares about children. Math professor and so when he heard I have a newborn, she's 13 weeks old. I listen to a lot of podcasts while I'm walking around, so I'm very knowledgeable in the industry these days via podcasts. He gave me this book. He has all of them in his office spent. I mean it was $10 just to ship it to me.
Very touching. Sometimes the things you do for people when they're more than just a gift, they have some purpose behind it. And he as a former professor, pointed out that over half of your IQ, 50% of your IQ is established before the child turns five. And there actually is a lot that you as parents can do to raise that iq. It's not like speed. You're not born with it or not. And so that meant a lot to me. This one's a freebie. In the future this will be a you'll have to do something. But Evertree Insurance, they were nice enough to give me a card and I'll read it. Michael and Mike, thank you for all you do for the mortgage industry. Your passion and drive is so inspiring. I especially enjoyed your podcast this year. Looking forward to watching you help lenders level up this year. Don Hooper so I guess also if you give us flowers with it, maybe you can sneak your way on there like she did. Here's the swag. Here's here's it.
And for other housekeeping sapiens decisioning there is a new world in mortgage where you will have your own decision layer. Why make manufacturing decisions in the LOS and secondary decisions in your ppe? And marketing decisions in your CRM software when you're changing it over the course of a decade. Why not have a decision layer that Freddie Mac uses to make all their decisions on all of your LP loans and please contact me to set up that meeting. Doing that with a lot of IMBs, it's the only iPhone moment. Like I never thought I'd see that. A really fun one to get on. And also the leader in what I call agentic AI. But it's really the most advanced RPA agentic bots that you could have out there. There's large lenders that have gone from 38 people down to three on a disclosure desk and have put hundreds of thousands of loans through it. There are people that have gone from 14 people on a closing desk down to two silver works solutions. I would prefer if you came through me for that introduction. Michael, before we get back into the second half of the show, do you want to give a quick shout out to your private office world or anything else on your mind? Sure.
[00:28:06] Speaker C: Right now we're still representing the family office in making purchases of RTL mortgage loans. And so what we're doing is we're making the purchase of what they call also fix and flip loans or bridge loans. And in doing so a lot of people think that they're just for fix and flip. Some sometimes they need a bridge from one mortgage loan to another. It's an opportunity for you as the originator to figure out how you can actually take a bridge loan and utilize it. Put it into your interior repertoire as AI and as more agency loans are being picked up by you're maybe you're being shopped out by price and maybe you don't understand the non QM market well. The for the these bridge loans, this is an opportunity for you to talk to your realtors. You don't maybe you don't need the top realtor in your geographic area. However, at this point in time, if you're not looking at realtors number two through six that are helping out the flippers or even the realtors that are communicating with the flippers so they can put out the existing product of inventory, you know we have limited product. This is the opportunity to be talking to them so that you can bring your buyers to them before they hit the mls. If you're in an area where inventory is somewhat lacking and you want to get up get it in the market to your buyers before it gets into the marketplace, then getting them involved with these RTL loans with the flippers and utilizing not only our services but asking us questions so we can give you that education. Be happy to do that for you and with your leadership. Don't know.
I think we had a technical difficulty. But you know Mike, it's such interesting news to me when we, when we look at Secretary Bennett and now him running the cfpb, it makes me begin to wonder because the CFPB just isn't about regulating the mortgage industry. The CFPB also regulates financial services. When you're talking to financial advisors, when you're talking about any with credit cards and, and bankers and you know, I would have wanted to, to figure it out from a banking level, you know, how does the CFPB and how does, and how do we advocate for the, for the client? Today I saw an article on LinkedIn talking about private credit and when it relates to credit cards and as credit, as credit card debt begins to increase, this is the opportunity. There's so much home equity that has increased since the, since values have increased. You know, we've seen an increase in second mortgages, we've seen debt increase. So this, this lame duck or whatever you want to call it of what's going on with the CFPB right now affects not only the mortgage industry but the lasting effects of how it's going to affect consumer credit, the spending of consumer credit and how for us in the mortgage industry if you're doing second trust deeds or even cash out refinances, it's no longer about selling rate. It's really about teaching about financial education and not just about how much are you going to save per month. But remember the CFPB is also regulating, helping regulate the financial advisor. So now working with financial advisors, with the bankers, credit cards, automobile loans, there's a lot to unpack with this with private credit and how much deregulation there could be in this change of leadership in the cfpb. I'm interested, I'll be interested. You know, I've got the popcorn. You've seen that the meme with someone see the popcorn going on. What is actually going to happen with regulation or the lack thereof.
And, and I, and I'm curious to see how our advocacy leaders. I was, I was going to actually ask Taylor before and I was ask Stephen as well with community home lenders or with the mba, how can advocacy now be increased? You have an opinion Mike, on advocacy, increasing advocacy now that maybe we could have a bigger say for mortgage originator comp, for FICO scores and even more so what we can do to enter into leadership. I mean future. You know, we're, we're not officially future leaders with the NBA, but you know, we have a voice in, in social media.
[00:32:35] Speaker A: You have tend to learn and as we bring Stephen back in here, he will tell you it's going to come more down to the state level.
Last time Trump was in office, he actually had somebody, Kevin Barano brought this up, but actually had somebody in dual roles and in charge of the CFPB for over a hundred days, Almost, I believe 200 days before he put, got Kratzinger in charge. So this is the same playbook as before. Don't be too alarmed with it. They're just having a chance before they act. He's doing it different this time. He's, he's running it like a business takeover. And they're going to make sure and see what's working and what isn't, I think, and, and redo it. In the meantime, people are going to be looking for jobs. Those that are great auditors, the division of banks will pick right up in certain areas and they will go out and make sure traditionally that lenders are playing by the rules.
You asked about advocacy. I'll give you an example because you brought up Taylor Stork who's going to be on our show. And I gave this in my recap of the IMB. I'd welcome anybody to look on my podcast LinkedIn and actually listen to it because I gave some good nuggets from Steve, sorry, from Stan Middleman, but also from Bob Brokesmith, president of the Mortgage Bankers Association.
So they're Talking about the GSEs going into conservatorship are out of conservatorship. I won't get too much into that. But they've been in conservatorship, meaning the government has essentially run it for the last 16 years. Think of it as a timeout. Someone made a joke. You put a two year old, Bob, did you put a two year old in a timeout? They're now in college and still in a timeout. But he gave three areas that they're asking for. One is an explicit backstop and how the 30 year fix is still the best housing finance vehicle in the entire world. And let's not ruin that everybody here. So they need an investor confidence backstop only on the mbs, not on the companies. So they almost want to give freedom to whoever bids and wins this, this bid for Fannie and Freddie, but make sure there's still a backstop on the MBS part of it.
But number two, you ask for advocacy. And what Taylor's always talking about, as he explained, exposed FICO on this expose them for giving better rates for the larger lenders. What the NBA is trying to stay ahead of. And this is where the community home Lenders of America is saying there's a little bit of dual mandate, right? Because there's so many big, big banks and big companies that, that fund the mba where community home lenders just be those independents. But level playing field on pricing and underwriting because once this goes private, they have the right to treat it like a private capital business. Right. And so how can we advocate to take it out of it and then say, oh, we can't get, what do they say? Can't get the toothpaste back in the tube. So you have to add, what could you advocate now? Well, unless you're at a huge bank, you should be participating to make sure that based on size, business model and capital amounts, this new person taking over Fannie and Freddie cannot give better pricing to Cross Country Mortgage than your mortgage company. Otherwise you're going to have quite a headache and wish that you did participate in the, in the areas. And I think one could say that you can bring just as much impact at the state level than you can at the national level because the voices are still the voices. And I find in this industry they bubble up. If you're loud enough at the state level. I shouldn't even say loud. If you participate enough in the state level, your state board will find you a way to get you involved in the national level on committees and that's it. Unless you, you know, you're not gonna be doing much more at the national level until you join some committees yourself. And it's like a four or five year process to actually be running anything. So the best way you can run is by out working and out advocating and out volunteering other people.
But if you ask me why, I think the one that stands out the most is whatever happens to this gse, if it, if it gets out of conservatorship, if you're, if you don't work for Chase or Bank of America or Cross Country Mortgage, you should band of brothers right now and make sure that it's fair pricing with this new private person that you won't know up in Wall street and you won't have a chance to say this isn't fair. I don't know your thoughts on that, Stephen, but that was my takeaway from Bob Brokesmith. It reminded me of FICO all over again.
[00:37:08] Speaker B: And you brought up a Great point about no matter what happens with the cfpb, whatever it might be, but a lot of the state, state agencies are waiting in the wings to, to jump, jump on board or fill some of those gaps too. So that was a really, really good, really good take there. Absolutely, for sure. But no, I mean that, that's spot on and that's why that's conservative. This conservatorship has gone on for what, 15 plus years. I mean the, the unknown of again is you referenced at the top, you know, a 2 to 2, 2 trillion dollar industry. This is just not something to go park in a new home and expect everyone to live the same lifestyle. I mean this is, there is, there's just a tremendous amount of, tremendous amount of, of considerations that, that go in it. And back to your point, if you're going to make it an open market, truly open market, then that, that does create challenges around level playing fields. I mean I'm been in it long enough to remember when the playing fields weren't level, when guaranteed fees, there were pretty wide gaps between guarantee fees of some of the companies getting you know, darn near single digit guarantee fees and you know, mom and pop lenders getting, you know, almost triple. So I mean that's, that's, we've, we've, we've seen those.
[00:38:26] Speaker A: Can you tell us more about that? But what was that like and why did, were they recruiting up all the small people just by saying that better pricing over here?
[00:38:35] Speaker B: Well, I mean this was the days before the Internet really the Internet taking storm and so forth. So a lot of it was, was brick and mortar regional origination. I couldn't, I think that would be very challenging in this market for again as you referenced, for, for lenders with no leverage to be able to compete. If it's truly a volume based incentive or whatever it might be. Unless you, unless you do see cooperatives rise to the occasion to be able to give pricing power to the smaller lenders, to compete against the larger lenders, if that truly is the differentiator.
[00:39:15] Speaker A: And Mike, as a capital markets person, that doesn't make them bad people. Usually you get incentives based on volume, right? This is more of a, everybody's used to the way it is and they therefore think it's fair. But technically speaking, if it wasn't Fannie and Freddie, most of the time you do get volume discounts, correct?
[00:39:35] Speaker C: Well, I mean that's the way it goes in life. The more that you buy, the more that you know, the, the more the cost to procure the product to become is better, right? So it is gonna, it is gonna get a little bit cheaper.
I actually want to bridge something that was mentioned in the last few days been kind of a hot topic I want to talk about President Trump is talking about is telling, hey you know what, maybe we should try and figure out how to reduce the yield on the ten year treasury rather than having the Federal Reserve reduce the overnight lending rate. You know, there's a relationship with mortgage backed securities and in the ten year treasury. And I think that that's an, one of the arguments that I had when I was talking to a colleague of mine yesterday was like, well it could be good if there was more purchases of mortgage backed securities bringing new originations and lower interest rates, but would that actually make it harder for residential lenders? And the reason I say that why would it make it harder is if there is a, if, if there is a need for affordable housing right now across the United States and there is more money that's going to be pouring into mortgage backed securities, I would think that actually that there would be more of, hey let's, let's, let's figure out how to put more small balance or large balance multifamily mortgage loans into the commercial mortgage backed security pool rather than residential mortgage loans. In which case now that we need, we would need more advocacy for residential mortgage lenders.
And you know, the MBA supports not only residential lenders, but also commercial lenders. And so the question I have in relation to all this is, you know, how can, how do we under, how can we bring more understanding of relationship of, of what government does to what the, the Main street residential mortgage originator can get educated and, and, and, and through that education I say oh this is how it works and this is how I can be better and do better for the industry and fight for not just the mortgage industry on the, you know, as a whole, but I want to fight for actually residential mortgage lending because the MBA represents both parties, the commercial and residential scope. Next week I'm going to be here in San Diego going to the multifamily conference of the MBA sponsors. And so how does the residential mortgage originator fight help fight in advocacy, in talking to leaders. I know that you've been brought aboard, you know, but I, I don't speak to that many originators that say yeah, I'm going to join the NBA and I would really love the opportunity. I joined the MBA and I, and, and I would like for more resi. Residential originators to figure out that they can participate. I know Leadership has some encouragement, but they're. There just isn't that many residential originators yet involved. How can, how can we promote more?
Hold my hand and bring me along, join the NBA. I mean NAR has a huge following. How do we, how do, how do you think we can also encourage not only leadership but also Main street originators to join their regional. I'm in California, you know, Susan Malazo runs a great organization in California. But how can we, so how can we encourage more, more participation at the Main street level for originators?
[00:43:16] Speaker B: I think it continues to be, we have to cite. Hey, here's what, here's what your trade association did for you. Whether it's at a state or local level or the NBA. Whether it was, you know, going back several years, whether it was addressing, you know, guarantee fees that went to non housing issue, you know, non housing appropriations. I mean that was, that was one of the biggest, biggest things if you all remember when they added, added to the guarantee fees to fund I think unemployment taxes or something like that. So, or what the NBA did a few years ago when, you know, when they, they come out and added the, the, you know, kind of the in the middle of the night guarantee fee increase and we had no pipeline protection. So things like that. Now one might say, well, how does that even happen? I mean, don't we have people having the right conversations to understand you can' these things without protecting consumers and lenders. But that's, this is also why we can't assume that people are always going to operate in the best interest of the lenders, the consumers, the operational, you know, the operational logistics. So we have to, that's why we have to get a seat at the table. We have to have access so that we can always make sure, hey, don't forget about us or hey, we're here. Before you go and talk about this potential change, we need to talk about the downstream, upstream effect of these things. But back to your original question. It continues to be citing specifics to the originators. Here are some things that your trade association is working on in your best interest. Now some of them are going to be more mundane to the originators, you know, I admit, but they're all important because they all tie together to the strength of our industry and the strength of residential lending. And you know, I, you know, I don't know that there's a magic pill to Michael to you know, to increase that origination participation, you know, in large incrementals. But I do feel like that, you know, we're all Getting a pretty good primer on civics just literally by the day with what's going on with this new administration. Yeah. Now, you know, depending on what, you know, what you listen to or what you want to, you know, whatever your source of news is and what you want to listen to. So I think there's going to be a lot of attention on what's going to happen, because there's no question that there are some bold ideas being put out there. And if you're in this business, whether the residential real estate side, commercial or even, you know, whatever it might be, selling residential real estate, selling commercial, you know, your ears better be perked up because there are so many initiatives as you talk about affordability. We've got to figure out how to cut red tape to get more homes built. We got to figure out how to cut down barriers to building homes in places where we need affordable homes and not just homes that are out of reach. So these are all things that, again, these are all things that are on the MBA task list that they're going to continue to work towards to move the needle to, again, help replenish the inventory that we need, especially in that affordable area.
[00:46:29] Speaker A: That seems to be the. The answer. And I think it is moving fast. Whether you, wherever you are on the political spectrum, everybody's underestimating. It's not just like President Trump has the Senate, he has the support of his entire party. That is not supporting him, I don't think, for who he is, but they're supporting him for the votes that he received and in the way that he received them. Meaning if you actually look at a map, right, there are a lot of red areas where a lot of this available space to build is. A lot of the places that voted blue are out of space. So I do agree with you, Steven. Like, there is ways that that's probably where you're going to find affordable housing the most. But the real solution is somehow a magic train, you know, getting people into the city faster in places where there's actually room to, to build houses or, or federal land where people don't want to live. Right now, how do you make it where they do want to live? And obviously, assuming it's unlocked. So there is a lot going on. And that's a. So as somebody on the board of Massachusetts, you as a president twice of Oklahoma, I think there's three stools to a state organization. There is networking, there is advocacy, and there is, I would say, some sort of educational aspect to it. Right. So the networking has decreased in all of these states, I think because of traffic and how hard it is to get to a certain area because of people needing Uber. And it was typically after drinks. So that adds costs, significant cost. And I think, look, I could say I know this is real things I'm saying here. I think the Internet. So I think people used to go, like you said, to places for deals and now they don't need to go for deals. It's too expensive to go out and they're going to hit traffic. So it's hard to get there. So at least we've noticed, you know, more regional events. But the event part itself is not what it used to be the lifeblood of of it. So then you have the education. I think the education does really well when it is, you know, around going back to what you said. There's no magic pill, Stephen.
That's right, because there's no magic. People don't buy vitamins. So all the pills we have are vitamins. Like you can. This is going to be better. We're working for you. We have yet to figure out. I always say this the. Because people buy aspirin all the time, right? Your shoulder is Kurt, you're going to go find a way to get down there and get the aspirin.
We have yet to find a way to create aspirin. Being like, oh, if you're a member, this won't affect you, this law coming up. But if you are, you know, if you are a member or you. This won't affect you. If you're not a member, it will. That's not how it works. So I find even in the educational parts, if you're doing here's a HMDA event on how to stay compliant, people attend. If you say, here's E Notes and E closings brought to you by our E Closing E Note vendor, that's a nice way of doing business. But they might not. It might not be as well attended because as people aren't as scared. I'll take care of it next week. So that's where I see the state level and I think the biggest problem facing the state. So I'll ask you as a leader, a little pivot here.
I think deals used to happen at state conferences, at state events between vendors and lenders and I. I don't think they happen quite as much there. A lot of region large lenders now don't make the buying decisions anywhere except at corporate. I shouldn't say that. Obviously there's certain states where it is happening because that's where all the corporate offices are the big lenders. But and times are tougher so like people aren't buying as much and the vendors aren't showing up at the state level to really get people excited about and sponsor things. Like you hear all these old stories of. They used to, when you were at Harvest or Gateway Bank, Covid was very busy to make vendor decisions. And then after it, it got very dark and unprofitable in certain areas to make decisions.
Where do you see vendor lender relationships today?
Especially as somebody as active as you at the, the events you might go to, all you might have very little time to set up meetings. I know my side, I talk about all the side on the vendor side and consulting vendors. But you as a lender, as somebody right now that is not at an exact lender so can speak a little bit more freely. Where do you see it today and where do you see it tomorrow and how does it keep states and national vibrant to attract vendors to actually make sales to lenders over, over time?
[00:51:26] Speaker B: Yeah, that's, that's a great question. And I'm, you know, I've heard many of my peers in general forums and public forums speak on this topic, which is unfortunately the continued compressed margins have made everybody have to evaluate their spend. And am I getting the return for, on investment that I was certainly sold or promised or you know, what part is, is it my company that we're not taking advantage of that, of that software or those solutions to maximize it or is it a default on, or default on the part of the service provider?
Everybody. I mean, I can't tell you a company that probably is not, is not evaluating all that. And when, you know, when the money was flowing pretty well, you could live with some, you know, you could live with some, some dry holes and some, some tests and trying some different things out. But this business does not have that. I mean the margin compression folks are just trying to make, you know, literally trying to, trying to, I mean forcing profitability has returned the last few quarters. But you know, they want to get back to, you know, ownerships want to get back to not just not losing money, but they need to get back to reasonable returns for the risk that you take in this business. And so to answer your question.
Well, I, it's, it's, I do think it's probably a combination of volume and units.
You know, like Michael said, you know, volume, volume drives a lot of opportunity. I mean, quite frankly. So, but, but to answer your question, it's been, it's a challenge right now for Vendors and for lenders alike who are evaluating their tech stacks or service providers or how to, hey, how do I manage my, my, my verification costs, my credit costs? How do I fit this into my system?
And then you go on top of that with again, low comp rules and other rules related to, again, how can I account for every dollar that's spent or every dollar that, that, you know, every dollar that becomes a sunk cost, which in lending you have sunk costs. You're not going to close every loan, but you also have to build that into your model too.
You know, one thing I did want to circle back to, Michael, one thing on the origination part, you know, because again, as originators continue to, you know, battle hard to win deals right now, a big issue continues to be around property insurance and taxes. So, you know, back in the old days, I know I keep saying that, but I've been in mortgage 33 years. But back in the old days, you know, you focused on P and I and then, okay, add another 150 bucks a month for taxes and insurance. Unfortunately, that's not the case nowadays. Taxes and insurance can break a deal now. And so that is something that the NBA in your states especially are working on with local insurance commissioners and so forth to address. Hey, what are some things that we can do to help, you know, bring insurance more in line or make sure that taxing, you know, tax assessments are appropriate and timely and more in line because again, that, that continues to, that will continue to be a barrier. And any percentage that it prohibits, you know, to people buying homes is something we can't afford to have. So that, anyway, that's, that's another one I wanted to follow back up on. But, but yeah, the people, you know, the vendors have to bring it, Mike, right now. I mean, the vendors have to bring it. And I don't know that people have 12 or 18 months or 24 months to sit on, you know, to get results. I think they're going to have to be, certainly from my position, positions I've been in, I'm going to want to have, I'm going to need quicker bang for my buck.
[00:55:23] Speaker C: If we look to the trade organizations for leadership. And then, then, then, and as a result, we asked for some kind of government intervention.
How much communication? Or is there any communication, Stephen? Because I don't know of any. So I'm asking out of ignorance, is there any communication from the mba, for example, to like, the property casualty trade organization leaders? So instead of going through government and asking, you know, dad, can you tell our Other cousin here to help a brother out.
Is there very much communication between the trade organizations of property casualty insurance, fire insurance companies to the MBA so that we can create some understanding? I won't say resolution, because I'm not sure that's fair, but understanding so we can say, hey, look, you're affecting our ability to put housing out there, and something's going on with your. With insurance. I know there's hurricanes. I know there's fires. I know there's all these costs and so on and so forth, but there's got to be some way, because you guys are still making money because they're. They're. You guys are trading bonds and trading stocks and. And on Wall street, so, you know, you guys are making money, too. We're making money. You're making money. But is there. How much communication is there so that there can create a.
Instead of a contentious relationship, more of a, let's figure out how we can work together. Is there very much communication between, like, maybe Oklahoma mortgage to Oklahoma insurance versus national insurance and the NBA? Is there very much communication?
[00:57:03] Speaker B: Well, I do know from a few different situate cases, yeah, a lot of the communication seem to be between local states and their local state insurance commissions. Can't speak on the national level. But that's. That's a great observation, Michael. And. But it does seem that a lot of the conversations do tend to get deferred to the. To the state insurance commissioners on that. And as you know, it's. It's a lot of pointing the finger at each other on who's. Yep, exactly. So. But that. But that's a great question. I'll be glad to follow up on that and come back to you on that.
[00:57:38] Speaker C: Sure.
[00:57:38] Speaker A: I can't believe we've already done an hour. I just looked. I was like, whoa, two people don't know this? Stephen is fighting through sickness to do this for us and on an hour's notice. So he saw that it was advocacy, and he said, all right, I'll come on and do advocacy.
We are so appreciative of that. So Bill Loman actually went through a whole one in rough shape. So, yeah, the COVID Right. So you're gonna have to have, like, a battle ring of warriors and you would make it. I did want to give you a chance, Stephen, to say anything you'd like to say here at the end. But before you do, I always like to hear. Can you talk about the ceremony that you. That Oklahoma does with the acting president, I believe, of the NBA or maybe more with the Head.
I don't know what you call it, the headdress and the symbolism of it and how you've been able to keep it up throughout the years as something special to Oklahoma. Not many states have.
[00:58:38] Speaker B: Yeah, thank you for asking. And before I forget, I do want to again, thank you for asking me on short notice. And I, and, and yeah, hopefully my illness hasn't come, come through too bad, but Bill Loman had. Bill Loman on his worst day is gonna be probably better than me on my best day. So Bill, Bill's an awesome guy. We've, I've enjoyed breaking bread with him on several occasions. But I want to remind everybody the national advocacy conference, April 8th and 9th in Washington DC. Mike, I know you'll be there. It is, I'm telling you, you want to get energized and there's no better time than right now. So I'd encourage everybody to take a Look at that. April 8th and 9th in Washington D.C. it's a life changing experience if you get a chance to do that.
Oklahoma, Oklahoma has had a decades long tradition of being able to proudly host the NBA chairman each year. And as part of an ongoing presentation, the NBA chairman would receive an Indian headdress. And obviously very, very, very, very important to the state of Oklahoma. With our strong Native American history, this headdress is obviously symbolic of outstanding leadership and so much more. And so it's always been a proud presentation to be able to present that to our NBA chairperson and we're glad to be able to do it year after year. And I know that's, I think for most NBA chair chairpersons, I think that's, hopefully that's one of the, the most unique and, and one of, one of the takeaways from their many, many visits to the states that I know, I know that they find very special and appreciate. But thank you for asking about that.
[01:00:19] Speaker A: When you know, it starts to be real.
[01:00:22] Speaker B: Yeah, but thank you for asking that. It's, it's, it's. Yeah, it's, it's a pretty neat experience and, and we tell the history of it and so yeah, it's, yeah, it's quite a, yeah, it's quite an awesome thing to be able to do.
[01:00:37] Speaker A: How can people reach out to you for mentorship, consulting opportunities? Any, you know, questions about leading banks in mortgage.
What's the preferred method of contact? Keep in mind people are listening maybe on a podcast. So I don't know if email, text, what might be the easiest way.
[01:00:57] Speaker B: Yeah, you bet. Well, you can find me on LinkedIn. Stephen Plaisance. And you know, I stay pretty active on that. And, and as mentioned, I am, I'm in transition right now, so, but again, while I'm in transition, I'm also available to, as you mentioned, I'll be glad to talk to anybody about the mortgage industry, which is why when you texted me, you know, you know, 70, 70 minutes before we started, I'm like, you bet. I mean, I don't have to prep to talk about advocacy. It's, it's what something I love to talk about and, and it's easy to talk about and I appreciate you making time to do it. But, but yeah, you can find me on LinkedIn. Stephen Plaisance.
My phone number's on LinkedIn. You can call me, my emails on LinkedIn. And, and again, I, I love talking about the mortgage business like so many of you and, and I enjoy the opportunity to, to visit with you and I appreciate the content you put out and so many others. And, and that, that's what's awesome is that so many, we have so many great minds putting out good content every day, encouraging people, but also asking great inquisitive questions and challenging one another. So that's what I love about this business.
[01:02:06] Speaker C: I think this is what an opportunity right now, especially with so much change going on, not only in the governmental administration, it's the opportunity right now for those who are on the ground level, on Main street, those who are originating mortgage loans, underwriting mortgage loans, and then the leaders that we, that are, that are that, that we can conjunctively work together with in order to bring not only, not only better product for originators to go sell and earn and earn their livelihood and income from, and also a time where the borrowers can also get that feeling through the originator. The advocacy of the industry is not just for, not just for mortgage lending. It's actually as a result a better, a better industry and better experience for the borrower themselves. When you have, it's just like the same happy wife, happy life. Well, if you have a, if you have a happy industry, they're going to produce a product in the form of mortgage lending that the consumers are also going to benefit. It's a mutually beneficial relationship in advocacy to originator to borrower. And when, when people actually get it, then advocacy is actually much more real at that point. I think it's not just another organization that, you know, maybe I joined, maybe I don't.
Joining an organization understanding what advocacy means for, for you as the originator also means a better experience for you so that you can produce a better product for your borrower. There's, you know, there's all kinds of things we talk about, margin compression and pricing and things like that. The advocacy of what we talked about, you know, we talked about the tenure treasury and the relations of the mortgage backed securities a little bit earlier. Advocacy is going to help. Stephen, I, we're grateful that we can have you aboard, you know, on last minute notice because promoting advocacy is not just something for originators just to look at and go, yeah, they're just doing something for us. It's actually also something for the industry and, and creating a better environment not just for leadership, also for the origination platform, for, for the originators on the sales level as well. So thank you for coming aboard and talking about this.
[01:04:22] Speaker B: Well, and as, as mentioned, Mike and Michael, hey, I'm available. I'd love to speak to anybody, any company or your teams or leadership about what's going on in the industry, advocacy, whatever it may be. I'm happy to make time to do that and because again, I love this industry, I want to help in any way.
[01:04:39] Speaker A: Thank you again. It's why we termed him the ambassador of advocacy. And Stephen represents something that should be important for everybody who's going to represent you when you're not in the room? And I will tell you, it is a truly an honor. I really look up to Stephen in so many ways because it's not just words. It is him showing up time after time and he's always in a hurry, just like our politicians always has another meeting he's going to and he's everywhere. And it's not for himself, it's really for others and it's very apparent. So thank you, Stephen, for coming on. Thank you listeners for listening. We'll see you next week with Greg Sherry.
