Episode Transcript
[00:00:00] Speaker A: Hello and welcome to another episode of Mike Dub show. If you're listening on Apple, Amazon, YouTube, Spotify, we thank you for listening. And we also host it every Thursday at 02:00 p.m. eastern.
[00:00:14] Speaker B: And of course at 11:00 a.m. pacific in sunny San Diego on some of.
[00:00:19] Speaker A: Our different channels, Instagram, Facebook, LinkedIn. We do that so that one day, and this is our 75th maybe episode in a row now, but someday, you know, the audience will participate more and be able to ask questions. But we're also getting more high profile guests like Rick and Brock, where sometimes they want the questions ahead of time. But you guys, because you're known for real Fridays, you said, we're going to go live. We don't want the questions ahead of time. You guys want to start by telling us, yeah, you didn't have to go.
[00:00:55] Speaker C: Through Rick's booking agent this time.
[00:00:57] Speaker A: We still have to go through the booking agent. Yeah, but we didn't have to pre screen the questions. You guys wanted to show kind of what, what our listeners could. Where can they find you guys on Friday? Our audience would be loan officers or mortgage leaders. A little bit of both we talked to.
And how did you guys come up with it? Like, or where did you guys start to get momentum on being able to pull it off?
[00:01:18] Speaker D: I don't know whose idea it was, actually. With real Fridays, it may have been kind of a brainstorming session for Jeremy Potter and myself, and then I think we may have looped you and Brock or one of the scenarios, but I think that the issue is, in so many of the podcasts, there isn't enough real concrete inside the mechanics of the mortgage industry, in housing, and how the industry sort of operates and executes, other than just a lot of platitudes and marketing talking points. And so since we're in this always process of operating in it, and then we're trying to change it, and then we're trying to sort of direct it down like a new path for homeownership, either in technology or in product.
It just was a great chemistry between Brock, Jerry and I around real estate, tech and innovation, and the Brock side coming from Rocket, and then the legal innovation, tech and mortgage, uh, side of it from Jeremy. And on the retail, mortgage, banking, and the finance side, uh, for myself, yeah.
[00:02:24] Speaker C: I was going to say, uh, Potter and I have, have done a lot of things, kind of that we collaborated on in the past. We worked together at Rocket for, like, probably we overlapped for five or six of my seven years there and, uh, and at one point, we actually did a podcast, the two of us, but didn't. Didn't think it was well enough, kind of rounded out, um, in terms of bringing guests on in terms of any kind of audience participation and kind of in that interim time period, both. I mean, Jeremy and Rick knew each other, I think, but I got to know Rick through Jeremy, so, yeah, I think it was pretty natural. We also saw that people were having success with live events on LinkedIn and live participation. Like this one, actually, in fact, I think we started probably a month or two after you guys started. So I think we took some notes from how you guys set it up as well.
[00:03:11] Speaker D: Now, does this automatically punch to Apple and Spotify, or do you have to upload it later after the show?
[00:03:16] Speaker A: Yeah, we have a team that does the audio part and everything after. In fact, we emulated you guys on the video part, because we really were committed to becoming. I don't know if you guys know this, but I really wanted to have, like, the first morning drive radio type mortgage show in the industry, or maybe not the first, but. And LinkedIn audio just did us no favors whatsoever. The show was, I will say, people did jump in a little bit more.
[00:03:44] Speaker D: Say that again. The first LinkedIn audio radio show for the link from the mortgage industry.
[00:03:49] Speaker A: Yeah. Mike and I met through clubhouse. So I had this idea. When remote goes away, people are driving to work, and they knew we were on every morning from six to nine. Right. They could call in and we could do. I still think that could happen in this industry.
We were trying to become or test the waters with that, but we had to move video, because LinkedIn replays the videos on people's feeds, it. It doesn't end it. Not only does it do all these great things for the videos like that you guys were doing, and I noticed it was doing no favors on the audio, which was kind of driving us.
[00:04:26] Speaker C: Yeah, the video live on LinkedIn, most people see it afterwards, but we tend to get a decent amount of comments during the show. So, yeah, it's worked out okay. And we kind of just kept it as simple as possible so far. So maybe we'll figure out how to get it. All the places you guys have your show.
[00:04:42] Speaker B: Yeah, I found that the. The hardest part, and I learned this through clubhouse, the hardest. The hardest part of these shows, whether it's your show or our show, was getting audience participation, you know, and because a lot of the. If we got. If it was like, a sales type of situation, if we got. We got 1% of the actual audience that listened to actually chime in and ask more questions, we'd be winning. But I think the people who actually chime in versus the people who actually watch is like. It has to be like a half of a 1% or even less.
[00:05:14] Speaker D: That is the tough. It's, you know, everything's on demand, and people want to watch things later rather than, you know, coming in at a certain time. So it's, you know, the. The trailing effect and the impact you guys have in the days and weeks after you guys record and publish. As far as more substantial, obviously. I mean, you watch ours, like. Like at two in the morning or when, you know, it's like midnight.
[00:05:35] Speaker A: That's way too early.
[00:05:36] Speaker C: At least that's our. At least that's when you text us about it.
[00:05:39] Speaker A: Yeah, yeah. I just like. I like that yours is on Friday, and since I don't really go out on Fridays, it's like my parents with radio. I can sit down in front of it and watch it at night, and I find it. I like your. I love your show. So I'm glad you guys came on. I want to dig deep before we go real into the industry. We do have Brian here. We have some people here at the audience. I wouldn't. Okay, can we do that? Brian could jump back here if he wants.
If you want to jump back here, Brian, feel free. We just got to figure out the framework, I guess.
[00:06:12] Speaker D: I guess it would be easier to. It would be easier to have Brian move than for me to move.
[00:06:19] Speaker E: Hey, guys, give us a stick.
[00:06:22] Speaker B: You have a brown room instead of a green room.
[00:06:24] Speaker A: So the part I wanted to bring.
[00:06:25] Speaker D: Up, Brian gets a lot of attention. Does he need to be in the show? He's, like, all over LinkedIn.
[00:06:32] Speaker C: So found time to text me. Surprisingly unlike you, Mike.
[00:06:35] Speaker A: How do you, Rick, as you go through these, or as you start your new journey with NFM, who seems to get it more than anybody else as far as having a presence out there, a digital presence.
They actually create these universities or cohorts to help their own loan officers, but you've been at ones that don't do that. What do you think loan officers will need to do to understand the evolution of creating your local podcast or the value of creating a podcast? Because I think. And the takeaway from what you just said is my takeaway now, 75 weeks later, is do a podcast on something you really like doing, because that'll keep it going. And don't do it for what you think the audience should be, because if you do 20 great podcasts. Stop. That's not going to get you the sustainable business. But if you find yourself podcasting 75 weeks later, there's a lot of value that comes out of that. What message could be to a loan officer to get in that group? Not to mention they probably don't want to get behind the camera. I mean, sometimes it is awkward.
[00:07:36] Speaker D: Well, that's, that's, that's probably the greatest hurdle to overcome, is you have to do it for yourself, because obviously, as we know, we simply, we're not doing this. I mean, you almost do have to do it for one, one person of audience, which is yourself. And that's where you have to have a tremendous amount of passion about the subject matter. Otherwise its going to be very difficult to get motivated and to keep the momentum.
The other thing id say is that for loan officers, what companies can do. And I think NFM really does a good job at this. And theres a handful of companies that I think are strong at this as well, but very few to actually have resources for audio, video, and actually walk you through a creative process to, to organize your thoughts around a specific subject matter. Everyone's got something to say, especially, everyone's got a perspective. Everyone's got a view, especially their local market. And real estate is so local that it really enables to have individual voices that otherwise wouldn't have a voice to be able to get out there and to really publish it in some fashion. So if you can facilitate the tools, the creative direction, whether it's the lighting or whether it's having some good equipment or I um. Just to provide that directions for individuals, I think it's just a matter of, of getting the tools in their hands and then getting them, you know, in the act of doing it. Um, I mean, how many, I mean, it's taken us, I would say, brock, would you say it took us?
I mean, we've been doing this for what, about six months, seven months on the, on the real Fridays. How long has it been?
[00:09:09] Speaker C: Yeah, probably, probably more. Probably like nine or ten months.
[00:09:11] Speaker D: Yeah, and it probably took, you know, the first 15 or 20 episodes until we, until we actually felt like we were getting into a room. And then I think there was a, I'm trying to remember who that may have been. Maybe Rob Chrisman, actually, that we had on that one time, or maybe Brian that we had at one time that, that really sort of created sort of a gelling catalyst around our voice and what we were trying to accomplish and what we were trying to pull out of the guests.
[00:09:36] Speaker A: You know, I think one thing Mike and I spoke about, and we did do an episode, if you go back on your podcast, dialed to listen to it. We tried to give a framework of how lender can create their own podcast or what we learned. But I have to give kudos to you, Brian, for fintech Fridays. I think I was the first guest, but you were. You've been able to do it by yourself. And I think what Mike and I said and what you guys have each other is almost like this.
[00:10:01] Speaker C: Accountable.
[00:10:01] Speaker D: Two shows on Fridays.
[00:10:02] Speaker E: Well, maybe three.
Try to get syndicated.
[00:10:08] Speaker D: Are you still doing fintech Fridays?
[00:10:09] Speaker E: I do. I do that every other. Publish it every other Friday.
[00:10:13] Speaker D: Oh, God.
[00:10:13] Speaker E: I don't do it live.
Yeah, you were the first one. And I think I'm 220 episodes in now.
[00:10:21] Speaker A: Wow.
[00:10:21] Speaker E: Like three or four, whatever. It's been a lot.
[00:10:24] Speaker C: I was on that three years ago, maybe like, that was a long time ago.
[00:10:28] Speaker A: Yeah.
[00:10:29] Speaker D: He's waiting for his 300th episode to invite me on that. Yeah.
[00:10:32] Speaker E: It's like special milestones. I've kind of come up with this. I don't really market it this way, but I've come up with this kind of structure for my podcast where I. And it is a podcast, for one, literally treating it as if I'm learning for the first time. I talk about meeting cool people from cool companies with cool products. And so selfishly, I get to. I can ask anybody to come on it, because that's the one thing for the loan officers that are listening this idea of doing a local podcast, you could go literally into any business in your community and ask them to come out of your podcast, and they're going to say, heck yeah, sign me up. When do I show up? Because everybody wants to talk about themselves, their product, their companies. Even if they are talking to ten people at the end of the day, they don't know what's on the other side of it.
But, yeah, I just go in, it's 15 minutes, maybe 20 at the tops. But it's, let's learn who you are, the company you're with, and what's this product? What do you. What are you working on? I'd like to get startups on and just kind of, you know, pick their brain on things. I get to. I get to meet people and get their perspectives that I probably wouldn't otherwise. By having a podcast.
[00:11:41] Speaker A: What number show was the turning point for you? Where you realize that this probably be more like a two season piece, or it got easier to book people, or where do you feel? Or more people recognize you at the conferences as like the.
[00:11:55] Speaker E: Yeah, I mean, I'll be honest, the podcast itself is more for content for our Finlocker website and LinkedIn page.
I have rare in the, probably last month, I haven't really, on my personal LinkedIn. I haven't really pushed it out. I probably should do more on there, but I would say it was probably a good year into it. Wherever actually, people were reaching out to me, you know, to get on it.
[00:12:24] Speaker A: Right.
[00:12:24] Speaker E: That's, that's when it kind of flips when, because you guys get it all, you're getting, people reach out to you all the time, you know, how do.
[00:12:30] Speaker F: I get on there?
[00:12:31] Speaker E: How do I get on?
[00:12:32] Speaker A: Yeah, I would say, I mean, it's. What do you think, Mike? Like, I would say it's really just been the last two months where we are at that night, like David Batney, Bill Loman's going to be on next week. That did not seem, I mean, tried to ask, but it just seems a lot easier now to get someone to say yes. And one is like obviously having the receipts and they get to see peers on the show.
I think the other is just the consistency of doing it. You almost feel like deserving of it. So maybe however you come off, they're like, all right, yeah, I'm on.
[00:13:09] Speaker B: I think it's super important for our leaders in the mortgage industry to, to speak up and go online, especially going on camera. One of the things I want to recognize for all of us is how much I think we really are trailblazers, not only for the industry, but also for the voice of the consumer. When the originator has the willingness to go onto camera and present, whether it's financial services, material savings material, homeownership purchase material, or when, and when we bring on originators onto our show, it does two things. Number one, it brings a voice to our industry, but even more importantly, number two, it brings a voice of financial literacy to the industry in itself. When you, I was at a conference for financial advisors about three weeks ago, and they're presenting all kinds of materials, but if you talk to an actual wirehouse that's not an independent financial advisor, you need $500,000 in liquid net savings to actually go and talk to somebody. Right. And so what we do in the mortgage industry, you know, there's people that are scraping by to come up with three and a half percent down for their FHA purchase, and a financial advisor at Merrill bank of America or, or Citi, they're, they're really not interested in talking to them, because they don't have $500,000. They're barely kind of scraped down $25,000 for a down payment. The voice of our industry when it comes to financial literacy just doesn't come down to us presenting. You know, we're talking about independent mortgage bankers and the leaders and coin and so forth. We become the trailblazers on behalf of our industry to speak to the originators so that they have the confidence through leadership to say, you know what? Our leaders are doing this right now. I should be able to do this on a regional, on a regional level, not just, you know, in the county or city or whatever. I'm providing this. And so when you, when we see the originators, like, like over NFM Rick, and they have their own social media team, and they're going out on the road in their rv or minibus or whatever and other, they're presenting a point of view not only for their customers, but also, hopefully, to other originators to be inspired enough to present the opportunity to the consumer we present. When we talk to our leaders, its a trickle down theory that doesnt just go to the effect of, yeah, were talking, and yes, we had a chance to maybe even get some ancillary business from it, but were speaking to the leaders to speak to their originators, and for the originators to speak to the audience of the collective american homeowner or the potential homeowner. And I dont think we recognize the magnitude of how much, how much effect we have, not just in the landscape of our industry, but on the collective potential of going into home ownership in itself. It's huge. And so when we have all these leaders, Mike, I'm glad that we're doing this, but we're doing this, and there's a bigger deal that I see here for all of us that goes beyond just what we're doing on our show.
[00:16:19] Speaker A: Yeah, and you three speak a lot at these conferences lately. Could you define the difference between speaking in person and Mike's message? Like, do you feel there's a difference between when you do it at a conference and what you guys are able to do through the podcasts or what the audience is resonating at any different, like, being up on stage in housing.
[00:16:41] Speaker D: Wire versus, I like actually having the interaction. I think the lecturer and the NBA is going away from this, but the lecture style format of presentations are largely going away, right, in lieu of a more interactive conversation between, in essence, a moderator or someone who's on stage who might have a few points to sort of string together and tether.
But I would say Greg Shearer and I did a. We spoke at a conference together called unscripted with the title of. It was unscripted perfect. And it was.
Yeah, exactly. Uncontrolled. Unscripted.
But it was on stage. It was at the New Jersey mid Atlantic conference.
[00:17:21] Speaker A: It was hilarious.
[00:17:22] Speaker D: And it was really well attended. I think you were there. Right.
But we were able to have a free flowing conversation, but we were able to identify people in the audience to actually get them to say something. So it became sort of a one to many or many to one exchange, rather than just a lecture style conversation. Very lecture style sort of presentation, which has its merits, I think, in academia, but I think in industry conferences, where the whole point is to kind of network into mind, share, and to kind of get stuff from one another intellectually and from an existential standpoint, I think it's just you get so much more from it in that way.
[00:18:03] Speaker E: Yeah, I would agree.
I love unscrewden. That's perfect for me. Okay. Slides. Not a big fan of speaking to slides. I think there was a time and place for that.
So I think you're on a panel tomorrow here in New England. I'm on like a half hour.
[00:18:22] Speaker D: It's actually late.
[00:18:24] Speaker E: It's possible that I'm going to be late.
Taken from, like, podcasting, is that same approach onto panel. I'd prefer to do albedo keynote, if you will, because it can look and feel and be comfortable, like.
[00:18:38] Speaker D: So for those who want to book Brian as a keynote, he just says he doesn't want that. So you can go ahead and ask me. I'll be happy to do it. And at the same.
[00:18:46] Speaker E: I got you.
[00:18:49] Speaker D: But no, I'm agreeing with you for sure. But I would. It's an interesting question. Are the difference between podcasts and conferences? I think I prefer the conferences, but to some degree, you get much more yardage out of a. Out of recording a podcast like this and putting on LinkedIn or on the platforms. I haven't had the success that you've had in other platforms. LinkedIn has been probably the primary platform that we've had the most success in. Haven't figured out Spotify and Apple and things. I think you guys have done a good job and Jeremy's done a decent job. Is it really?
[00:19:21] Speaker E: I think it's. I mean, I'm a one. I don't have a team doing it, so it's a pain for one person.
[00:19:27] Speaker A: Yeah. We have a team gentleman named Mike Mills, who is from Geneva financial runs a great show. Have you been on? Yeah, and he taught us chat GPT. I'm putting together this packet based on what he, he went through everything. And we have a team, so that part probably is why it's able to get there.
[00:19:46] Speaker E: So are you in a spot where like, if loan officers want to learn, they can reach out to you?
[00:19:51] Speaker A: They can, yeah, we're in a spot now. If loan officers want to learn, not only can they reach out to us, but we, we have a PDF deck on really how to, how to do it in the least expensive way possible. It's sort of always been from a bootstrapper. Here's how you can do it. And then Mike and I wanted to add, like, if a lender is interested, so that extra motivation, because we think, like, you do need just the motivation.
Hey, you know, you hit a rot. That show wasn't great, but no one's going to remember it three shows from now, right?
[00:20:22] Speaker D: What does that mean? So a loan officer, like, give me the idea.
[00:20:26] Speaker A: Well, in the unscalable version, so in the beginning, we'll do a lot of hand hold.
[00:20:30] Speaker D: Like right now.
[00:20:30] Speaker A: Right now, yeah. So we'll give them the whole blueprint that we've worked on with Mills and put our own twist. We'll tell them what our team does, and then if you want our team to do it, it is a fraction of the cost of people that specialize in it.
[00:20:44] Speaker C: And then if they want to add.
[00:20:45] Speaker A: Some motivational parts to it, because I do think you need that for the first. So, and so we could, we could factor that in, too. And I don't, I would say all of that would be, you know, much.
[00:20:57] Speaker D: Subscription or how's it work? Like, how do they, how do you.
[00:21:01] Speaker A: I think we would just do a, an hourly fee for the motivation, but everything else would be absolutely free, so you get everything you need, chat, cheap prompts, all of that.
[00:21:11] Speaker D: I think it sounds terrible. I mean, in the sense that you should be charging for that in some ways, because, like, there's the thousands of, I mean, probably thousands of hours that you put into it. I know, um, that you've put into what you've done. There's a tremendous amount of learning and there's value of being able to accelerate that learning to people who are just trying to get started.
[00:21:32] Speaker A: Yeah.
[00:21:33] Speaker D: Um, you know, I don't know, you know, how much per month, but I mean, like, they, you know, it would seem like $300 a month, $500 a month, something where you could, if you get, you know, ten or 15 or 20 people to pay you. You actually get enough income to be able to put into additional services and additional resources.
But, yeah, I wouldn't give that away for free because I would say Brock and I and Jeremy are at sort of fairly rudimentary stages and getting this off the ground. And it's hard. I mean, it's a lot of sweat equity to try to figure out all the details around it.
[00:22:07] Speaker C: Yeah, we've really been relying on kind of like our, our real world Personas to kind of, people come to us and want to come on the show and, and we make a couple posts about it per week, and that's kind of that, which we kind of did on purpose. But now we're reaching a point that we should probably revisit that.
[00:22:24] Speaker D: Like, yeah, we need to tighten it up. You know what I mean? Like, we can only get so far on good lucks and personality. Brock, you know that. I mean, that's. We really need to tighten that up.
[00:22:34] Speaker E: Brock's the eye candy.
[00:22:35] Speaker D: Yeah, well, we know Brock is the eye candy for sure.
[00:22:39] Speaker C: Jeremy's always after, like, a, coming out of a tattoo parlor or a barber shop doing show live on the streets of Detroit. So I think that's what the people come for.
[00:22:49] Speaker D: You are. You're so main. Does it say bowdoin on it? What does it say on your hat?
That is the most main thing ever right there.
[00:23:06] Speaker B: Mike. We need to have, like, we need to call it like the diving board, right? Because when you get. It's like all the kids want. All the kids, they want to line up on the high dive, and they're always chiding each other on to try and jump off the diving board. They're always scared, but then one person does, and then everybody needs to do it, right. You jump into the water, you get. It's either cold or whatever. And I think that, that when it comes to social media and broadcasting, I think we need to be able to. You're right, Rick. We're. We don't. We don't. We're not. We haven't char. We haven't figured out how to charge enough yet, but we have already done enough to where they can jump off the diving board and say, this is what we can do. And I would just come up with.
[00:23:43] Speaker D: A super baseline package for like, $300 a month. This is what you're going to get for it. And it's going to be like the lighting or the mixture, the sound, the audio or whatever. Like, you're going to take footage that they recorded. Word and that you sort of arrange it in a way, in a way that really like elevates it in some fashion.
I mean, I would definitely look, it's a worthwhile, it's a worthwhile service to be able to provide because, you know.
[00:24:13] Speaker C: Yeah. How much can you remove? 80% of the pain of starting a podcast and starting a Persona on LinkedIn and social media and everything like, that's, that'd be a tremendous service. Yeah.
[00:24:24] Speaker A: Well, there you go. Uh, please reach out. We also do.
[00:24:27] Speaker D: Please. We don't know what we're offering, but please reach out the number, the numbers here. Reach out.
[00:24:33] Speaker A: We did create the lead magnet, though, and I will say that, um, we.
[00:24:36] Speaker D: Don'T know what the product is or how much we're going to charge, however.
[00:24:39] Speaker A: We got the lead magnet. So if you do reach out, we have the framework of what you need to get go from like recording it in zoom, or we use streamyard. But here's your tech stack, here's how you get it. Then there's, you can listen to the episode, but there's basically five softwares you need, plus a chat GPT system. And in less than 2 hours, you can have your weekly one or your bi weekly one done. And nobody, you know, we had to figure that out the hard way. If you don't have to figure that out, it's just a lot easier to dive into the pool.
[00:25:10] Speaker E: Electricians can charge $400 an hour. It's not because of the hours worth of work is worth $400. Its all the years of learnings that they went in.
[00:25:20] Speaker D: Well, I dont think anyone is. I mean very few people have put the amount of time and energy in sweat equity that youve put into this and arguably both of you. But obviously I know you better into expanding your networking reach and trying to sort of packetize that into a digital format so that there's so broader consumption could either benefit from it or to contribute to it.
[00:25:46] Speaker E: Did you say packetized?
[00:25:48] Speaker D: Yeah. Something back.
[00:25:50] Speaker E: Check that one later.
[00:25:51] Speaker A: Well, we got it.
[00:25:52] Speaker D: Yeah.
[00:25:52] Speaker A: You can come here for company name ideas like Packet ties and diving board, but I mean, it's a great spot. Do you guys want to talk about and you talk, make sure. I should have had two microphones or two microphones that actually connected to the soundboard. But um, so I don't know how it picks up. But um, so I can lead us off on one thing I learned here from this conference. And then I was going to ask you, Rick, about joining NFM, which you do get on a lot of these podcasts and you're going to get a lot more asking. But I think you understand the IMB landscape. Actually, we'll go into this question. So the IMB landscape, there is talk that Mark Jones was saying it today. You know, good business is coming. I heard it from the title companies. They really think that cash out refinances are coming. Then I heard it from the retail IMBs don't rely on refinance because we've heard the new stats, 50% of servicers recapture, right, 60% this year. Fun fact for mobile app people. And what I predicted in 2017 on LinkedIn, that by 2025, 75% of all refinances would come.
75% of all refinances would come through mobile app Mister Cooper is actually at 73% retention in their mobile app on one, well, to be at one point, incredible. So, and we're hearing that everybody's at this huge capacity right now, should be cutting right now, and they're not because they know rates are going down. And so you're going to see very aggressive rates. So people are going to be competing and maybe doing more refinances but not making as much money as they thought because the margin compression of everybody being a little bit over capacity.
But that that same group is very bold on bullish on purchase business because the rates are going down. So it sounds like everybody thinks business is going be good.
But where do you see refinances in this? Whether it's from a margin perspective or whether it's from a servicers get it or whether it's from, yeah, it's a big pie.
[00:28:00] Speaker D: And you know, I think over time, the tactical innovations that services have and the ease at which they could refinance customers that they're servicing is going to be a major, major problem for IMB's, for any mortgage company for that matter. But the good news is the legacy and the tradition of imbs and the foundation of imbs is purchase business. Thats kind of how thats where services have failed. Thats where depositories struggle.
For the most part, imbs really make up the lions share of the purchase business in America.
I look at it as gravy. If you can get refinances as an organization, thats great and you should support that and make that easier to be more competitive. The good news is larger imbs are servicers. And so companies like ourselves, NFM, as well as, you know, others out there, we do service our own loans, right? So we might sell them downstream, but so we can take part in that technical advantage, but you have to put all your effort and your resources into expanding your purchase business. Now, I do see it's going to be an interesting process because the mid tier to enterprise level mortgage companies, which only makes up about, theres only about maybe 60 to 70 of them in the country, that are making serious investments in AI and serious investments in technology where that cost per closed loan is going down. So more production volume is going to amortize the investments and costs. And so the margin gains are going to be tremendous for us, which is going to translate into better pricing for customers eventually. Now, the problem is more production to small to mid size, up to that midsize category for most mortgage companies, more production is going to be a problem thats not going to actually help them. Its actually going to make their problems even worse, because to keep up with that demand, theyre going to need to add traditional costs that larger imbs are avoiding through innovative automation technologies and AI. As a result, the small to midsize companies are going to either rely upon vendors for AI solutions or theyre going to end up having to bite the bullet with just traditional expenses of underwriters, closers, funders, auditors, legal, all of these things. And theyre going to lose out on that margin. Tug of war and theyre going to lose out hard.
[00:30:19] Speaker A: Yeah, that margin things real, ill just say real quick. One of my clients, Silverworks solutions, I personally think is light years ahead of everybody else in that category. AI, its digital labor. So think of like BPO over the last seven years, its going to move over to digital labor.
But they're only available for people doing 500 units a month or more. So if you're not doing 500 units or a month or more, let alone the change management, let alone if you buy one AI product, you're probably going to say no to silver work in the beginning because that's what this industry does. Like, oh, we already invested there. We're going to see how it works.
So I think you are going to see a period of some people not making as much money on the refinances as other people, people using the tech. And Brian, I'll give you a shout out. And Brett Brock, please bring up on your end how you guys doing with music. But you're like the pioneer now of Jeremy's here now too, and he was talking about it at real edge. But like just be really good at one thing. And if you're really good at first time home buyers, if you're really good at first time home buyers, which, which you've you've done then that refinance, it's not as important. Right. And I think thats the message. It doesnt have to be first time homebuyers. But thats a, you certainly stuck with a good one versus first time refinancers, which was a big thing, what, four years ago, millennials refinancing for the first time. I havent heard that buzzword.
[00:31:39] Speaker E: Preston, back to the way youve framed out the small to mids, the mid to bigger, et cetera.
Do you see a potential for a migration from those smaller guys to get even smaller, not in volume per se, but in infrastructure?
[00:32:00] Speaker D: Yeah. Oh, yeah.
[00:32:01] Speaker E: That's kind of what I'm thinking is.
[00:32:02] Speaker D: Yeah, but, but those solutions don't really exist right now. That's the problem.
[00:32:06] Speaker E: Right.
[00:32:06] Speaker D: You know, or they don't have the money to actually invest in the, in those solutions. So to catch Jerry, too, like part of what I was contending is that like the production, as production volume increases on the purchase side, the larger institutions, theres only about 75 to maybe 90 mortgage companies in the country that actually have the resources, money and maybe arguably the leadership to be able to actually invest in technology and outsourcing and AI and so on. The rest of the crowd is going to not be able to participate in the potential margin games. More production is going to increase their costs, and so theyre going to lose out on the margin war between the enterprise lenders and small to midsize. So the question is, how do you close that gap between either the small to midsize will lose that war and they'll either merge with the larger institutions or somehow there'll be tech vendors that'll deliver a solution that'll bring that economy of scale to them. I don't know.
[00:33:05] Speaker F: We haven't seen a tech vendor. I don't think scale what you're talking about holistically. We've seen instances of, for this one task or for this one role, we get some scale there. But what you're talking about is more of like a holistic infrastructure play. We have not seen a vendor really be able to do that. I think you're spot on, too, with where the pressure is going to come from, which is everything's going to get more competitive across. So was it the sort of servicer trend that Greg mentioned on LinkedIn that sparked a whole bunch of conversation? Servicer retention is going to put a lot of competition and pressure on refi price, while the purchase trend you both just articulated is going to happen as well. So what's going to happen to the person at that midsize or smaller lender who's under the most pressure. They're going to have to cut costs. They're, excuse me, they're going to have to cut price to get that lead closed. It's going to further exacerbate the problem again.
[00:34:05] Speaker D: So we're barely making any money now.
[00:34:07] Speaker F: And a lot of mortgage company, and now I'm going to cut rate or some sort of discount to make sure I don't get beat by the larger, you call them enterprise lenders or in the case of a refi, the retention play. So it is going to get, I think, really tight, really fast. Everyone's saying like, everyone's saying like, oh, no, the volume is going to help. I think the volume is going to exacerbate the margin problem. Yeah.
[00:34:28] Speaker D: So that was telling somebody that, like, volume, a lot of small to mid sized companies are thinking volume is going to be their, is going to be the answer to their prayers. And I'm like, volume is actually going to make your problem worse. It's going to make your problem worse now. And you said that Mister Cooper is capturing or has some kind of like a 70% retention rate on existing customers that they're servicing on being able to refinance them, or was it Mister Cooper?
[00:34:54] Speaker A: Yeah.
[00:34:54] Speaker D: Or I mean, that's, that's, that's an astonishing. Or in their mobile.
Well, that's insane. That's almost difficult to believe. I believe you. I'm just saying it's difficult to believe because it's just astonishing. I mean, that's an astonishing.
[00:35:07] Speaker A: Only 13% higher than the average. And it's because of their mobile app.
[00:35:13] Speaker E: What percentage of their book, though, is in the mobile app? That's probably what you have to go from, right? You start at the top of the total service customers and then how many of them are in the mobile?
[00:35:24] Speaker A: It was 80% a couple of years ago.
[00:35:29] Speaker F: Is there a reason you're putting so much attention on the mobile app aspect of retention? Is it because the offer gets delivered there or it's because they actually, the customer actually goes back and opens it up more frequently than a URL experience? What is it about? Do you know what it is about the app that actually created the stickiness?
[00:35:52] Speaker A: I always say mobile apps, to me, like, it's just, you know where to find it on your phone. And probably the majority of those people got a mortgage by going through a point of sale with, we know all the names. And so now that's all they have to do in the app again is go through that same point of sale. They're comfortable with it. They didn't, their loan officer didn't talk to them for 2 hours and so now they said, hey, it worked last time. That's all I have to do it again. But I think the app, what people underestimate about the app is most mortgage technology is URL's. And so to take the time to manage your financial awareness going to find a URL is sort of insane. When you can download an app like Brian's. It's the fact that they know where it is on the phone. And I think, I think more and more people want my mobile. Um, behavior take is more and more people. At least iPhone users will now swipe down from the top and start to type the name of mortgage or mister and it'll already know it's Mister Cooper Bond. Yep.
[00:36:56] Speaker E: Yeah guys, I got to go get mic'd up for the uh, you're on.
[00:37:02] Speaker D: In a few minutes deal. We'll see out there. I'll be.
[00:37:08] Speaker A: Leaving mic'd up to get.
[00:37:10] Speaker D: Yeah. It is interesting because mortgage companies, we might even bring the table back, but mortgage companies are not used to mapping out and there's a couple of them that do it really well and obviously rocket is one of them. But mapping out the consumer experience in a way where you have the internal leadership to do it, the product manager is the project manager is the designer. It's like most, I mean even in the top 25, most of them don't have those resources. Maybe in the top three or four, but that's about it.
[00:37:38] Speaker F: Yeah. And I, I actually do think it can make a difference but I don't think it should overshadow the, and I'll call it elegance for lack of a better word. But the elegance that you can get your product and pricing in front of them, the earliest and the most accurate. So the trend that I've been watching that I'm most interested in is instead of sending out an offer, so let's go back like twelve years, it was save $500 with us or $500 discount. Then you go back five years and it was people like you are saving x people in your situation are saving why do a refi with us? And now this time around I think its going to be Rick. Did you know you can save $817.42 by refinancing at todays rate? Click here. Its going to become very specific and tailored and that is going to make a huge difference. So the most powerful thing those retention books could be doing is that. And I think if you're building that, you should also be building it to do it off of a pre approved credit amount so that it works for both purchase and refi. Like you're talking about the product experience. Don't treat behind the scenes. You don't have to treat purchase and refi differently. You can actually build product and pricing, customized delivery, and then all you have to change when it gets to the app or gets to the consumer is the skin. Right? Is the words purchase and refile on the thing you should be driving customized.
[00:39:08] Speaker A: Offers, I was told. See, we do have a team for, but this is, um, this part faces us and a undirectional mic. So. So if you're holding it this way and you're on this side, it would.
[00:39:22] Speaker F: It doesn't pick me up.
[00:39:23] Speaker A: That's what the team Stalin. All right, there we go.
[00:39:26] Speaker F: I'm learning to. Oh, no, I'm learning this in real time.
[00:39:29] Speaker E: So it's.
[00:39:30] Speaker F: Anyway, that was my point about if I was built, I was thinking about it. Don't necessarily need all the resources that a rocket product team has.
Go ahead. I know you're.
[00:39:42] Speaker C: Yeah, I was just going to say that it has to start being a lifetime value conversation like it is in every other industry.
All the big tech companies give away products so that you stay in their ecosystem, things like that. I think we've talked about it for a long time, but some news this week that's close to home for Jeremy, at least, was Rocket is finally flagging that they're buying servicing books. They've always talked about maybe buying servicing books. It's profitable ish for them, but it's like they're an origination company. But that is, I think screaming lights, to me, flashing lights is like people are trying to play this lifetime value of a customer game surprise with Rocket money.
[00:40:27] Speaker D: They didn't do that sooner. That wasn't part of their strategy. Sooner or maybe.
Oh, sorry, was it too loud?
[00:40:33] Speaker A: No, you did it right.
[00:40:36] Speaker E: In the.
[00:40:36] Speaker C: UWM news, too, this week. Right, Rick?
[00:40:39] Speaker D: But you know what I mean, though, just with, you know, when did they buy true bell? Like four years ago, five years ago? 2019.
[00:40:46] Speaker F: No, I think it was, oh, 21.
[00:40:49] Speaker C: No, it was 2021. Yeah. So they bought that three years ago. I'm sure it was always trending this way, but literally this week they had an investor day and said something that I've never heard them say before. Jeremy can correct me if I'm wrong, which is like, we are going to be buying servicing books. We're going to be getting them into the rocket ecosystem and we're like, exactly what Greg Sher posted like a couple of weeks ago basically is we're going to play this game of buying these clients access and these clients not only access, but all their financial information, all their payments and put them in our ecosystem. And they have. I helped build some of the purchase side of what's going to happen next.
When I worked there, Jeremy helped build some of the capital market stuff that's going to happen there when he was there. So we have certain insights that are probably outdated now, but at Newsip and I think at Fen Locker, Brian was still here and a handful of other companies that I'm close with, it's like, ok, what's the rest of the industry doesn't want to build all that?
That refi calculator experience that we were just talking about. I think lenders maybe can build that. That's mostly doing math and doing a lot of client targeting. But the purchase side is extremely hard and that's in a sense newsips next phase is becoming that purchase arm for retention.
[00:42:06] Speaker A: I will say one piece, the CFPB spoke today at New England and I don't think I can remember the last time they q and a'd. So I, I was listening for the show and just in general to hear insight that you don't usually get at a conference, I mean, um, especially the state ones, maybe an advocacy. One piece she said on technology was which coming back from housing wire AI contradicts a little bit. They are going to be looking at how lenders use AI in customer service and in chatting. And if they feel it is less of a customer experience than talking to somebody, that is something they are going to um, be looking very closely at. Was their wording for it really interesting.
[00:42:53] Speaker F: To me to think about how to measure that and how that subjectivity is going to be covered because I think one of the things we did hear from a lot of technologists over the last six months was that the bot, or lack of a better word, has a more comprehensive knowledge management, enterprise knowledge capability. So isn't it actually what we're hearing is that it would be a more informative experience for a consumer, not a less informative experience.
[00:43:21] Speaker A: I actually think the biggest, um, you know, like everything's a double edged sword. So AI is really helping out the industry. I think what would really hurt the industry is if the CFPB found out a way to use AI to get the customer because it seems like, listen to it today. They act a lot based on the customers filling out that website with complaints like, oh, we're hearing this. So now if they can come up with an easier way for customers to complain on the CFPB website, that's not going to be good for lenders because they use that as a reason to go. To go after was my take.
[00:43:54] Speaker F: Yeah, I mean, when I was an attorney, the two most common ways any regulator, CFPB or state regulator, uh, discovered something was a complaint or a competitor, like, that's exactly how they get their information every now and then. It was a disgruntled employee, ex employee. Uh, and those were the top three reasons. So yeah, complaints and competitors.
[00:44:13] Speaker C: That, that reminds me of a recent story. So uh, I'm uh, advisor for ingenious data. Um, I know some of you guys have used, probably all you guys have looked at that data, some of you guys use it. Um, they uh, they've been selling their data to some other regulators, um, who for, for fair lending related use cases. And it's a pretty funny and amazing sales strategy where it's like, this is the view your regulators are looking at. So you should probably look at it yourself.
And so maybe AI will go that same way. Like there'll be some, the AI needs this and this oversight because that's exactly how the CFPB is going to look at it. There's a chance there that the AI, I think someone was going there a second ago that the AI is more informed than the loan officer taking the call. Right. Because they're going to have all that in context information in the chat. Will they be as good at selling it? No. Will they be as good at executing it? Maybe not, but they might actually have more info. So there's a chance that parts of the conversation are better. You know, no offense to law officers, obviously, but it's, it's interesting.
[00:45:13] Speaker D: So how do you, so what's the strategy from a lending standpoint? Just to, just to go as aggressively, just to run and charge forward as aggressively as you can and just work with legal to see if, I don't think there's been any case, theres no case law around this stuff. Right. So its not like a lender has been fined a million bucks or $10 million as a result of any of this. So it seems like lenders for the most part are all running in the same direction when it comes to this.
So thatll plainerize sort of the complaints, itll complainerize the competition, if you will.
The only thing thats unique is that the amount of data, if its a proprietary LLM, like the amount of data that's specific to a lender in the integrity of that data to be able to direct the consumers accordingly.
If anything, could legacy bias somehow emerge in the way that these. In the way the consumer is directed and maybe it could reveal, you know, weaknesses that have always been there but just haven't really been revealed, if you will. I don't know. I mean, but it's, I don't think it necessarily. The hope is it doesn't scare innovation that it should somehow that we should sort of innovate through it.
[00:46:28] Speaker A: Well, cheap.
[00:46:30] Speaker D: Yeah, no, I was the way to tease.
[00:46:33] Speaker F: I've been taking exception to the word innovation in mortgage now for going on a year because, yes, let's call it innovation. Fine. But yeah, Michael, you were saying this when I walked in and I think you're pretty consistent on it, which is do what you're good at, apply tools to your strengths to make them better strengths. So I think the way to start to your point is use the tool to get a goal accomplished or an objective accomplished that youre already either good at or wanting to work on. And I think with this, I would not be worried at all about applying AI to customer service. Frequently asked questions or enterprise search, those are the areas that its good at. Those are the areas where the knowledge management or the most information is the most valuable. And we already know that's what the tool's good at. So start with what it does well and you don't have to worry about all this stuff. I exactly. I would sort of second exactly what you said for that reason.
[00:47:34] Speaker A: Yeah, she did say AI shouldn't matter because you should just be following the rules. It was more of a be careful because if your chat bot accidentally doesn't follow a CFPB rule, you're not going to be able to blame it on the chat bot. So if it steers or if it makes a recommendation about adding income that the loan officer wouldn't do because you uploaded an accidental PDF to it thinking you were getting ahead of the game. That was what their warning is. As long as the AI follows the rule. But don't say, oh, it's AI. And I went through this with the mobile app. Where was co branding? Respa wasn't Respa, turns out within Sino, you know, it wasn't. So, yeah, it's. Sometimes you can say it's tech and sometimes you can.
[00:48:20] Speaker B: Yeah, I think this is, this is the point you have to decide to bring a knife to the cannon fight, meaning that if you're the originator, you know you're not going to beat the servicer because they're, they have, they have the first, they have the first line of, first line of contact number one and they're going to be blanking them. Whether and if the servicing companies happens to be an FDIC insured bank and servicing and they have their credit card information, meaning that they're going to find out how much debt do they have, right. Debts, debt keeps on credit card, consumer debt keeps going up and as a result, the servicing of that debt. And if they have a FDIC bank loan, then the opportunity to get that refinance done is just not going to be there. So if you're going to figure out what is the night you're going to bring, you're not going to win the cannon fight at all. So using services like a clever or a new sip is going to be one knife you could do. But if you're going to be focusing on that yet, you really have to go back to grassroots. And the grassroots is basically getting on the phones and meeting people and doing the things that you need to do, whether it's at a conference, a networking session or figuring that out, you have to do that. Now with AI, you can go and get Humda information. With AI you can go and get consumer information.
If you are working for a retail mortgage company because they have the ability to go get information from an ingenious or some other type of thing. Oh, these are the trends currently, right?
For example, if you know that you're going to be going to a birthday party and they're going to be talking about the new house purchase or whatever your trend, you can figure out from that. But with AI, you can use the Humda information now and go, oh, well, this is the class of people that's going to be purchasing an XYZ regional type of area and the AI can now go and use that type of information to use marketing for that. And that's how you bring a knife into the cannon fight. Because now if you are again working for the retail origination company, you can go get the information because in hope that your employer is going to get that information on your behalf so that you can go out and grassroot campaign your entire origination strategy either through the purchase market in conjunction with lead providers or in conjunction with, with local people. So you can figure out how are you going to get more refinances done, either through divorce attorneys or through bankruptcy attorneys or through collection agencies or figuring out with other banks that can't do that loan because of their buy box guidelines on their matrix. I think if you're going to bring the knife to the, to the can and fight, then you have to be much more innovative in the way that you get that information as the originator and then go seek the ancillary or referral sources that you want to concentrate on to refer to. Go back to what Mike was saying, and you know what, this is the type of purchase business I want. And the Humda information says this. So this is the demographic Im going to hit.
And I think that thats going to be the way for the originator if they want, if theyre going to work for the retail company that is with the, the war chest and relationships they could have.
[00:51:29] Speaker D: I like how you brought that full circle to the originator, or at least to the human contact and the relationship between the consumer and the representative of the physical representative of the mortgage company. Ultimately speaking, AI is not going to perform licensable activities. So ultimately every kind of piece of advice or direction that's going to be provided to the consumer, especially around products, is ultimately going to, is assigned to two licensed identities. One, the company which is obviously liable, but two is going to be the individual loan officer, which ultimately has to be the final say as to where the consumer moves. No?
[00:52:07] Speaker F: Yeah, I mean, I have a slightly different view that I think is fun to tease out, which is when chat started as a customer service avenue for salespeople. You could have like let's use rocket mortgage as an example. You could have a chat function tied to a licensed banker who was your loan officer for your rocket mortgage that you never spoke to, but they were assigned to your loan because if you needed to reach out either through the chat function or the 1800 number, that's where it would end up. But you could pull your own credit, lock, your own loan, and theoretically go all the way through a digital closing. Increasingly, people are doing that. I think AI is just going to step in and you're gonna have a licensed individual assigned to the AI and it is gonna be performing licensed capabilities under the sort of tag, under the tag of somebody's MLS.
[00:52:58] Speaker D: So ultimately that'll be the step function that's gonna end up being the step function, like a chat in essence, to phase out maybe the physical contact between a loan officer and the consumer. But it'll be interesting to see how fast or what resists that from, from happening. Um, but, but yeah, I mean. Cause it's think about, I mean, it's like, it almost calls into question the existence of like community banks, credit unions. They still exist. Like the old slow way of doing things still exists. It's a smaller percentage of the pie, right. Community bank area, you know, that segments probably three or 4% of all mortgages. Um, so it's a, it's a pretty small piece of the piece.
In probably 70 years ago, it was a much bigger piece of that pie.
So its an interesting question around how, not to use a dirty word, but how innovation will accelerate that process in what forces might resist that from happening and what actually might drive that home.
[00:54:02] Speaker A: Preston, I think one interesting piece to go on this is I spoke to a leader of a credit union that as 100,000 members will say, right, and then nine months ago, how many loans do you do a month? Ten. So you're like, okay, talked to him the other day, how many loans do you do a month? 30. Sounds like a joke, but I said what changed, and really all that changed was when you go to their current rate on their website, they actually asked for a text message number to put in. And now when he gets the text right away he actually, as the leader, calls and engages and it's able to convert. My point is they didn't do digital labor like I was talking about, that needed 400 units a month. They didn't install a chat GPT.
They did something that actually would, they think probably a huge lift, but was just a matter of adding the ability to know when somebody's on their website and get permission to text them right away. And as a result, that credit union still exists, whether they're slow or not. Their, their employer credit union likes working with um, a brand they recognize and a brand their employer supports. Maybe you have another example of something like that.
[00:55:15] Speaker C: I've been really impressed that, uh, credit unions are some of our best partners at Newsip. I've never done credit union partnerships at anywhere else in the industry before I landed at Newsip and we happened into it a little bit. But the uh, the thing that behooves us with credit unions is that their number one metric is just saving their members money no matter what. And Nu zip can really justifiably say that. So maybe its not the tech adoption, but ive still been really impressed that they have adopted new processes, new product offerings to some extent with our real estate credits.
And so close to half of our partners are credit unions at this point, which was not something I would have foreseen a year ago and growing quickly because it's a word of mouth game where they find something that works for members.
The word keeps spreading. So yeah, I've been surprised by that, but we have not seen the same in the for profit regional bank channels.
So I think it might be the specific nonprofit member benefit tuning of our technology and offering that makes it stick, but uh, nonetheless, give credit unions a shout out for that.
[00:56:24] Speaker D: What I'll say, um, just on, on my way out here, is that we've, we've established, we've invested pretty heavily in um, on AI solutions, but specifically to Michael's point, to empower the loan officer for, you know, product selection, making sure that it's, it's more tailored and individualized to the specific consumer. Um, so it really minimizes the loss of research, it educates the loan officer automatically, hopefully educates the consumer at the same time, and then brings the two together and then the other piece is on the consumer side as far as being able to bring the consumer down a more tailored funnel. So at NFM, Christos, our CIO, is probably two years or so ahead of most of the lenders that ive been exposed to in the actual deployment of some of these AI solutions to be able to empower the loan officer. I think it's uh, so hopefully that's the case. But I think it's probably a stepping stone to, um, to, you know, future innovations that are going to make that even, even more seamless.
[00:57:28] Speaker F: That sounds right to me. I mean, I think uh, if you're, I mean, almost everybody is going to end up in the next year with some sort of GPT instance of their own, and that is going to become the new sort of uh, ground floor that you have to build on top of to be different. So I think what you said, especially on the two year horizon, is probably exactly right and it's going to speed up, but um, if you don't have a chat GBT existence instance, excuse me, or some sort of tool like the ones Rick just described, you are behind already for sure.
Thank you, Michael. Thank you Michael, for having us. Appreciate it.
[00:58:02] Speaker D: Thank you guys very much.
[00:58:03] Speaker A: Appreciate you guys.
[00:58:05] Speaker D: It's an optimistic content, a lot of good content.
[00:58:07] Speaker A: Yeah, I'm going to go rewatch it. Thank you guys. Appreciate it. Mike show tuning out.
