Episode Transcript
[00:00:00] Speaker A: Hello and welcome to another episode of the mic'd up show. You have me, Mike Kelleher, here at 02:00 p.m. on Thursday on the east.
[00:00:08] Speaker B: Coast, and of course, every 11:00 a.m. pacific in sunny San Diego.
[00:00:14] Speaker A: And today we have a special guest leader of an IMB, Mike and I always try to see what we could do, strings we can pull to get, especially an IMB that is on the rise. And I dive deep into how it came about and what differentiators moving forward will be there for city lending in this case. And also, we'll probably throw some technology questions and see if it, if it still aligns in the mic duck show thought process. But today we have Jorge Campo Dunico from Citi Lending, who I first met at an IMB conference. That's why I always like to throw outdevelop the conferences I go to. And that was in New Orleans. And probably two, actually, that one might have been the. One of the last ones right before COVID Is that what it was? Okay.
That would have been 2020 then, right?
[00:01:11] Speaker C: Right before COVID Right before COVID thing. I remember you. We were talking about your app at that time, right?
[00:01:18] Speaker A: Yeah, we were talking about the mobile app. Steve Cooley shout out, I believe, gave the introduction, um, over by the escalator you had your team, and no surprise now, you are a rising star in the industry. Uh, your team does a great job on marketing on LinkedIn. Um, and I'm sure other channels, as I'm trying to branch out there and not just be LinkedIn. Um, but how. Um, so I think your story's very interesting, as I was able to talk to you more or with clients I have see if, you know, there's a fit for some of them. I found out one you originated. Right. Like, so that's not foreign to you, certainly. Um, and then you've also been able to use your ties and your ability to be bilingual to build out ancillary operations that help you be lean and help you scale. And so there's more, you know, as you peel it back, there's more to city lending and more to your direction and vision. So if you just want to touch so that our listeners can have an idea of how somebody gets to become an IMB president. What was your journey and how did. Everybody's got a story. So, I guess, how did you fall into the industry, man?
[00:02:38] Speaker C: I mean, you know, everything. Everything has a start, I guess, from the very beginning. Yes, I was an ordinator.
I mean, I'm a first generation immigrant coming to this country. I came here when I was 18 years old. I mean, doing from everything that you have to do when you just immigrate to a country, from catering to cutting grass, landscaping, whatever it takes to make it. But I was fortunate enough to meet some good people that gave me the opportunity to meet the business.
And, you know, I guess when you're an immigrant and you have an opportunity, you just take it right? Because you have to make it right. And I think that was the most important piece is like some opportunity. And I was able to grab it. And I guess the mortgage industry gave me what I needed, you know, starting from being a loan officer to the guy who hired me when I was a law officer. And I remember his name is JC, he's still in business.
So he was, he was, he was telling me the, you know, he hired me, he hired me breaking all the rules. I wasn't professional. I. I didn't speak English perfectly, and I was very young, you know, 18 years old. But, um, you know, the guy gave me a chance and I just started. And, you know, it was very interesting. We're 350 loan officers. I was always on the number one and two. I mean, you know, in this, you know, immigrant, 19 year old kid that was making rate two hundred fifty k a year. The next year, 500K was amazing for us, for me to see the opportunity of coming to America, grabbing an opportunity, and do it. And, you know, I believe in the american dream, right, because I think it's possible. And Nati, I think the mortgage industry gave me that. You know, we went through the crisis from flying high to losing everything and starting from scratch, starting over, right? And I think I went, you know, I didn't like that much to change companies. I always liked to stay in one place. It was five years with the first one. Then I moved five years to the next one. I mean, I guess as an immigrant, I'd also put you to positions where, you know, you're forced to stay to work for certain companies and you could, you couldn't work for another one.
[00:05:06] Speaker A: Right.
[00:05:06] Speaker C: I mean, that's, that's a longer story. I guess that I will get more personal with that later. But going from pushing me from being a law officer to being a branch manager to a business owner, it was more the need of that. I wasn't getting the leadership enough that I could follow. I couldn't get the motivation enough, and I didn't. I didn't like the way that somebody else will handle their business.
[00:05:36] Speaker A: Right.
[00:05:37] Speaker C: Coaching, training, technology, growing. And, you know, the vision wasn't shared at that time. And then the more I grow up, I think the vision is very important, but I wasn't aligned with them, and I keep on going. I push myself into, I think there is a better way to do this that is a better.
A lender needs to take more risk for the latino community because I understand that these borrowers can really pay. They're very responsible of paying.
And there were other lenders that they didn't agree with it.
If it's a gift, I don't agree with it. If you have a work authorization that it's expired and doesn't have an automatic extension and the underwriter doesn't understand it, I just couldn't deal with that over and over. So even dealing with the realtors and the latino community, the branch managers, I think that's what it made me go for more and keep on growing and I guess become an IMB at the time.
[00:06:38] Speaker B: That's so impressive to me because one of the characteristics that I'm finding about you, which is different from the United States western mentality, is that success is your only option because you're willing to take the risk to do so. And the reason I say that's different is because there's a saying in the United States, failure is not an option. But what I see in your mindset that is different, in your willingness to take risks, your willingness to progress forward, and your willingness to say, we have to be able to do this. In other words, instead of saying, failure is not an option, we just say, success is your only option. And I appreciate that you say that because as you progressed since you immigrated into the country in 2001, you've always been able to say, we're going to do this.
This is what you're doing. And it's something that I find it to be unique because you've reframed the narrative of saying, hey, we can't fail to say, we're just going to succeed. And all the steps and measures you've done in order to do so has caused you to grow since you've ever been to the country, from originator to branch manager to broker and now as a leader, as an independent mortgage banker. What do you think it takes?
Did you have, did you have something to say with that?
[00:08:03] Speaker C: No, no, no. I think I was relating to it because the more I'm thinking is, you know, I had a conversation with all my board members or partners back in the end of 2022, early 2023, man. And it was, you know, let's listen for a plan B, C, D, E. What are we going to do? You know, let's merge, let's sell, let's do this, let's do that. It's like I told him, amen.
I don't have any plan b. This is it. And I think that relates to it, you know?
[00:08:33] Speaker A: Yeah. And in the book, good to great, there's a lot of reference of a level five leader. And that is one of the traits in one of the companies sold all of their paper mills. I want to say it was Walgreens, but then double down on what they thought was great and didn't hang on to just what was supposed to work. Didn't really have a plan b. They sold the mills is the common theme in good to great or the Vikings burnt the ships right when they came to the island, there was no going back. That's level five leadership. And that is the type of leadership that not only that book tells you not only can build a company, but typically is able to have one that can sustain greatness, too.
[00:09:22] Speaker C: I'm going to take that book. I'm going to. I'm going to put it in there to read in it. Been reading a lot of leadership, so I think reading is key for success.
But Michael, I didn't mind to interrupt. I know that you were finishing something that. Some sentence.
[00:09:36] Speaker B: Yeah, I wanted to add something. Is that what was my train of thought? So in what you do, one of the things that you put into, one of the questions that we wanted to ask behind the scenes was that, hey, when you look at your peers and some of the failures that they look at, what is it that you're looking at? And you said, well, I don't look at other people's failures. I want to ask you a question along that same line. What are some of the things.
Obviously, there are huge imbs and they're small imbs, and you guys are a rising star, a city. What are some of the successes that you've seen other imbs do recently that you look at and go, you know what? And you don't have to mention their names, but what are some of the characteristics that you've seen that you're now beginning to implement? So that as you bring aboard other people, you're able to say, look, these are what other people have done, but these are the successful traits that they've done, and we're implementing those right now.
[00:10:40] Speaker C: I think that's very important. I think the question is changed. Right. Not about failures, but what they're actually doing that is working. Thank you so much, Maya. I think the narrative changed so much in a very positive way.
And I think surroundings are super important and you got to keep on learning, right, of people that are actually doing good and that goes along with your mindset to keep on learning. And I think it's great. I love LinkedIn for that because LinkedIn connects so many people, so many professionals, that they are sharing the good. They're able to share what they're doing in their company, their struggles and their winnings. But something very, very important that I notice that all the leaders that are successful are sharing is communication. Communication is not only informing, they are making sure that their vision, their mission, their goals, their values goes actually communicated through the whole company or through the exterior stakeholders. So I think communication influencing, I think that's very key, that that's something super, super important that the successful leaders are doing today and watching. I'm learning. I'm executing it as well.
[00:11:51] Speaker A: How do you view communities? Right. I find that you are a company, and what your story is is you really have an advantage where we talk about on the show a lot, whether the lending industry wants to admit it or not, you do get plenty of people that point out that GSE loans commoditize mortgages more now than ever before because of PP, because of pricing and eligibility software. It's just easier to commoditize. But you have already given in this show that we just started examples of underwriting guidelines almost, of how you would read a bank statement, how you would read a credit report, how you would look at collateral. That might be a little bit different to one culture than to another, or its commonplace to a culture, but its foreign maybe to, if youre not part of that. So it seems a great growth area, obviously, in our country, when you bring in a loan officer, how important is it that they have a community that they associate with locally or how do you promote that?
[00:13:07] Speaker C: I think for us it's been very important. The identity, I think through its strategic planning over the last 24 months of reviewing all of a strategic goals, finding our identity before it was just trying to recruit anybody that just crossed through the street. Can't work for us, can't work for us through learning our identity and understanding it.
We don't do that anymore. So we don't bring just anyone.
We're using data. We're talking to the people that we want that aligns with our value, that aligns with our culture, that when they can come into city lending, we can immediately take them from a to c in, that means culture, that means products, that means what they're looking. Right. So we got to be very, very precise because we don't have time, we don't have energy to fight every single battle. We got to be very, very specific because we don't have as many resources as we want. So we're working in scarcity. That's what we're doing today. But, but looking to that, when we bring a loan officer, I think that the mindset is very prepared. They're just very identified with our culture, with the latino market. We know that either with the latino market or with our product mix or with our channel, with our strategy. So I think it's very easy that that person can come and thrive into the organization. Makes sense. Mike? Yeah.
[00:14:39] Speaker A: Do you look at it in your path to where you're going? Can you use data and sort of map out like a sports team saying, if we draft this branch or this location and we put more density in?
I was just looking at a couple of presentations by Ie mergent and their ability to predict down to the county level where really the purchases are coming from. And then you can obviously look at what type of loans you're going to be doing. And are you able to look at the board and say, if we are able to recruit this group, this group and this group, that's how we get to where we want to go?
[00:15:20] Speaker C: Yes. Yes. I think we have data vendors out there that we leverage. We have it connected to our CRM. We leverage data. We breathe data. We go through the data so fast. And sometimes our vendors, they're like, why do you want more access? So we leverage a lot of the data. I think many of these vendors are available to every single of the mortgage bankers, brokers out there.
We just try to, we choose data for everything that we're doing. B, two c, b, two B strategy for a retailer wholesale that we're trying to do. So nothing. I think data is super, super important. And we are able to map, you know, all the, all the tango trees have all the Hamda demographic, all the Hamda data, they're available, right? So all these data comes handy. You will know which Realtor is talking to this loan officer with, you know, how many, you know, these loan officers. Why are they agents that are talking if they're Latinos or not? So when we look at as a strategy based, we look at as a whole, right? Not just about recruiting, but as a whole. So I think that's, that's super, super.
[00:16:24] Speaker A: Important for us as you culminated together.
What does that become up like? What is the north star of Citi lending? What is the vision and the goal?
[00:16:33] Speaker C: So our vision man, for the next four or five years, we want to grow about three to four times.
We want to position ourselves on the top 100 lenders. We want to be the preferred hispanic Latino lending lender in the US. And that's our vision.
[00:16:51] Speaker A: Awesome. I can't wait to watch that journey. Michael, do you have any follow ups?
[00:16:57] Speaker B: Just listening right now.
I just think of like the three, three words I have to think is like, number one is focused on what it is that you want to accomplish. Number one, the focus on the growth of the business, the focus on getting things done, and the focus on targeting to a certain type of demographic, not just in culture, although culture seems to be a part of it. And thats going to lead me to my second one in a second, and then staying focused on being a complete independent mortgage banker that has a wide variety of products that are available for their originators so that they dont have to think that there are really other options available. So I appreciate that focus with the company is really good. The second adjective I have really is the focus on how to cohesively keep everybody together, because you're focused on your demographic in the latino community. And so I would say it's family focused at this time, but I haven't seen your entire food chain of who's working for who. So I'm not able to go directly into it. But it seems like that you do have that culture, and with that culture comes a lot of how do we maintain the integrity of the business while maintaining the integrity of the latino culture? And then as a result, and I know this because my wife is latina, and so I would say that you have a lot of fun with this. And the reason is because I would say is because it's really easy, especially the course of the last year and a half, and even when you began to enter into the business, when you go through 2008 to 2015, and then when you go through 2022 to the present day, there's a lot of drama that comes along with that. And so the fun you have to have a lot of fun to say, hey, you know what, not only are we offering it to our demographic, we are also going to give you all the products that are available and the financing rate and terms and this and the other. It's going to come, you just have to be able to trust that process. So you have a lot of fun with that. And I've noticed that, at least so far in what I've read and what I've seen in your videos. It's so when you have focus, family, and fun, the culture that you're bringing along with that really just blends really well. George, what do you see going forward for the originators that you would like to bring aboard? Cause we had some background conversation, and you're mostly on the east coast right now, but you're still growing. So what do you think it takes to reach that community in the midwest? I know there's a lot of, there's immigration outside of California into the midwest and east coast and that. But there's, of course, a large, large, large hispanic community in southern California, you know, speaking to those that are in California or even on the west coast or in the central part of the United States, maybe Texas and westward, you know, what do you think it takes in order to expand into those borders so that you can speak to them and say that not only are you growing, but you'd like to expand the corporate culture outside of what other Imbs may have into what you have to represent for yourself?
[00:20:12] Speaker C: Well, I think we're trying to expand our market share to get to those states.
We are licensing about 30 states now, and hopefully by the end of the year, we'll be nationwide.
We're trying to do it through retail. We're trying to also do it through wholesale. It's very interesting how our wholesale channel is growing as well.
But the most important thing is, through last year, year and a half, our identity has been taking shape, and everything is more congruent into our organization. The way that we think that we align more with what we express. I think by the end of the year, we're going to be focusing a lot into reaching out to more latino long officers. You know, it's not, it's not, you know, recruiting is not that easy.
And I'm just telling you based on what we're looking, because all the Latinos were very loyal, okay? We're very loyal.
We shake hands, we go, you know, go see the sports with our friends. You know, we go to the house of our branch manager. Those are our friends. So latino, latino community, we flock together, right? We have a team of people, so it's not that easy, right? And pretty much when you're asking a Latino, hey, come, come work for us, is they have to trust you. They have to put their family into your hands. You have to be the leader. So I think you got to be a balance for us into doing it through that cultural way and also be very aggressive into pricing and rates so all can be combined. Cannot just one another will not do. It has to come all together. And that's our plan. We're going to keep on working hard towards that. Hopefully by the end of the year, our strategies for recruiting are going to take more shape.
[00:22:21] Speaker A: So you have a real technology vision.
Before I ask a couple of technology questions, did technology come to you naturally or is it more mortgage technology that you've learned through what works, what hasn't? Or is it the fact that you have a team now and you think you can deploy it in advantageous ways? What do you see as the benefits of technology for you versus your peers? And then I suppose, what do you see as the challenges of technology for the entire industry?
I'll give you a hint. Like adoptions clearly always been one of them, whether it's day one, certainty or use of seats.
Well, I guess what would be the advantages? First, because you do have a technology mindset and that does help you go coast to coast, obviously a lot easier if you can break through the loyalty.
[00:23:21] Speaker C: I think technology is key.
I love the current environment where it is, because being an IMB, a small IMB, wanted to transition always to the bigger leagues to produce more loans, looking at the cost of manufacturing, how I'm more competitive, how can I compete with the bigger guys, right? And right now the environment is perfect because many, many years ago, many years ago, I would call a technology company and says, well, this is the threshold. If you don't close as many laws, you will not be able to get this. And then the technology gets limited.
Yes, we have a team of maybe ten people right now. Our technology team, marketing team, 15 people have a very executive team that we brought them on board to keep on designing our technology and investing on it.
But the good thing today in today's market is that the technology is available and it's much cheaper.
What AI is doing is making it accessible. It's not so much about what the technology can do. Yes, can do so many great things. It's accessible. It's accessible for a small IMB who can take that technology and compete with the big guy. So I think the bigger guys are going to be in trouble later because we're going to catch up eventually.
[00:24:48] Speaker A: Yeah, that was the saying at the housing wire AI conference was in his name.
I'm not going to be able to pronounce it correctly. But up on stage, he pointed out that he saw AI as the chance to really go after the big guys because it leveled the playing field. And anytime something like this pops up, it is your chance to, to get ahead. And I would say AI that I've seen the for, not for mortgage companies because a lot of that is in operations and everybody thinks they have the, the magic winner. I say go to adopt the brand. Mortgage insider Mike Kelleher, he'll tell you really where I would say, like the conferences are the prom, right, and so, or the business card picture versus the real picture. So. But I do find on the loan officer side, so the people that are working, you know, on the front lines, all of the software that you can buy, not even technically mortgage related, but outbound related AI has just done in six months for those softwares. And you could take well known ones like Loom or canva or calendly, or you could take less well known ones like smart lead or clay and what is compliant, not compliant, not completely going to go down that road. But all of them have advanced so much in the last six months because of the AI APIs that we talked about it earlier, a skilled loan officer now is going to become a real thing. And it won't just be knowing your underwriting guidelines, it'll be knowing how to use some of this software to scale versus calling and no one's picking up the phone 100%.
[00:26:32] Speaker C: I mean, I was talking, Jesse, with our CIO and our, we had a digital product manager consultant that was helping us and we're talking about digital products.
[00:26:45] Speaker A: Right.
[00:26:45] Speaker C: And we believe that there is an opportunity for creating a product for loan officers to do their work on their own. Right. Without the need to deal with. Call the marketing team. Call what strategy I'm going to do, what activities are going to do if we are able to map it all together through our CRM and through everything through a business plan, identify to that loan officer. I think that's a great product and we can do that, all that today with technology, with very accessible technology. Right. I mean, so I think nothing. I think technology is the key, but it's not going to solve, technology is not going to solve the problem by itself. I think it has to integrate into the DNA, into the organization of the loan officer. Right. Using it to scale more quantity and quality. Right?
[00:27:35] Speaker A: Yeah. Mike and I are going to start getting into the market of helping you imbs pick top loan officers, help them get their podcasts off the ground, and AI takes care of the obstacles that typically would slow it down. Writing the description, getting the SEO of, say, city lending what it wants to be and not going back and forth for a month and never getting it going. But like you said, the other two thirds are the motivational part. Just like you with your loan officers. Like, there's so many days that Mike and I say, oh, well, you know, this guest backed out. Should we just skip it? It's, no, let's keep going. And you have to. And we talked about it on the show, just about this. Just like a gym partner, if we didn't have each other, like, there's always one that's like, shit. And the note, let's go. And the next week, it's the opposite person. Let's go. And also we use offshore. Um, and the person we use started not knowing anything about the mortgage industry, and now, 70 weeks later, getting to listen to people like you who are, hey, he probably knows more than. He definitely knows more than any other podcast editor. And so that we're able to integrate that in. And I still think the AI piece, though, is for the outreach. Okay, shows done. Now you can scrape lists, you can warm up emails, you can run them through neverbounce, you can avoid domain problems, and you can get your podcast out. And as a loan officer, you can almost get your podcast out, not under the mortgage company's domain. So you don't have to risk any of that piece. And you can get the outreach because podcasts are just considered podcasts. Right? So agreeing with you, the AI is in the outreach, but I'd say it lifts a lot of the parts where people get stuck, but you still need to integrate it into what makes you successful. So with that question, and I already asked it once, but I'll ask it again to give you more chance to dive deeper. What does make you successful around delegating work and delegating operations, but also delegating leadership as you expand your footprint, man.
[00:29:47] Speaker C: Okay, that's a great question. I love that my wife tells me I don't delegate enough. Okay, so let's put that clear for her. I still have work to do, so I aim it. We like the long walks and all that, but hopefully one day I can meet all her terms. But I think the way to delegate is trust me, is empower people.
Trust, trust them, build them, let them fail, you know? And I know I'm not gonna be 100%.
I have to be okay. Knowing that it may work to 90, 80%, and then I can empower these people, these managers, these team members to the hundred. Right. But I gotta. I gotta be okay with them starting at 60 and take them there and not actually take them it's like showing the way so they can take themselves there. Right. I think today what we're doing at city lending and we call about cultural transformation, it is that, right.
It is building, expanding our circle of safety where people can take and give feedback.
And that's super important. I see our management team talking about that, applying it into their teams, expanding their circle of safety through all the organization.
And I see them growing. Right. And I think that's key for delegating part of the leadership piece of trusting.
And there is a lot of, a lot of people right now in their work, in their position, they don't feel safe about their position. Am I going to be laid off? Am I, you know, what is going to happen with me? Is my position going to be cut? So I think building that circle of safety is that they feel good where they are, they understand your vision, they understand the objectives and they feel related to it and they can thrive. Right. So I think all of that together is what it helps through the leadership to delegate. Now, of course, with more of systems in place, agile methods build measured feedback immediately, tools that we can use. But the most important thing is the people, I guess, right?
[00:32:21] Speaker B: I love that because, because what you're saying is feedback is the breakfast of champions.
And the energy you get from the feedback means that you can draw on success as your lunch. It's okay to fail because you're only focused on the success and you draw from the success because you're willing to take on the feedback. And because of that, there's a trusting of that process and that's the result of having feedback being the breakfast of a champion. What do you think is the, how do you, how does that translate into your support staff? I mean, for salespeople it's make more phone calls, make more appointments and make more, make more actionable money making green activities so you can do that. How does that translate into your support staff? So that your support staff can also receive feedback productively from the sales staff. And then as a result, because you're growing and the success I'm seeing is actually very positive. So how does that translate in your support staff?
[00:33:23] Speaker C: Well, I think it's the same. You know, we either your sales, your operations, your support staff, all the organization has to be aligned and that's when you align your strategic, strategic planning. Right. So I think it's the values foster communication, team collaboration, engagement and through, because, you know, to innovate, to improve your processes, you need sales to talk to production, production to take your sales and go back and forth and improve. Right. So I think is the, you know, we do it through that, right? Pretty much promoting communication, promoting team building.
We do, sometimes we do some SWAT analysis there to identify strengths and weaknesses that we have. And out of that we take action plans. And it's very awakening when you see people going through that, listening to what their peers are thinking, the partners are seeing get feedback. Right. When you have the right mindset, when you're vulnerable, you can take the feedback and run with it.
I think through transformation comes within yourself. Right. So as long as the managers, the production team, the support team understand that it's important why, how they're going to impact, how they're going to influence. I think that's what we've been successfully doing in Michael.
[00:34:48] Speaker B: So two days ago on the Halogen Wire podcast, James Kleiman was mentioning that one of the, one of the aspects of, currently one of the successful aspects of growing imbs in this marketplace has been servicing. Is Citi yet implemented a servicing aspect into the picture?
[00:35:09] Speaker C: No, we don't. Pretty much all of our revenue, our net income today is primary nations.
That's how we do it. We are in our process to apply to Fannie and Freddie.
You know, we were ready to do it, but in 2022 we have some quarters that we lost some considerably chunk amount of money. So to apply for Fannie freight, you need to have six profit over quarters that we have already. So I think we're going to be looking into that very soon.
[00:35:44] Speaker A: What about helocs? I guess on that area, do you find, and I just mean from a cultural standpoint, do you find helocs are looked at any different from a latino community than.
Because based on won't touch equity, maybe the parents told them or use the equity to be entrepreneurial.
Not that many mortgage companies, even if they know their customers do HeLoCs have, have really figured out a way to incentivize the loan officers to actually do them. But to me, and you've heard me say this on the show quite a bit, I'll give you a chance to think about that.
Tapper always says, and if it applies to restaurants, it has to apply to almost every brand. But if you can get one person to go to a restaurant, there's like 32% chance they are, they're likely to come back. And he says, you know, give them a certain color napkin and treat them like gold. So everybody knows that's the first time. Give them a coupon so they come back the second time and you know that that's their second time, because that second time it increases, but it only increases like 38%.
What's fascinating is if you can get somebody to come into the restaurant three times over, say six months, that number then goes up to they're 78% likely to become a regular customer. And so I always try to relay that to mortgages. And if you were able to intertwine a second in with a first, you're much more likely to get to that three than just firsts. But I guess culturally speaking, is that an, is there any difference, do you think, in how, you know?
[00:37:24] Speaker C: Yeah, like I think every product can thrive under the right conditions, meaning, you know, strategy from the company and so on. Right. I think the latino community, if you explain it to them, the benefits very carefully, they trust you. That's a problem that they will buy. But it's very important if the organization is really pushing for it, if it's one of the main strategies, if it's going to affect the compounded margin or not. So I think the HELOCs, we don't do HELOC, but we do sequence, we do seconds and we take advantage of the non QM seconds, very flexible with the p and l only and the 1099, the alt a dog. So we do them. It's about 1015 percent. Right. But very small, long amounts, the gross margin, the contribution is not there.
[00:38:26] Speaker A: Right there.
[00:38:26] Speaker C: So if you see an organization, unless you have a consumer direct that you go from corporate direct to the consumer, you will be leveraging those products a lot. If not, an organization that is p and l only or branch retail is going to depend a lot into what data strategy at the branch level is going for. Right. I dont know if it makes sense to you, Mike.
[00:38:47] Speaker A: No, it does. But it brings up a quick question I have for maybe a broader audience here. What do you see as the future of self employed borrowers and gig economy borrowers?
Do you talking to them like they're for, where do they start when they sometimes hear all this and feel like they're not part of it? It sounds to me like more programs are coming out. I noticed you said P and L.
If they are a, let's say a landscaper or an Uber driver or a carpenter, how should they be looking at this mortgage market a little bit differently than two years ago or four years ago?
[00:39:26] Speaker C: Well, you mean from the consumer or from the lender?
You know, listen, I think, I mean, I think self employees are very good borrowers. I mean, they have a lot of cash flow. I got a lot of residual income.
These are the borrowers that are less affected if the interest rate goes up and down one point because they have enough cash flow to do it. So let me share a little bit of that. We are very focused into the it community. Okay. The it and loans, we do them a lot left and right. We close about 130 million last year and we're increasing 30% this year. So we, we do them through Itin loans. We have the ability to do PNL only.
We can go up to 96.5 in loan to value. Right? That's a required to match. We can, we can use these side jobs, geek jobs, whatever it is, one day in the new job. We can, we can. We have a lot of flexibility on that.
But what I learned on this process is that self employed borrowers on the Itin community, a lot of good credit scores, less than 1% default. And as long as they're there to stay, keep good record. I think more investors are going to be launching more products.
We are partnering up with a bank right now where we're going to be putting our own cash and they're going to put in their cash. We're going to push the ltvs to maybe go to 90% to value and more. Just because we understand that community, latino community with self employed borrowers think they pay on target.
[00:41:20] Speaker A: I'm excited. I mean, I know this is almost more Mike's world, but I have a client sapiens decision, which allows lenders to really write decision models in ways they couldn't write them before. And I think it brings hope to the idea that you can create new product like you're saying, and get back to the days where some imbs, like mortgage investors group, they're a top IMB. We've had Chrissy Ray on the show and she really got started by creating her own products and having ones that she was able to know her risk and grow by having something different in the market without being too radical. Just a little tweak here and a little tweak there, and became known as somebody that brings product. And I think maybe the whole rates keep going down. People got away from that and it sounds. I'm pumped to hear that, or I think more people should be asking you questions about that. But I think that that's a cool new direction.
[00:42:24] Speaker C: I love that. Yeah, basically what you were saying right now about nothing radical, just picking it here, taking it there. We're going to be launching a product pretty much exclusive to us. Just tweaking here, tweaking there, talking to our investors. We're going to launch it about 60 days. I think it's going to create a little bit of noise I will share with you guys once we launch it. But, yeah, I think keep on innovating is key in this market.
Keep on moving, having a lot of strategies, attacking in different flanks.
I've been listening to many leaders where they want to focus into Capcom. Let's just focus into this market. But I have a lot of respect for that. But I think in this market, with everything is changing with so much volatility, you got to be attacking into many flags as possible. So to keep navigating it as well, one way or another.
[00:43:22] Speaker B: Do you think you can offer, as an independent mortgage banker in a larger space, do you think you could offer more private money, loans to the general consumer? So, for example, the reason I say that is you can't give an FHA, two or three k loan to an itin, right. But there are plenty of opportunities on the east coast. Well, all over the United States, really.
[00:43:50] Speaker C: Michael, I'm gonna have to stop you there, because I'm pretty sure.
[00:43:53] Speaker B: Am I letting loose a secret here.
[00:43:55] Speaker C: That may be coming. That may be coming. So you are there. We're gonna make. We're gonna take some, you know, I'm gonna. That may be happening, but this says, I will tell you more later, that we believe that we're bringing that with a lot of training. We're going ten x. We're gonna put a lot of effort and training and education to our latino community. And I think that is an underserved community in that rehabilitation loans, you know, that size. We're going to be coming very, very, very strong on that.
[00:44:30] Speaker B: I know that you want to stop me, but the reason I'm saying that is right now, I work in the family office space, and they call it dry powder. Dry powder is the money that it's not in checking, savings or bonds or money market. It's literally just cash.
And I think it's exciting because we'll be able to have further conversation, even behind closed doors, on how you'll be able to get that product in case that you, you know, maybe you have it on your warehouse line, but you want to figure out how you can, you do more business and sell it and so on and so forth. So I think that we'll be able to have future conversations about that, because what you're talking. You know, because you're stopping me. I think that the, you know, there's some secrets in there that internally, and I don't know anything about it, by the way, for our listeners, by the way, this is the first time we mentioned it on the air.
[00:45:16] Speaker C: It is. I'm just surprised, but I'm very interesting.
[00:45:20] Speaker B: It's because I talked about it with Michael Kelleher behind closed doors, and we've been. And actually, this is something that's been ongoing for the last six months for us. And so when we're able to introduce it to you, I think after the show is over, I think you're going to be pretty excited because it's an opportunity not only for city, but it's going to be an opportunity as a profit center, by the way, but it's also gonna be an opportunity across the board. And maybe you can help extend that cause, because I'm not just talking about it selfishly for Citi. I'm talking about expanding this into the latino community.
Well, not just Latino, but across the board. But I'm just saying, because you reach the latino community, you can bring this out there and really spread the word that there are other programs that are gonna be available.
But at least for the time being, this is the first time Im hearing of it for you as an independent mortgage banker, that youre actually actively going to give it to your originators and say, this is what we have for our entire team, not just this submarket and everybody elses were going to experiment with it, but youre expanding this to your entire team. This is the first time hearing from it, from an IMB. So Im excited to hear from you and to our listeners. You need to stay tuned because this is going to be exciting news for Citi and all the, and for all the, for the midwest and the west coast that not yet signed up for Citi. You're going to be excited about this because I know, I think I know what's coming, and it's going to be great for retail because right now they haven't had that opportunity. And I'm excited to hear from that. Although one thing that you may be missing from what you have right now, maybe that servicing component that you don't have yet for client retention, but I think that's also potentially on your horizon. Maybe you just don't know yet, but you have to succeed forward to do that. Right.
[00:47:09] Speaker A: Wow, Mike.
No, that, that's, that's amazing. Um, let's. So I just wanted to shift real quick to customer experience and how you look at it. This is something that I think, um, at the end of the year, once we get through our guests, uh, I want to dive into deeper with Mike.
Don't want to put guests like you on the spot or make it a reflection of you, but I think the whole customer experience in mortgage definitely needs an audit. I think it's a lot of people.
[00:47:44] Speaker C: That 100% I agree with you. I think that the only way, I think customer experience is super important because it's the feeling, it's the feeling how it make you feel to the agents, everyone. We're nowhere close to be perfect, but we wanna improve.
We're talking right now with Stradmore. They have a great CX starting platform and I think they bring a lot of clarity. We're working into engaging with them and implementing it.
We're gonna start bringing people inside to, hey, we have a digital product manager who's gonna be bringing looking into the UX Ex and the CX everything altogether. But I think it's Stradmore, you know, for whoever is listening, they have a good stuff going on, built already out of the box. We're gonna, we're gonna be, we care about the CX, Michael, for sure.
[00:48:38] Speaker A: Yeah, they do. I think I'll get on my soapbox for 2 seconds here. So what they do is they actually go out there and ask customers questions and do customer surveys. And I think what this industry got started to get into was taking a programmer's word for it, whether it was the leader of easy mortgage apps or the CIO that you hire. But they were giving advice on what they thought without actually asking real customers, interacting, which isn't very hard to do. It's just awkward. It's a little awkward to get done and then you don't want to do it with your own client, etcetera. And I'll give you a, I'll give a tidbit for our audience.
I have a client that as they were building a certain product, went out and applied with 20 of the top lenders in the country, and they went through their digital mortgage experience.
And of all 20, the earliest somebody called them was in three and a half hours, which if I told any lender, they would say, that's not us, we do it in a minute. Well, obviously this is consumer direct, right? I would assume so. There's obviously a different world there. But something I do think applies to retail is every single one of them, when they called, reviewed the 1003.
So imagine you're a borrower and you spent 45 minutes doing the loan officer's job of filling out the entire process. And rather than calling you and telling you potential obstacles, what they think of the file all 20 of them called and went back through the entire 1003 with them, and that was the experience of every single one of them. And I think most lenders do that. And that is just a horrible breakdown because no one actually tested it out. But if you just spent 45 minutes doing it, you don't want to be on another phone call, spending another 45 minutes going through it. You would have rather just called in the first place. In fact, you probably just don't even want to be on the phone. But anytime they could get you on the phone, rather than going through programs, most of them would maybe lead with a couple of programs, but then at some point, had to go back through the entire 1003 verbally. And maybe that's a.
Maybe that's a QC piece that's been taught, you know, and that isn't avoidable. But from a customer experience standpoint, until I actually heard that, I never thought of that. And now it makes total sense that it is going to change because there's a lot of AI coming out that's going to be able to read that. That's an example of AI improving it. And then tell the loan officer what to say, because don't forget, the loan officer is trying to reach within two, two to four minutes, so they need something to talk about, right. And the only thing they knew to talk about was read the entire thing back to them. Um, that would be an example of somebody saying, oh, well, our, our digital look looks great, right? Like, it looks great. It's still 265 clicks for them, but it looks great. I. Versus actually getting into their shoes and saying, oh, yeah, if I filled it out. Because what happens is, and I always said this with the mobile app, everybody assumes in a vacuum, so they're like, oh, the customers, you know, filled it out. Filled out my, my XYZ pos. And then you call. If you actually went through the 45 minutes of doing it while driving around and pushing the kid on the swing and running into some problems with the. The asset verification, having to reset your password five times, that's when you're in the mindset to know the true customer experience. Then that loan officer calls you four minutes later and goes through everything again, and you're like, well, then I wouldn't have. Wasn't like, I just sat there and did an evacuate. I was running all around town doing this, and you're telling me that? So when you said and we were talking the notes, like, you really do care about customer experience. You're obviously hiring now to. That shows that you're going to invest in that. And even better, which we didn't know about.
Free shout out to Stratmore group and them getting Jim Deitch is like, you know, advice on steroids. Now, like you, you're obviously going in the right direction and I commend you to that. And if you want to tell loan officers that are looking into city lending anything extra about how you care about their, because their customers are their family members, they're their co workers. That's who the loan officers customers are. If you care about it that much, I would say you're ahead of many of the others that you're trying to.
[00:52:55] Speaker C: I think it's super important it goes aligned with the brand. I mean, you know, the brand is all who you are, right? When you are not there, the brand is who shows you up. Right? So your brand, the feeling and the experience is related to the feeling. The way that you communicate and all that is super, super important for us at Citi lending. We calibrate a lot with our branch managers all the time. We calibrate a lot with our sales and production team.
Right now we're using technology like Salesforce, try to implement CSAT, trying to implement NP's and getting live data to keep on providing feedback out there, right.
But that's part of the cultural transformation, right? Not everybody get it. And you know, we're trying to make sure that we can align all the organization with what is super important like, like the brand and like the customer experience that you mentioned.
[00:53:52] Speaker B: Michael George, theres one demographic actually that youre actually leaving Al completely by accident and its a result of the, because of your company culture and youre actually leaving out elementary kids, junior high kids and high school kids, even certain college kids. And the reason I say that is because being in San Diego working with Latino borrowers, im able to speak a little bit of Spanish and stuff. And I say that because, you know, there's a lot of translation from the younger generation who speaks Spanglish into translating financial documents into maybe parents and family members that don't speak English. And when you, and if you focus with maybe spanish speaking originators that speak directly to the customers, they're actually leaving the kids out of it.
So as a part of that customer experience, actually by accident, you're leaving out an entire demographic. And actually I'm going to tell you right now, what I've seen because I've been doing this for 25 years is that the families whose kids were once translating for them, you've now left them out and it's not that you're not robbing them of an experience, but partially, you're actually not giving them that education where they actually have to be forced to learn as children. Is there something that you think Citi can do as a part of the customer experience so that when you're doing your marketing forward, and, of course, you're speaking to your customer demographic, that you can actually now reach out not only as a company, at a company culture, but in the future, that you can also reach out to that younger generation so they can have financial literacy, homeownership, expectations, that there is hope, and the willingness as a Latino or Latina, so that they can have the dream of home ownership not only for their family, but for them as well in the future.
[00:55:49] Speaker C: I think, Michael, that's super important. I think we're dealing with that already. I mean, when I was a loan officer, I would have to speak. I will be sitting there taking the long application. I was sitting with the first generation immigrant and the kids, and I will have to be. I will be. I'm bilingual. I have to speak to the parents in Spanish, go to the daughter or the kids. I said, do you understand?
So I think the way I see city lending is we're fully bilingual, right? We speak English, we speak Spanish. And I think part of our mission that we communicate a lot to our team members is very clear.
Our mission is to impact positively our communities either in English or Spanish. We're doing that. Our marketing efforts, everything based just based on compliance. It gotta be in Spanish or we have it. We have it on English. So when somebody comes into civil ending, they have flyers in English, in Spanish, it can be bilingual. So we do all the business internally, city learning in English. But the way that we communicate with, with all the communities, with all the team members is in English and Spanish. And most of the time I went up at is we give them the opportunity to navigate in any language they want.
[00:57:05] Speaker A: That was an amazing question, Mike. Like, an amazing answer, Jorge. Like I would. That was a real cultural nugget that you would only know if you've actually been in the trenches and originated there. I'll give a shout out to one of my clients that I fell into. Like most of my clients, they're referrals. But Velex valuation is one of the only appraisal firms out there. Most companies are AMC's, right.
And most lenders use their own direct desk, but they often go to 1099 appraisers. This w two model of having an appraiser that is part of an organization and really trained with consistency and communication and actually has a boss but has benefits, has PTO, has that mindset of consistency. Im a 1099 so Im not knocking ten, ninety nine s. I would just say w two employees like when ive been one, its just a more consistent lifestyle. Something like that is not digital.
But Im now being on all these calls and realizing the little tweaks like that are big customer service tweaks that a lender can make without needing a digital overhaul. And I say that because as we get more digital and we are on zooms and we dont meet them, sometimes the appraiser is the only representation of city lending in person that actually walks through the house and represents you to a degree. You like to call them third party, but as time progresses, they don't remember that. They remember that experience as part of the mortgage process. And that's where I've shifted a little bit on, on selling Valix valuations and saying a better quality appraiser costs you no extra money, no change management, and improves your customer service, in my opinion, exponentially. And I hope that I fall forward into other categories in mortgage that the little tweaks here and there of things people have been doing for the last 50 years can actually equal better customer success. It's because it's a, it's a new model, just like you're going to have a new model of a product, Jorge it's a new model of an old, an age old piece. And I think, and I hope there's other areas like that that aren't just digital. Obviously digital. Enotes everybody's going to eventually, when that thing flips, it's going to flip. But that's a big overhaul technology wise. Your product manager is going to have great overhauls upfront on better digital experiences. But what are some old school ways to just have a better customer experience using what's in front of you? And I think you can only find that out. I'm learning now by challenging the people in your company that don't get to be part of innovation. And I worked with Infosys and we interviewed like a lot of people in that mortgage process. And as we got further along in the process with some of these companies closers, Wink, wink. I found out, like within these companies, no one ever asked them for their opinion. They, all, their ideas ended up becoming the ones that the company never got to by the time the piece went down. As you went further away from the transaction, they had great ideas on saving money. They were and I was doing the focus groups and they just started to get frustrated that and some of their small ideas never came into place. But those people. And this isnt going to be a question, Jorge. This is kind of a comment on our own show here at the end. But, but those people are where you could find, I mean thats where I found this one. In an appraisal department, I usually talk to CEO's like you but I was able to get down in the weeds and say oh, theres a customer service piece that you could tweak. So I hope and I challenge.
[01:00:42] Speaker C: But what you're saying is important. Like Toyota. Toyota as a manufacturing company, they're very successful for what you mentioned. Go and look for yourself. So go. It means go to the executive team. Go and look down there on the trenches. You know what's going on. And that's something, for example that I've been promoting into our map into our product development team capital markets. When they're building the sops that get feedback like go and ask the users one as the people ask the client pick up the phone. Even for our marketing directors like talking about the NP's, hey these are NP's why it's not working. Go and take it and ask them why they're not using it. Right. So I think what you mentioned is super, super important. It's key for an organization to, to get the feedback from the bottom to top. Right.
[01:01:28] Speaker A: Very well said. We'll have to find a book with that Toyota piece in it because that's, that's a, another great analogy, Mike. Any, any piece before we uh, take this one home and go off to our mic, duck, uh, taping.
[01:01:43] Speaker B: This has been a great show so far.
[01:01:46] Speaker A: If you're listening, subscribe on Spotify, subscribe on YouTube. But if, if you could, now that we're on Apple, any comment you can make about what you liked about the show, what you like about mortgage, what you like about us, that would be really cool. I am so proud. We're on the Apple podcast. Now. Please comment on this show if you're listening. And yeah, any comment would be awesome. Sorry, Mike.
[01:02:10] Speaker B: Demeaning the drop. No, definitely. I was going to say the same thing. Like comment and subscribe.
[01:02:16] Speaker C: Thank you. Thank you, Michael. Thank you, Mike, for having me. I enjoyed this show a lot.
[01:02:20] Speaker B: Yeah, likewise.
[01:02:21] Speaker C: For sure.
[01:02:21] Speaker B: Looking forward to seeing how we can have conversations in the future. Behind, behind the podcast, the after show, the after party here.
