Episode Transcript
[00:00:00] Speaker A: Hello and welcome to another episode of the Mic'd up show, quickly becoming known as the longest running live show on LinkedIn. We are on video now. We've done it every Thursday, haven't missed a beat. This is getting close to our 100th episode and we have someone returning, Eddie Perez, who is president, founder, CEO, everything over there at epm and he's been on a past show.
Oh, by the way, we do these shows live on LinkedIn and YouTube because we do want audience participation. We sometimes post the questions so that you can get a quick shout out. But if you're listening to our podcast, which we hope you are on Spotify, Google, Apple, really anywhere, we want you to know that you can come on Thursdays at 2pm Eastern and of course.
[00:00:51] Speaker B: At 11am Pacific here in sunny San.
[00:00:55] Speaker A: Diego and you can join our YouTube live or our LinkedIn live and just post a question. We do it so that someday it gives you some access to some of these larger leaders like Eddie And Eddie, last time we had you on here, we had a common theme throughout the entire year which was participating in your trade, the advocacy, how important it is.
But today we're doing it from a different perspective. So everybody has been all amped up on what they can do for the industry and I think today we wanted to make it as you have become with your hundreds of thousands of followers between all of the different platforms. You've built it over time by sending a message about either taking care of yourself, your mental health, your financial abilities, or just what you can do for discipline. It runs the gamut. So you have Tom Brady coming to your event, which was big news. A Boston guy like myself and I think he constantly talked about the long game and everything that he's been up on stage talking about and how nothing just comes handed to you. And I think he looks at the NFL right now and it's, it's a system built on the college kid. Comes right in, he's supposed to play, he doesn't learn any of the skills.
So long game. We, we're kind of looking at this. Our whole show is about how the brokers of today could be the leaders of tomorrow.
Everybody wants to get it done quick. Let's start with some actionable steps here going into how you say or one of your posts was, you referenced Usain Bolt trains four, four years, right, For a nine second race.
Where does it start now as you're looking at the end of here, 24 and your outlook of 25. What can loan officers do personally in Your words to, to get ready for.
[00:02:52] Speaker C: This race sound like a broken record. I've been saying this almost for two years. I, I think originators and leaders have to accept the realities of the situation. I think they are still not accepting the realities.
They still believe that refis are coming. I'm not going to sit here and say there won't be situational. There may be a month or two next year or three months. It's sprinkle because of emotions. However, there's just not enough refi inventory. I do believe that second mortgages will increase next year because people do need the liquidity and that liquidity is going to be a lot simpler than refi their loan unless their credit's gone down and they don't have a choice. However, that's not enough to sustain a business and to sustain a business model for an originator or a company. You know, refi is kind of are like sugar highs. They, you know, they come fast, they go fast, and you should just take it as, you know, cheap carbs.
I think you just have to really realize what's going to happen next year. You will see more units because that's going to be a lot more home building. You know, we still are in a deficit and that's not a bad opportunity because you're seeing a lot of regional and smaller builders getting back into play and they don't have, you know, quote unquote mortgage company like, you know, your massive ones do, like, you know, Dr. Horton, Lennar Pulte. They all have their mortgage divisions. However, I also know that if you, you could be a backup lender there and get plenty of business as well. So it's really, I would say step one is they're going to have to face reality. And I think that that is the hardest step.
And ironically, if they could realize it, if they even followed Maslow's laws, a hierarchy of needs. Because that's literally need number one, food, shelter, water. You, you kind of have to come to terms with what food, shelter, water is available. And you know, units are not going to fly off the shelf. I, I don't see you even had the Fed yesterday who said they're going to probably pause on it. You know, honestly, I thought, and I'd shared this for a couple years, I didn't think they should move till Q2 or Q3 of 20, 25. People were very tough on me about that, saying that I didn't care for the average American. I said, not true. You're not going to curtail inflation and boom Here we are, we got stagflation rates shot up yesterday and everybody wants to cry in their soup. And I'm just like, if you really thought interest rates was going to save you, it does save the average consumer on their credit card bills. That's great. I would never say don't do that. However, at what expense? You know, it does not look like inflation is curtailing the way it is. And I'm not completely surprised just because if people understand how inflation works, the money supply just grew by something like 40% in a one or two year period during COVID That has to get sucked out one way or another.
[00:05:36] Speaker B: It's interesting that you say that because in order to, in order to have the confidence to say you need to have a reality check, the first, my first reaction is you have to be, you have to understand with where you're at, number one. And then number two, you have to be grateful for what you have. Because it's hard to have a confident attitude without gratitude.
[00:05:57] Speaker C: Oh, absolutely.
[00:05:58] Speaker B: Okay. And so with that in mind, I think that if you're, if you're going to get a step into reality, then what is it that you think that the focus of that reality needs to be? Because if whatever you focus on expands into somebody else's reality, then what is it that that focus needs to be? Either it's more telephone calls because it's not going to be hiring and firing of people necessarily when it comes to company efficiency, but it does to come to some kind of focus. And so if you're an accounts executive or an originator or an executive, what is that focus supposed to be as a part of that reality check? So that the expansion of growth either for a wholesale company or retail company or a brokerage would be. So that focus says this is how we're going to grow.
[00:06:48] Speaker C: So you, you bring up a great point. You know, to have a reality, you got to have courage. However, you are absolutely accurate with gratitude. I believe gratitude, something should be practiced first. Gratitude is no matter what the numbers come out, there's going to be some sort of growth rate in units from last year, 20, 24, I guess technically this year to next year. Just because demand's so high and the pinned up construction, because it takes about two years to start showing up is really starting to show up in droves. You know, everywhere that I traveled, I saw more and more homes being built. I, you know, I don't see builders going bankrupt. I don't see, you know, PVC pike farms as I saw in 2008. I don't see any of that. I see them all getting snapped up and then the media telling you that somehow housing is not affordable. It may eat up more of your, your monthly nut. However, that does not mean it's not affordable. And obviously with how tight underwriting standards are at such a high, great standard, they're not going to let anybody just in home. So it's not like you have to worry about some implosion coming in. Even if they did let a few extra people in a home, that wouldn't matter just because there's so much demand, it would get eaten up. You know, nobody hears about foreclosures sitting on the market. Once they're done, they're gone.
So I, I would tell you that to grow is first to understand that the question is going to be where are you going to grow? Too many people focus that they think rates are going to get down and they're going to refi and it's just going to rain. You know, you definitely should focus on your book of business that you've currently closed back because it doesn't even have to be transactions through them. They may know people that are shopping for homes. You know, what better than a referral from somebody that you did business with? I do believe that originators should start going more after the builder business. There's plenty of it out there. There's plenty of builders out there and a lot of them do not have mortgage companies.
And as I said earlier, you could be the backup. But yeah, it's going to be more phone calls, more in person. I still am a firm believer on social media, it's not overnight. It may take interacting for 612 months to really build your brand and grow it out there. However, a very inexpensive way to grow your brand is to follow the Gary B.
Mindset, which is what you do is you pay your $80 every day, which you give 90, 90 people your two cents, which is really hard. Probably going to take you two hours. However, if you're originating and you're not closing 10 or 15 loans a month, you have the two hours a day. Don't ever let anybody tell you that you're not you. You have the time, maybe block it in 30 minutes and just don't like everything, like actually comment and watch the videos and watch things and interact with people. People will genuinely appreciate it and then they'll go back on your content as well. So you have to have a long game.
But understand to have a long game, there's things you have to do every day. I Understand there's days off. I understand there's days that you may not feel like it. However, that's discipline, you know. And you talked about when you opened it up, Mike, about Tom Brady. Tom Brady, I think, said it best in his induction into the Patriots hall of Fame. He's like, you got to do what's hard, which is be consistent for awfully long periods of time. And I think consistency. Some of the best originators I see right now haven't even been in the business three or four years. They don't have bad habits. You know, they don't have the it was raining refis and I'm still drunk on them. And, and there's nothing wrong with that. I'm not judging anybody. I just want people to really, really think before they act and really, really hone in on that.
[00:10:09] Speaker B: So if you're an accountant, executive or realtor or a loan officer, just in sales in general, there's two ways to look at it. You could be a. You could be a farmer and a farmer's broker. So if you're a farmer's broker, meaning that you're, you're still farming, you're still planting seeds, you're still going out and you're talking to people, but then are you also purchasing other farms leads in order to sell them? You're brokering other leads, meaning. So like, if you're an account executive, are you working with other account executives that maybe, you know, one broker just isn't working for them? And so you're networking with, with your colleagues to do that, and then at the same time telemarketing or calling other people. And if you're a loan officer doing the same thing, networking within your own trade. And so. But the key behind that is still getting on the phones. So what kind of gratitude then? Can we, you know, you said gratitude number one for that. So in grad, what will be gratitude number two instead of working with competition or having the competition mindset? Now, we can't help it because we're in that business, but how can we have gratitude with our own trade so that we work with each other instead of against each other?
[00:11:17] Speaker C: No, that's something I've spoken at length about. I think the, the challenge is that you can't have a zero sum game mindset.
You know, it's not about annihilating everybody because we see what that leads to in the world. That's called authoritative. And you either lead to fascism or communism, which then isn't good for everybody else. I think I, I get the competitive nature. However, let's, let's use sports.
If you think Magic Johnson doesn't achieve what he does without, you know, Larry Bird and Larry Bird vice versa, you're crazy if you don't think Jordan not losing to the bad boys for multiple years doesn't motivate him. You're absolutely crazy if you think Kobe not that divorce with him and Shaq and then Shaq winning a title and then him motivated, staying with it just to beat him. One more. If you don't think competition is your best friend, then you really don't want to compete. You really don't want to add value. You just want to annihilate and take. And the market treats the givers a lot better than the takers.
[00:12:18] Speaker A: Very well said. And in an insulated world, everyone believes they're competing on rate or programs or guidelines.
Sean top loan officer said the other day on a podcast, really stood out to me. People want to work with people they like, people they respect and people they trust. On one of your clips you talked about how nobody can grow you better than your strengths. And you said time would be better spent maximizing your strengths and trying to improve a little bit on your weaknesses. You talked about how 60 of a personality really comes from those top five strengths.
What can alone and people constantly say get on the phone. Which is more of a behavior. But as far as a technique, where can a loan officer or how can a loan officer change their personal branding, do you think, to earn more respect from builders like you were saying, or real estate agents?
[00:13:16] Speaker C: Well, first of all, you know, that was a multi pronged question, you know, to focus on your strengths, triple down on your strengths and then your weaknesses look like blind spots. First of you, you need to know what your strengths are. You know, I'm a firm believer in the Clifton Strengths. There's a 34 Clifton Strengths Test. It's a subconscious test. If you try to rig it, it figures it out. A lot of the tests out there are rigged. I think you have to do a lot of self discovery as well as working on yourself. There's even a better test called the ocean or the big five. It gets even deeper. It's 40, 45 minutes and 245 questions. Now that not only gives you your strengths, that breaks it down to an exactly what area of it. So I would say first so not to get lost the, the, you know, through the trees, the forest is. Take the Clifton strengths And then yeah, 90% of your DNA is your top 10. And by the way, anything of your top 10 gives you strength and gives you oxygen. So why people don't like working on their weaknesses, it's because it drains them. However you find their strengths, that's what you're really good at. You know, I think one thing that people have a challenge with is they fall into this. Following your passion. You absolutely should follow your passion. I'm the first one to say it. Some people say you shouldn't, because people that say that are already well off. I don't believe that. People that follow passion, they're usually good at it, and that's what your strengths you're good at. So I don't think there's anything wrong if you find something aligns your strengths with your something you're passionate about, because together it'll grow there. So, yes, that's the first part of your question. I. I would tell you to take that test and really, really dive into it. I think it's like $50.
And then around your strengths, start researching other people. You know, the great thing about content is tell people all the time, more than happy to rip off and duplicate anything I've done, anything I've done better, anything of that nature, I think it's perfectly okay. I mean, you make it sound like I haven't studied a lot of the greats to really get ideas from them. That's absolutely ludicrous. If Everybody thinks they're 100% original, because nobody is, doesn't mean you're copying, doesn't mean you're taking credit. That's a big difference. Can acknowledge where you got that from, and people will appreciate that genuinely.
And then the brand part, builders, you just got to go out there and meet. I don't know how much you'll hit them up on social media, which you can. There's a lot of real estate agents that handle builders because they'll have their own possible little group that handles them, and it doesn't mean it's their own in house. It could be somebody that they're partnered up with.
All right, we just got to go out there and mil, you know, meet them. The Home Builders association, there's different ways to go about meeting them. And, and that one does take a lot more time. I don't. I don't think anybody, unless it can happen. Something all of a sudden happens and you get right into a deal. But I would tell, like, anybody, you need to do some research and development and realize who's in the field, who's doing what, because it's all public record. Who's Buying land and who you have real opportunity. And then genuinely ask them, you know, hey, can we have a meeting? I'd like to get to know you better. I'd like to get to. Not today, however. I'd like to get to know what some of your struggles are. And then maybe one day, if I grow myself or I may be able to handle those struggles, we can grow.
[00:16:14] Speaker B: It.
[00:16:14] Speaker C: It sounds cliche, it sounds cheesy. You know, if you don't want to ask for coffee, you know, I grew up in the construction world. I'm not saying it's absolute when I say this, but there's a high probability that a drink may work better. Definitely a meal, you know, something of that nature. And it doesn't have to be, you know, builders are very blue collar, even the most successful ones. So you don't need to make it some fancy steak dinner, you know, a Mexican restaurant, a burger joint, something of that nature.
Just sit down. I think would be genuinely appreciated because too many of those individuals just have people coming and trying to take from them all the time. And when you're trying to give something back, and it could even be if you're really good on social, that you start putting the houses out there and even notifying and doing joint work with them, you know, it could be greatly appreciated. But yeah, to go down to the. The gratitude again. First and foremost, the ultimate gratitude, Michael, is that we are going to have more units just like we had more units, and we're gonna have less originators. I haven't seen the numbers yet, but I promise you less are gonna. So from 23 to 24, I forgot the number, but a lot dropped off. You're gonna see another drop off. However, it went from 4.3 million units to 5 million units. Now they're thinking 6, you know, so you're talking about a whole 20% gain. Let's just say it's 15 or let's just say it's 10. 10%. They're pretty much the real estate organizations. The builders are saying it's going to happen because they're putting that inventory out there. So get that. Let's say there's some refi, some seconds, some other people start to sell. A little bit of movement happens, you know, people down another half million dollar. You know, half million units is not a terrible thing. I think the third real gratitude people have to have is for the amount of units that they're closing per month. They've got to get over this addiction to volume, because volume doesn't really solve the equation because it really depends on your area. I mean, I know originators today that are doing 8, 10 loans a month, but it's mostly USDA or smaller loan amounts. And they don't have a problem. You know, they're not at level one of the hierarchy of Maslow's hierarchy. They're not, they're, they're way at a higher level. You know, you do two loans, they're probably heavy competitive. In certain markets you may not make as much. It's just not even the opportunity for revenues there.
[00:18:22] Speaker A: You talk about people living off of old comfort and the comfort crisis. Eddie, you talk. I think it probably applies mostly to people that have joined in the last four years.
How do you see going into this new era? What can people do to speak, Use the new Year's as a way to switch the switch and say, okay, what you just spoke about is new inventory available. Let's earn some respect around understanding shelter and, and how I can help more people get into it without carrying some of that baggage of having that, well, you know, old comfort. Or explain maybe a little bit what comfort crisis was.
[00:19:02] Speaker C: Comfort Cris. Great book. It basically illustrates something so true. All the must haves we have to have today to live were nice haps. You know, nobody took warm showers. I remember when I took cold showers for nine months just to challenge myself in 2023, people thought I was clinically insane. And that's how people took showers. You know, I don't know when the water heater and all that was done, but consistently warm showers is a, is a newer generation thing. And I think like anything with added prosperity does come a softening of the nature and the comfort that I don't think it's good. I mean humans were meant to struggle. And what I mean by that is every day is a struggle. Getting up, going through the motions is a struggle. Part of life, it's the steps of life. And I don't think you need to avoid them. And, and there's a lot of comforts that, you know, it was very comforting when it was 2, 3% and refis were raining and everybody wanted to move a house and everybody was paying, you know, 10, 40, 50,000 above asking price and things like that. Those days are gone and they're not coming back. That's what I want. Everybody, if they accept anything is 80, it's like early 80% or below 5% interest rate. There's a lot of people that are loan locked. Either the rate's too low or they paid off their house or they're close to and they have no real reason to move, even though if the house is too big, but what they don't want to do is sell it to then buy a house that was way more expensive than their own house.
You have to understand, you know, what happened in 08 is the reverse. You had a lot of people who stayed in a house for a long time because they had negative equity. Now they have incredibly positive equity, incredibly. And you know, much lower payments and they don't have to pay inflated on something else. Like it's done a complete backward inversion. And you have to understand that to understand.
[00:20:54] Speaker B: So what kind of change then do you think needs to happen? We're talk. We've talked about attrition. We've talked about reality checks. We've talked attrition, meaning originators are going down. We talked about the reality checks that leaders and originators need to have.
[00:21:08] Speaker C: More loans are going less originators.
[00:21:10] Speaker B: Yeah. We've talked about how one of the things that you did to appreciate discomfort was a cold shower. I do cold plunges. So how much more does a person or a team have to commit to discomfort in order to focus not on the discomfort, but focus on. It could be worse, but we know it's on the other side. So how do we focus on the other side while going through discomfort? In other words, what kind of discomfort do we mentally, emotionally or internally have to go through in order to know what's on the other side and focus on that?
[00:21:48] Speaker C: I think if everybody annually read the book Man's Search for Medium by Viktor Frankl, that could answer a lot of it because it's going to have to come from within, whatever that discomfort is, because it has to be your goal. I don't want to ruin the book. I think it's one of the greatest books. I think it's the greatest book ever written because it basically teaches you that if you can give your purpose of pain, you can endure anything. I think people need to understand if they really want to be in this industry and the prices that go, I mean, I. You're still going to see six something million units for the next few years. You're going to have to have 7 million units. That's not a horrible market. That's just the late 80s, early 2000s, before 21 years in a row of falling knives and rates and all that. Those, those days are gone. That's the old guard.
It's not coming back. You definitely with inflation, you're not going to see quantitative easing. That's the only Thing that took interest rates below 5%. There's some reality people have to. The great news is this, Michael and Mike, a lot of people aren't going to do the work.
If you just go do the work right now and talk less and do more, it'll rain. Loans now don't do what a lot of originators do. After it starts raining a little bit, they give up because they forgot the road they had to do to get there. Like, if anything, refine it, get better, maybe get quicker at building those relationships and fostering them and go from there. I would also tell you that holding high standards is probably a pretty important part, too.
And what I mean by that is if a Realtor gives you their junk loans and now there's data out there to see all the business that they're doing, then you should probably fire them.
And I know nobody wants to hear that because that Realtor gives them this type of loan, and it's a loan that probably stresses you out, destroys your mental health and doesn't let you go focus on the other ones or, you know, have the conversation, ask for the better stuff. I do all your tough stuff. You're just using me at this point. I'm not going to be used. So we need to see something or this isn't a relationship. And it's okay to cut those ties. You got to have that courage to cut ties with people.
[00:23:47] Speaker A: Yeah. It goes back to people, work with people they like, trust and respect.
If they're giving you their junk loans, there's somebody they respect a lot more than you that's getting their, their conventional loans. And you need to address it.
[00:24:02] Speaker B: I don't know if you've seen this interview with Urban Meyer. Urban Meyer's for, of course, the former coach of Ohio State, a national champion, of course. And. But prior to them coming national champion, they were in some kind of mode. They were suspended and they couldn't go to the national championship game because of, because of suspension purposes. And he goes and talks about how he. He's. He's in the announcers group for ABC or ESPN or one of the. The TV booths. And he's watching. He's watching Alabama come onto the field, you know, roll, Roll Tide. And he's. And he begins to look at what they're doing. He sees how the players are coming together and they're giving them the fist bumps. And then he. But even more so then he sees the coaches coming by and he sees what are they doing before. Remember, he's up in the TV booth and he's seen everything from a bird's eye view. He's watching what are they doing on the field. He's watching the players. He's watching the coaches. He's watching even the support staff, the athletic trainers and people that are helping out. And he looks at that. He's watching the whole culture as he's watch. Yeah, he's watching the whole culture. And from then on in the entire broadcast, even though he's announcing, he's doing color commentary in the booth, he is furious. And he's going and talking about how he is, like, watching everybody. And he's texting all of his coaches, and he's texting all of his players, and he's saying, we got to do this, we got to do this, and we got to do this. And from there on in, for the culture that he established, he called it the chase.
And he goes and says, hey, we're going to now pursue greatness based upon what we have seen, based upon this national championship team. Everybody outside of the Ohio State culture doesn't know what's going on because he says, the chase, the chase, the chase. Everything in the culture is the chase.
So, Eddie, my question to you after telling you this story is, is there a company, either your own or somebody else's, you don't have to name the company, but is there a culture that you have seen either in. In the mortg yet that you say, you know what?
That's the chase, either in the executive staff or in the sales staff or in the operation staff. That's the company that we need to chase. Because for the focus of 2025, there are. There's all kinds of success. Maybe an ops, it's good here. Maybe it's in sales, it's good here. Maybe it's good in. In executive staff here. But is there the chase that you think, that you have seen, that you would like to pursue?
[00:26:42] Speaker C: No, I don't. I mean, I think there's a lot of great organizations that have great blueprints, that have great leaders, so don't get me wrong on that. However, I think that the industry's culture has been affected since the crash as well as from what the ill effects of what Dodd Frank did. And I don't know, it created a very mercenary culture in this industry. And then a lot of people want all around, and I'm not sure. I'm not sure. You know, it's kind of like you're seeing it now in college football, the nil, what it's doing to the culture. I Almost think that Dodd Frank was the NIL bill too to our industry. And I'm not sure that anybody has any organization you can strive to have. I think there's a lot of organizations that have good culture, but you're talking about elite. You're talking about that Bama run with Saban. I don't see anybody with elite culture out there just because.
Yeah, I just don't see it.
[00:27:39] Speaker A: The big piece you said is the NIL as somebody that is working with clients right now that we partner up or sell into larger lenders now talking to a lot of the Top hundred top 50 like you, Eddie. And on the retail side, the players are running the show just like college in the nil meaning if you don't cater to them, not just in their needs to sell, but in the little trenches like the P and L. And who's going to pay for an LOA and who isn't. And the LOA to me is the comfort crisis. And I think a lot of people are not doing enough business where they need a full time assistant, especially if they're 100% commission and they have a W2 assistant working with them. But they have the ability to ask for it just like players now. And I think that's why Saban left. You can't run anything from an organizational level if you're flying the plane home from the national champion or flying to the national championship and you have players coming up to you asking how much money they're going to make for next year. And they have to because the NIL actually starts the, the transfer portal starts before the national championship. And I, I see it all the time in, in mortgage, it's, you can't build a culture until you check with the players to make sure they're cool with it because they're not going to leave because of probably Dodd Frank and then the fact that everybody sells a lot of GSE loans so they're all the same price, more or less, that you can't, you can't have a sale and then say I'm going to run it this way.
[00:29:18] Speaker C: My answer the question very firmly. No, I think you're in the nil. I mean there may be some exceptions that happen. Those exceptions are only going to happen because people want to join that organization because of what's within their four walls. They're still going to deal with a lot of adversity because it's a recruiter game, it's a, you know, 90 day rate sheet game. It's a send them all here Game.
Yeah. No, I think that Dodd Frank was nil for this industry. I just think that we are, I think it's 14 years old now, but it really didn't have its effect for another year or two. So you're talking about 12 years deep.
Yeah, I don't, I don't know, dude. I don't know.
[00:29:56] Speaker B: So then does Brank. How much does branding then? I mean nil is about branding an athlete. Yeah, right, right. Wow.
[00:30:05] Speaker C: That's what it is on paper. It's free to play in a nice way, in a legal way. I'll just call it for what it is.
[00:30:13] Speaker A: And in the college sports, college football makes more money than the NFL, some can argue. Or is. Is on pace to if, if it continues to go. So it's not like there's some charity going on and you know they are. It's becoming run that way. I, I heard yesterday a top leader in the mortgage space or at least he runs a top 10 company. He's getting, he got out of wholesale. But he talked about in retail loan officers sometimes, you know, don't want the management or kept being told what to do and you hit a sales target and they say rather than great job, okay, now you got to hit one higher. By people that have never originated before. When you talk about the bottom up philosophy and leadership, Eddie, and how you. Almost everything you've told somebody else to do, you've done yourself and I know you have. And you've been in the trenches and you've seen the best days and the worst days as an originator, as a manager of a branch region top company.
How do you, I guess going now leading from the top down and knowing that there are certain players or brokers that, that want to be heard. How are you taking bottom up philosophy and leadership into 2025 with the market we said exists today?
[00:31:30] Speaker C: Well, you got to always be providing value. You know, if not, I think a lot of the challenges originators run into, they really are just glorified rate salesmen. And that doesn't mean that they have to have the best rates to win. That just means that they're a glorified rate salesman compared to who the borrower is shopping with, if shopping at all or if they just feel like shopping on their own.
So that's one of the big parts there is what I would tell you is that, is that you have to.
Yeah, man, we can go on this one for a long time, Mike. Well, what part do you want me to break it down to like one or two points or what exactly.
[00:32:07] Speaker A: When things get tough, let's say in the summer. So you had a great spring. You were doing, as I'm saying, as a broker, and I'm working with you. Or an ae. I'm an ae. I'm working with you. The brokers are getting a lot of business in. And then right end of June, whether it's a quick rate hike or in your head, you feel like people are going on vacation, you're not hitting those numbers that you were hitting before.
You've been there. Like, how do you keep motivating them to not go to the beach for the summer, take 30 days off and, and let them know that's the worst strategy.
[00:32:38] Speaker C: It's funny you say that. I'm not sure how much of it you can actually avoid. You know, like I say, I have a theory that I call originator syndrome, and it's a legit one and there's solutions to it. Because if you just provide what the challenge is and no solutions, then you're just an a hole.
You, you just have to have certain understandings how the originator mindset works. You're going to have totally a lot of people that do that. Nothing you can do about it. Don't take it personal. That's just what they're going to do. Originators are really good at crushing it for 90 days and putting the pedal off for 90 days. That's just. I've seen it so much in my career in every form. When I was a broker, when I had retail, you know, even, you know, now that we're 100 TPO and then we see the business fluctuate and they're like, oh, yeah, we took a month off, we took the summer off. Like, you know, the only thing you can do is stay consistent and hedge your risks of the business.
You know, why I like the TPO model is only because, you know, there's thousands of brokers, some are down, some are up, some have problems in their areas.
Originators, you know, I would. If, if you can. If we can figure out that formula, Mike, we can be billionaires, maybe even trillionaires. We could sell that formula. But I.
My 22 year experience with the originator syndrome and, and having started off as a call center lo first, then street, then dealing with builders and then leading them and growing them. You just have to understand it. And it's one of the things that I said before the show started, and it goes back to what I even said about Dodd Frank.
Never has there been a time that originators make More money per loan. It's been shown in the expense per loan with the least amount of skills.
Least amount of skills. And that's not an insult, that's a reality. It's because you just said it. Loas this staff, to that staff, to this. They don't have to. To mega marketing teams, they don't have to. Why do it? I mean, just go be a market to go get business. I don't blame them. I'm not. I'm putting myself in their shoes. You just have to understand that that's. And that goes with AES too. They're not going to be consistent. They may get, you know, a lot of people get a number that they need in their head.
They reach that number, great. But then it's like, oh man, it double that number. You'd have to do triple the work. Yeah, never mind. Like people get a number and then they stick to it. That's just originator syndrome. That's who it is. I know that every originator would tell me it's not them. I'm going to look at statistics and unemotional on that one. I'm not judging you if you do or you don't. That's not for me to do. That's not for me to even criticize or even dress that up. That's just. I think you just have to have a certain level of reality and understanding to it and as crazy as sounds, empathy. Hey man, I know you crush yourself for three, six months, you want to take a month off, you know, it just affected your paycheck, you know that. But that's okay because you didn't care. Yeah, yeah, yeah. I think you just have to have a little bit of that given, you know, that push.
[00:35:26] Speaker B: How does the originator own their business in the sense of instead of concentrating on, on how much they're going to be able to earn, but actually own what they're doing, own what they're learning and own their.
Themselves as an organization of one to, to expand into. Into that. Because once they have the willingness to own their business, you know, I'm not, you know, they're not going to be concerned about, and we talked about this in our last show, they're not concerned about earning 125 to 200 basis points on their loan because at the end of the day they're earning anywhere between 65% or 65 basis points. However, they're getting compensated. Why? Because they hire assistants and they hire coaches and they marketing and so on and so forth. But in order to do that. They have to have the mindset then to own it.
Right. And so whether you're an accounting executive or an originator, what do you think it takes for that person to say I need to be able to own this business, not concentrate one unit at a time, although that is going to happen. But to own their entire business as a trade so and so they don't have to worry about price and they worry about. And they're concerned about their business to provide that value.
[00:36:40] Speaker C: I think it'd be a great road if people studied Nick Saban. You gotta go from being a transactional to a transformational person. Because he talks about his transition where he almost got fired at Michigan State and they were talking about it and then he transformed from a transactional to transformative is what I would tell you. And that's where he later become known for the process. He never really had a process till that moment. His process that became and super famous only became super famous after he was right at the, you know, brink of possibly getting, you know, it's not like they had given the threats, but he even mentioned it at our event where there were discussions about firing him. And then he pulled off some victories because he didn't worry about the outcome, he worried about that moment. And if you can't get it done there, brush it away. The milk is spilled. What did you learn and how do you apply the next play?
And as we know after that, and I think he said that was 1998. So then he left LSU, won a title, went to the NFL, came back and then won six. I mean, it's just, it's a pretty remarkable run if you think about it. And he just retired last year. But if you think about it over a 25 year period, just where he had the idea to transform it, you know, and it takes a while to refine it and get there and get people to buy in. So you're talking about over the next 25 years, he won seven titles and played in even more, probably like 10 or 11. Whatever it is, it's pretty monumental. So I would tell you it's whenever people are tired of being transactional and they want to be transformative, they just have to, people have to be okay with whatever their business model is. No different than I was okay to have, you know, retail wholesale and then go 100% TPO because we do non dell as well.
I was completely okay for different reasons. You have to be completely okay. And you mentioned earlier, Mike, about somebody that was wholesale retail and then got rid of Wholesale. You have to be okay with who you are and you have to be, you have to understand, like I say, I go back to it over and over and over again. If you understand originator syndrome, the strengths and the weaknesses of it, and just focus on the strengths, it'll be pretty good because originators love to focus on the things that are not going well.
However, there's no total package out there. You know, nobody out there is good, fast and cheap. You know, you pick two and you go, you know, if things are cheap, then they may not either be good or fast or you know, or ease, whatever you want to call it. You, you have to just understand to pick your battles.
Chick Fil A is a perfect example. It's fast and good. It's 20% higher than the average type of quick service like you. You have to understand that, you know, five guys that burger more like govy loans, as I would use that comparison is, is really, really good. It ain't cheap and it ain't fast, but it's really, really good. You can even say it's, it's somewhat easy to get because they only had their menu so small so they, they would meet at least the ease and the good part, but they ain't cheap.
I would actually say they're pretty slow too. Not because what they're doing, not that they're slow and you know, have apathy, it's just to make something of a higher quality. It's different than McDonald's. That's not a comparison. You know, it's what I always say in this industry that doing conventional loans is like going to McDonald's. Predictability, you know, what you get. There's only so much on the menu, a lot of options to qualify because those individuals usually have a higher credit profile. So it's really the consumer, they want something quicker. And then if you want a bigger, you know, on the gubby loans that take a little bit more work, that's like kind of going to five guys is the comparison that I'd say there. And just understand that it may take a little bit more. However, everybody knows that the originator, the realtors, they all know that those situations take a little bit longer still within a 30 day window. Don't get me wrong. However, understand that.
And even though we've done them in 10, 15 days, understand that the chance of those doing it in 10, 15 days are slimmer than a conventional. And really, like I say anything in the, in the book the Art of War, the number one thing that they teach you is about terrain and undergrounding your surroundings. That's what people need to understand their surroundings of this industry and what they Saban says control the controllable. So to answer you, Michael, it's really about learning how to become transformative versus transactional.
[00:41:01] Speaker A: You don't know how to solve that loan officer piece, but you obviously embrace it, which you understand it. One could argue you come into the new year, you got your New Year's resolutions.
By the time they wear off, people stop going to the gym. It's about almost time for the beginning of the purchase market. So now you can go gung ho into the purchase market to keep going. And just as that's kind of wearing off, you have your event and you talked about how the other one still is in your mind. Can you just give us a quick plug for the loan offices out there, what they could get from that event and why that might be the great turn the Corner event of 2025 to keep that MO motivation going.
[00:41:41] Speaker C: Look, speakers are there to give you one or two ideas that can revolutionize and add a chink to your game. That's what you just need to realize is that our event is, is more about camaraderie and any originators. You know, I have originators that come from different companies and competition. I don't care. I invite everybody. I don't anybody pays for the ticket.
Significantly subsidized. It's just our way of paying it forward for the industry and for what I believe is the right thing to do.
You may meet people that's always been a big one. You may grow your business. You may meet other real estate agents that are at that event.
Who knows, you know, you may meet the person that gave you some tip or you call them in a situation like there's, you know, Adam Smith talked about capitalism in the invisible hand. And what it really says is when you put all these multiple dimensions into play, it's like an invisible hand shows up. And I would tell you it's the same way with growing your business doing that there will be a cause and effect of the invisible hand.
And yeah, I mean you get to see Tom Brady. You know, Jordan Peterson will be there, Janine Driver, Jesse Itzler.
[00:42:46] Speaker A: And we asked you on before all this so this wasn't like, oh, you'll come on and then we have to plug it. I, I just when you hit breached.
[00:42:55] Speaker C: It yesterday and you asked me like three, four weeks ago, so. Absolutely. Before anything went out. Yeah, yeah.
[00:42:59] Speaker A: I just to prove the authenticity of you. But do you. I Do want to ask, like, is. Is it at a. A stadium? Is it at like a big library hall?
[00:43:08] Speaker C: Like how it's at the bends at the Falcons stadium?
[00:43:12] Speaker A: I was going to say, because this one's got to be go down as one of the most attractive mortgage events where it's very clear every originator is invited as a chance to be better.
I don't know how you could miss with these people speaking. I, I just. That's the first thing that stood out to me. And in getting to hear Tom, I mean, he really instills that you have to, like you said, be consistent and continue to put in the work. And that's the message you really want to hear right around that.
Is it the first week of June?
[00:43:49] Speaker C: Yeah, June 4 through 6.
[00:43:50] Speaker A: See, I was looking it up.
[00:43:53] Speaker C: Yeah, that's some of the advice we'd heard over the years because one time we did it in January, another time in March, and people had kind of said, hey, can you do it around more of a warm weather type. And Atlanta is very central, not just because it's home office for us. We just found that to be very central for people to fly in because of Delta and just certain airlines. So, yeah, when you guys asked me to be on here, those secrets have been kept secret for probably six months because we had been working on the speakers since the last event and, you know, there were some things that had to get done, but then they don't release it till a certain amount of time before the event.
[00:44:26] Speaker B: I want to reference one of the. Your. The guest, Jesse Itzler. I mean, he, he went from selling water or I should say airplane seats to water to or, you know, or marketing to a basketball, to the basketball team. There's a lot. But I think one of the, one of the thing. One of the traits that I see out of him that I. That is similar to what originators or can executives go through is he is the willingness to make the phone calls and then the willingness to take the deliver good and bad news because you can't reach that pinnacle of those types of selling of businesses without the difficulty of understanding that that's gonna be part of the deal.
[00:45:14] Speaker C: Just like I'd tell any originator, you'll be lucky if you go three for ten. Problem is, everybody wants to go nine for ten. And that's what. When you can have that epiphany, you can get really, really far. I mean, look, it was kind of wild. Some of the stuff Jesse Itzler shared was when he was doing that coconut water that he ran the New York Marathon in it. And all of a sudden we knew about it. Like, you just have to have little genius ideas like that. Like that's genius. You know, true genius isn't. My IQ is this genius is thinking outside the box and bringing a lot of, you know, energy to something off a little. Like think about. He ran. He was going to run the marathon anyway because he's crazy like that. And anybody that runs marathons, all that commend you. I just never plan on ever running one and. But he ran it in that outfit and then all of a sudden people knew all about it. It's like genius. Like he's. You got to know how to be a good marketer and not.
He didn't walk around and just tell people drink my water because you should. I think that's what a lot of originators do. They say, hey man, look at my rates here. I'm like, well, you're really cheapening yourself out. They would then inquisitive and you got to create a moment of engagement is really how you have to have to do it. Instead of being transactional like we talked about. He was very transformative. That's why he has sold.
I mean, look, he sold to net jets, you know, the, the airline business of his marquee. Was it marquee plane, something like that? I mean he sold it to Warren Buffett. Warren Buffett doesn't buy anything. It doesn't keep going up in value. So that tells you a lot of what you need to know. I know that he sold the, the water, but now I think he's somehow getting it back. He was explaining it last year. But you know what? Another great thing he does is he turns the page on a chapter. And if a lot of people did that, that'd be good if something. If he didn't get the sale or didn't get it, he turns the page. Next, if it went really well and he sells the airline, he'll still talk about the stories, but it turns the page and onto the new thing. Not trying to live past glory days. There's still a lot of people who want to talk about, you know, 2020, 2021 or you know, pre crash or the glory days. And I would venture to tell you that any year is glory if you're getting more business as a percentage of the overall volume of units. If you increase that percentage, maybe it's not as many units because there's just not as many units. But that doesn't mean that you didn't improve Yourself.
[00:47:34] Speaker A: They like to talk about the vendor exhibit halls before the financial crisis too as a big glory day in this, this industry the vendor halls are just not what they once were. But maybe that's because the margin, the loans are not what they once were.
[00:47:51] Speaker C: Well, yeah, you know what people need to understand is that bond holders are very upset with how much churning of loans happened. So you know that you're never going to see 106 or 108 again. That's the other part too to your absolute point that you got to have the margin understanding what is going to be happening with margins as well as servicing rights. You know, if loans refi a lot now look, given what's going on in the marketplace right now, some of those loans may stay on and then servicing rights may get a little bit stronger, a little bit better over time. I don't know. Like I said, For 21 years there was so much churning. You gotta imagine if some people are a little bit, I don't know, upset is the word because I don't think they take it personal like that. They just may be like okay, here are the risk factors now that we know em and then we cut them.
[00:48:40] Speaker B: Isn't this, isn't this like the perfect time then? I mean especially for you Eddie, to be the owner of a company. If you don't because of the low rate interest rate environment, you're not going to see a lot of those alone turning, churning then in the non QM sector we're going to have an up and down market but we have slow growth rather than exponential growth in values and there are prepayment penalties or early or early yield maintenance with non qm. And so that's, even if there is some kind of churning it's not as likely. And so isn't this more of a, I mean they may have been, bondholders may have been upset in the past. However in the future it looks like that with especially because we're coming out of a higher yield environment, low to high and with penalties and people keeping houses and slow growth but, but still growth in the housing sector. This sounds like actually it's a perfect opportunity just like Jesse Esser did to turn the page to say okay this is what was, was great in the past. This is what we can do in the future. Either make more phone calls, you know, the other side, the other side of making more phone calls. The other side of just having a, a new frame of reference to say well this is what we did in the past, it may have worked but we're going to do something different and we're going to make more phone calls, we're going to own our business, we're going to learn more, we're going to read more, we're going to study a little bit more of what our competition does well and then some of the stuff they do not so well and then, and then focus on that positive. So I think that, I know there's a lot of statements that are going on here, but really like this is what I'm focusing on right now. For all of our guests to say these are the things that we can focus on for change. These are the things that we're, we're going to be doing. And so what is, what is the, the next step? Not in 2025. People used to say let's get to 25 and survive.
However, because of this type of slower growth, what is the medium term over the course of the next five years?
[00:50:43] Speaker C: 20% growth in units isn't that slow. It's just not 100% is what everybody wants. They want back to the 2020, 2021 market, but that was an unsustainable market anyway. But I mean to go from 5 million units to 6, I think that's a very solid growth rate of units. Very solid.
[00:51:00] Speaker B: Does that mean that other company. There are originators that are leaving? Do you think that com. Smaller sized companies may have some attrition or even mergers?
[00:51:08] Speaker C: I think mergers and acquisitions will continue. I think if anything, the originators that stick it out, it'll just get, I don't want to use the word easier, but it will get simpler. They follow their plan, more loans will come in. They still have to do the hard thing, which is the consistency and putting in the work day in and day out.
However, like anything else, if there's, I don't know, on a street, if there's three less stores, that means the other stores get filled up more. It just. There's going to be more opportunity because of the attrition and because there will be more volume that's coming up year in units.
[00:51:41] Speaker B: Is that the type of. And I mean we should be grateful for that actually.
[00:51:45] Speaker C: Exactly. That's what I keep telling people. I don't see anything but abundance because I remember in 2023, people were furious. No, 2022 furious. When it was like we went from 14 million units to 5.3, the sky's fallen well, or 5.8 million units, something like that. I forgot the number for 2022. Somebody can look it up. I think it was 5.8 million units. We went to 4.3 million units in 23 and we went to 5. So everybody who's so angry at 22, 22 was a better year. I mean we may pass 22 finally this coming up year. And now you have a different perspective. But yeah, it's that turning of the page and learning new perspective and understanding there's a new guard. And understand history, understand what caused it, understand where things are moving. But there's a lot that could be influenced outside of the industry, obviously with interest rates. However, the Fed already said the most crucial word to interest rates. People are. I don't understand. They cut rates and it went up. Yeah, because they use the word inflation. They cut prime. That's tied to credit cards. That doesn't mean mortgage backed securities.
If anything, anytime they hear inflation, the investors want more of a return because their returns are worth less.
It works very, very similar. Very simple.
[00:53:03] Speaker B: I think the motivation in the cut and rate should be somewhat telling because a lot of people don't understand, hey, you know what? They're reducing interest rates because they think the economy is not going to be doing all that great. And maybe you can look, you differ on that.
[00:53:19] Speaker C: Define great.
[00:53:21] Speaker B: It's not go. We're not going to have the type of exponential profitable growth in gross domestic profit because of inflation. In other words, everything costs more. But that doesn't mean the profits are anymore.
[00:53:35] Speaker C: Isn't that more of the same in the last couple years?
[00:53:37] Speaker A: Maybe more of the same with all that money you were talking about, Eddie, pumped into the system.
[00:53:43] Speaker C: It's already there. It's gotta get pumped out.
[00:53:45] Speaker A: It's gotta get pumped out.
[00:53:47] Speaker B: But everything is. Costs more for the earning dollar than it was two years ago.
[00:53:53] Speaker C: It is except for originators. They make three times as much today as they did 15 years ago. So maybe they're paying a little bit more today, but it was. They've had the highest inflation rate of comp ever seen, as I've said many times that Dodd Frank was the greatest increase in lo comp in history.
[00:54:12] Speaker B: Do you think that's more so on the broker channel or on the retail channel?
[00:54:20] Speaker C: Originators are originators. One's the American League, the other one's the National League. They're still baseball players.
[00:54:26] Speaker B: Oh boy. I think that if you're, if you're a good originator, you're going to be a good originator across the board. I think that the, the originators that are.
[00:54:36] Speaker C: I agree with that.
[00:54:37] Speaker B: Right. But if you're only doing one to four units that's, that's when you're in the. You might be on the attrition table by, by choice and not by, by personal choice, not by company choices or broker choices.
[00:54:50] Speaker C: And I'm going to tell you that most originators are doing one through four units a month.
I don't know the number, but I'd say it's a high percentage.
[00:54:57] Speaker A: A lot of them are entrepreneurial sales in general. They are not going to change the page like they're supposed to. They have a number in their head and they think if they just change this or that, they'll get there.
And that's why 2025, Eddie Perez came on today to tell you to take back what is rightfully yours, which is the respect really and maybe the trust in your zip code and whatever your market is, there's less people competing against you and if you work harder, you stay consistent. Never in your own town have you had a better shot to be that person that everybody looks to. And the technology, I'll tell you, technology is there. Where you don't have Craigslist and dinosaur email, you have. And I'll tell you something else. And here's the big nugget for everybody right now in the digital marketing world, they are telling you that out on if you're using like Constant Contact or Mailchimp or any service where you're sending more than 15 emails a day. So like your gutters need cleaning etc, there is a high likelihood right now that you're getting a hundred percent to spam delivery on Outlook. Now that is just Outlook going through its thing right now. My point is there's never been a better way to broadcast than some of the pieces. Like Eddie said that Gary Vee teaches you the jab, jab hook. But I think to take back what's rightfully yours in 2025. Eddie. What.
How can, what should someone do here in the final week or two to put on paper, you know, is it, is it the actual goal setting? Is the journaling? Is it the make a video and play it for yourself later on? Do you have anything that you recommend over others on how to take back 2025? Get in that mindset before it's January 2nd.
[00:56:55] Speaker C: Oh, before January 2nd. I thought you were talking about for 2025.
[00:56:59] Speaker A: Yeah, no, 4, 2025, obviously maybe you should start today.
[00:57:01] Speaker C: But like I think you nailed it. Anything video is going to do very well. Video posted online, video texting, you know, all of a sudden sending video texts to friends, people you do business with saying, hey, Just thinking about you, kind of like one of those selfie ones as you're walking down the street, you know, exercising or listening to a book, I think can go really, really far because people are, are really thirsting for that human interaction. And if you thought about them, I mean, just imagine if I just sent you out a random somewhere, Mike or Michael video, like, hey, Mike or Michael in this case, thinking about you. I hope you're all right. Have a great one. You have no idea where you may touch somebody that day. But I would tell you anything. Video can't go wrong. And if all you do is video every day, sending out videos on selfies, sending out, you know, posting a video online, I promise you that's going to get you way further than trying to rate, you know, the next greatest paragraph that goes. Iral. I'm just going to tell you that for your business and for yourself, video is going to consistent. Video game will treat you extremely well for years. You just have to do it every day or, I mean, at least five days a week and just post a video, have some fun, put some music to it, do anything.
My whole point is, yes, for 2025, if people invest in video, not just on social, in video texts, you know, and it can even be if they don't even look at it, maybe they hear the voice, but they're showing, I don't know, a beautiful bird or the city or anything like that, that's going to go really, really far.
[00:58:37] Speaker A: I couldn't agree more.
[00:58:39] Speaker B: I.
[00:58:40] Speaker A: But since we're here at the end of the hour, I, I could go on for that. Mike, do you want to take us home with any final thoughts or questions?
[00:58:46] Speaker B: Absolutely. Let's take it home here right now. So, Eddie, number one, thanks for coming up on our show again. Deeply grateful, deeply grateful for you coming on and being completely transparent. We went over a lot of things today. Number one, being grateful. And number two, pick your hard. If you're going to flip the script, if you're going to turn the page, if you want to have more value, whether you're in originations or what, as a retail originator or whether you're an accounting executive or whatever it is, be grateful, pick your hard, go do it. And then the nugget at the very, very end, maybe even do it on video.
