Episode Transcript
[00:00:00] Speaker A: Hello and welcome to another episode. As we continue to do, we're at about 75 straight weeks where you can catch us on Thursdays at 02:00 p.m. live on LinkedIn. We do that so that our audience can participate and ask questions of our guests. And we have guests starting to fill up here weekly, which is a great sign. And if you can't reach it live, which most, most of our audience tunes in for the audio podcast. The audio podcast typically will hit every Sunday on Spotify. If you're listening on the Apple podcast, we are looking for some comments. We would love that. Google podcasts, some likes and subscribes. But if you're listening or you're watching the replay of this video, we do encourage you to participate in the live audience through comments that we can ask and actually showcase it up on the screen. And we do that at 02:00 p.m. eastern on Thursdays.
[00:00:59] Speaker B: And of course, we also are here at 11:00 a.m. pacific time. Say same bat time, same bat channel.
[00:01:06] Speaker A: So before we introduce our guest today, we did hear some sad news of the passing of someone who actually has been a guest on our show recently, Sue Buzzwell.
Did I pronounce that right, Mike?
And so we came across her, really, I hadn't known much about her till about a year or so or more ago, maybe a year and a half. And, boy, she came on the scene as somebody who had a message that is authentic and you felt like you really needed to hear more of. In fact, this passing is a little personal for me because I have been meaning to, and I've been talking to her about, like, how we could collaborate, but I've been meaning to reach out to her and really try and digest a lot of her content again and see if I could repurpose it in a way that I'm able to tell a story because the value she added, and that was her mission, which was paying it forward. Now, with all of her years in the credit experience, the value that she added was amazing for the industry because it really just broke down. What you need to know about credit scores and our entire mortgage industry, all of our loan officers know a lot about teaching credit, but she went in a new way, in a new angle, where you learn the power of the different credit score modeling. You learn the power of how a consumer's access to Fico, and if they knew, you know, how to pull it, used to be like, oh, well, that credit karma score isn't your mortgage score. And that was the end of the conversation, like, I have to pull credit. Tell you what a mortgage score is. She really changed it into how you could actually go out as a consumer and for free pull your mortgage credit score. So she had all these tricks and tips that I really wanted to consume more when I had a chance to slow down. Some people want to slow down and read a book. I had been meaning to go back and like read many of her posts and then have that more meaningful conversation with her. Won't be able to do that now. So very, um, very, very tragic and condolences go out to her family. Any thoughts, Mike? Uh, before we, you know, move, move forward with the show?
[00:03:33] Speaker B: Yeah, I had a chance to have some one to one conversation with sue, list a number of times regarding credit and some, and during that time period, especially over the course of the last few months, talking about some of the changes that are going to be happening in credit scoring, how it's going to affect underwriting in the future. And even very briefly, and we may talk about it a little bit today, is how AI is going to get involved in credit scoring and mortgage underwriting. In regards to how the credit scoring is going to change or the movement of the credit scoring model, I should say, because I think the general consumer just assumes that your credit score is the same credit score. And then her willingness to expand on the education, not just understanding, hey, you got FiCO eight, FiCO ten, vantage score, whatever it is. But they're also. But now and then she was beginning to start to introduce how other forms of AI technology and the source code behind the credit scoring could be utilized to help the consumer understand credit scoring better. So definitely a force that will be missed. I'm missing what she had in her mind. I'm going to miss what she had in her brain and what she was getting ready to post. So definitely gonna miss her.
[00:05:06] Speaker A: Yeah, she would tag me like quite often as somebody tag, send a message and I never really totally thanked her enough for it. And you know, then, so a reminder to everybody, if you've been meaning to do, to reach out to somebody in this industry for some purpose, dont let another day go by. Dont take it for granted. Reach out and say your thank yous. With all that said, and the best segue I could probably do is the industry is very close knit once you start to get involved in it, especially nationally. And thats how I met Michael Brady. We met through a couple different conferences. And as I was growing up in the industry, I always say he was somebody that made sure everybody felt comfortable. So I was one that didn't have like, the close knit groove. I was building it. And he would say, you can come along to this event or come check out this with me. And then he eventually became a client of easy mortgage apps in the early days. So we did get to work a little bit there, right? We did a pilot. Right?
With the app.
[00:06:20] Speaker C: Yes.
[00:06:21] Speaker A: Yeah.
[00:06:21] Speaker C: Yep, yep. Yeah. It's what, ten years ago?
[00:06:25] Speaker A: Yeah, it was about ten.
I mean, we actually had about 200 clients, like, so when I, when I kind, when I sort of forget, it's. It's actually we had a lot of them, so. And you always intrigued me. So I guess you could make an introduction to yourself. But how. How I always perceived you as a step above was you handle a lot of, if not all, of the technology initiatives, not just from a technology implementation standpoint, like actual the technology side of it, but you also did the strategy and innovation side of it. You speak to sales. You have this way of knowing how sales is going to operate, what they want. And so that you had that. So you were involved in a lot of ancillary technology decisions around sales CRM, and then you also, I would catch in the middle of capital marketplace. So you obviously know capital markets very well, too, which is ironic, I always say. With our app, in the beginning, we spoke mostly with CEO's, but then the people in charge of capital markets, there were not many, like chief innovation officers or even ctos. I feel like in 2010, it was CI, maybe they were coming out of the crash, but it was like a CIO that knew how to do ethernet cords and set up the printer right, and make sure that was running and wasn't, you know, and you're going into people's intranets. And then, so the head of secondary actually was always the one that, if not the CEO, that would make the mobile app decision.
And then I think that changed, like when the point of sale and the new age CRM came out, but long winded way of saying, thank you for coming on the show here. We appreciate you. And if you want to add your background or the parts I missed and your journey.
[00:08:21] Speaker C: Yeah, no, Michael, thanks for having me. I appreciate it. Michael, it's nice to meet you.
In your podcast, how often does it happen where there's three mics?
Uh, well, actually there's six mics, so there's three microphones and then the three mics, you know, sitting here talking to each other. So how often has that happened?
[00:08:40] Speaker A: Only one other time somebody pointed it out. But I don't even know if it was a podcast. Somebody said, oh, Mike Mills was on the show. And he said, yeah. And I said, this is a lot, but he didn't make the good Mike joke you just made.
[00:08:52] Speaker C: So, yeah, we do have no, Keller and I have known each other a long time, and over the years, his.
You've always intrigued me as well, Keller, because your mind is all over the place. You're very forward thinking from an industry standpoint, and you're still that way. So you bring in all this what if types of scenarios and makes us mid level ImB guys like, hey, we never thought of that. Or, we're so focused on our business, we don't get a chance to globally look out and see what's happening in that. So I've always appreciated your insight. Friendship. Middle of the night, Keller is texting me. He's like, hey, what do you think about this? And I'm like, good God, does this guy ever sleep? And I don't think he does, honestly. So. But, no, I appreciate you guys.
[00:09:43] Speaker A: Yeah, that's accurate. Before I go forward, then what, what would you say that most Imbs, like you said, are focused on the, you know, today and what they're doing? What is that right now? And what was that say during the bear times the last two years? And really, what was it during those high times where people were so busy, they couldn't do much, but they had money to do it?
[00:10:08] Speaker C: Yeah. So, yeah, so, starting now, going backwards, you know, everybody is surviving. You know, survive 25 is kind of that new mantra out there. You know, us at leader one.
[00:10:23] Speaker A: We'Re.
[00:10:23] Speaker C: Waiting for that refi boom. We're waiting for that next tranche of the $3 trillion of mortgage business to start hitting as well.
We, with our executive team, our board of directors, our division managers, all of that stuff, we sacrificed every employee within the organization, sacrificed for the last several years to get to that point where we're starting to become profitable again. Um, and a lot of IMBs are still at that cusp of, should we keep our doors open? You know, what's the next few months going to be? Can we make it to the end of the year? I I feel for them, um, because everybody has gone through that process, um, to understand what's going to impact our employees as. As an IMB, you know, today we've got 680 ish employees, and, you know, myself and the rest of the executive team and company, we're always focused on how, you know, this is a family of ours, and we've got to take care of these people. And we've got to keep this organization in place for that next generation of leadership salespeople to come in and take over leader one, because we're not, you know, a lot of us are at that age. Wherever I, we want the new ideas. We want the younger folks to come in and propel leader one into that next gen of business stratosphere.
During the last two years when everybody was getting the margin calls, oh my God, we get the margin calls. And it wasnt small dollars, it was tens of millions of dollars. And luckily, with our conservative approach as leader one, we had the capital, we had the net worth to survive all that. And then the big refi boom happened and we replenished a lot of our reserves that we spent during those times. A lot of folks were not fortunate enough to do that.
But thats the ebbs and flows of our business.
I can remember in 2008 where we, the warehouse lines were shutting down lines of credit and we sat in our conference room and at a whiteboard and we were identifying loan by loan through all of our divisions and sales branches throughout the country of like, whats priority.
And that was over Thanksgiving, and that was a very, very difficult time. But all three of us have been in the industry a long time.
You know, we see the good, the bad, the ugly, and it's, it's the core organizations and your core belief in the people that you're side by side and working with to make it to that other side. And you're going to do whatever it takes to take care of that customer, take care of your, you know, your fellow team, associate, your employees, your family.
And that really drove us to make those hard decisions and sacrifices to keep us in the state that we are today, which is we're in a far better organization. Our warehouse lines, gscs, we just recently had all of that and they tutored our horn.
We're in the top 20% of all clients doing very well. And that's a lot to be said for what this organization has done for both our customers and our employee base. So a lot of changes, but folks that get into this business, they don't understand the history of what everybody has gone through and sees all of that. And you just have to have the fortitude of patience and just steady leadership which we strive at. Leader one, obviously our name, leader one, financial.
It goes a long ways within our organization and our fellow employees.
[00:14:34] Speaker B: What are some of the attributes that leader one has experienced in its success recently that has caused you to be one of the, to get the accolades from Fannie and Freddie. And how much of it do you attribute to the mad hours of the support and operations staff versus just using technology and being efficient with it, with operations?
[00:15:00] Speaker C: Yeah, good question. Michael.
Staying true to your core, there's a lot of folks and a lot of organizations that will jump ship and change things all the way through us.
And staying core to your beliefs and your true foundation as an organization continues to push that boundary and make success.
Technology within our industry has always been dated because IMBs aren't spending hundreds of million dollars on proprietary information. We use a lot of vendors because we want to associate the larger scale of collaboration and that technology is delayed based upon the GSEs adopting our investors, adopting technology, changing, like you said earlier, changes in the credit, changes in appraisal management, changes in all of these core functions, within the workflow contribute to the ebbs and flows, the profitability, the losses all through that piece.
[00:16:10] Speaker B: I love it. The acronym for team is together, everybody achieves more.
And I love to see that you're implementing this. Would you say that the implementation of teamwork goes from not only the top but also to the originator? And then does the originator also, are they able to use their, not only the Ops team, but what type of allowances do you give them in using ancillary source? Whether it was the choice of the AMC they want to use or the whatever softwares they want to use, or have you already vetted them out to say, look, you don't need to reinvent the broken wheel because we've already seen that before. So what are some of the things that leader one has implemented so that the originator doesn't have to reinvent a broken wheel and stay true to its course?
[00:17:04] Speaker C: Well, kudos from our sales team or any originator. They're forward thinking, they're problem solvers. So they're always looking for the latest and greatest to, to not only do their business, but take care of their customer. So within our organization, we're pretty agnostic. You know, we have a core system that we support from an LoS POS appraisal management, all of that workflow. And then if we have autonomy within our divisions and branches and say, hey, Michael, we'd like for you to take a look at this piece of technology, whatever it is, Aihdenae, you know, API, SDK, whatever it looks like, we'll take a look at it. I'm always looking at what's the risk to the organization for customer data, employee data? How does this integrate? Is this a nice to have, or is it a must to have for their business needs? And can we adopt this globally within the organization, or do we need to silo this out within that workflow piece of it has become more and more collaborative with all of our employees, including sales, to bring new ideas, bring new things, because they are frontlines, theyre seeing things change faster because their competitors are doing something different. Their consumers are asking for changes, faster data, more interaction with their loan process, more communication, faster communication.
And so the collaboration of bringing this back into the corporate environment and say, hey, can you take a look at this? And so I think myself and my team and leaderone as itself does, does an excellent job in reviewing the information, the tech stack that they want to do, and say, hey, you may have forgotten, but we have this technology over here that does the same thing, but it's a little bit different. Have you taken a look at that education, showing them what the information is today that we have that we support? And how can we implement something that we don't have that can better their lives for both themselves and the customers? So I look at ourselves as very collaborative with all of our departments, but especially our sales team, because loans today are very difficult to get and do with all of the regulatory changes, all of the changes that they face.
And so providing them with the best that we can offer from an IMB is very important to the core of what we do.
[00:19:42] Speaker A: Can you explain for maybe some of our listeners and for where we're going to head on this show, just a little bit of the background of leader one, how it came to be? And this is great for people looking for a new home, you know, a chance to talk about leader one, but more for the listeners that aren't quite familiar. I think what leader one does is, represents something so great about this industry. But there's a third of that, like those great name brands that were there, you know, seven years ago, leader one being one of them. And I do find that the loyalty and sort of building a company, a culture, something where you can go and grow, not just on an island like a brokerage, is going to continue to have its purpose, but just, I guess, a background of what it means to be an yours that's a little bit larger.
[00:20:43] Speaker C: Good question, Mike.
So we've been around 33 years. We started in Kansas.
I just surpassed 18 years last week.
I'm a unicorn. I mean, there's, you know, our executive team. I was just, we just did the math is 55 years just within our executive team at leader one combined, we just pulled some data from LinkedIn, and the average IMB is ten years, 2.6 years or something like. And I think we were over six, you know, all combined.
And it really, it really drives home of who we are. You know, we're not out there promoting ourselves. We're not out there pumping our chest.
We are very selective of who we want to talk with and who we want to bring in because culture is at the top of our priority list of ensuring that we have the right fit. We're not just out there looking for volume, looking for loans, but because if you have a bad mix, that's going to bubble up and have a problem at ten times over time. So we want the right people, we want the right fix, the volume, and everything will come later. And that's how we operate.
When I started, we were the king of 203 ks, and that's how I learned FHA business. And so we started growing and growing. And about 15 years ago, we started becoming employee owned from our shareholders, and we grew. We grew from ten to 15 states, and now we're into 48 states.
And it's interesting to see the evolution of an organization from its infancy to what today and what tomorrow looks like for the future.
And we've placed ourselves both financially, culturally, in a prime opportunity to expand with the right folks and to serve our customers, our employees, far better than we've ever done in the past.
Because of our experience within our leadership team. We've seen it, we've made mistakes, we've learned from it, and we are adaptive with the changes, with our markets, with everything that we do. And I think, I believe that is one of our best attributes, is the adaptability that we, that we offer, because it's scary, you know, to leave an organization that you've been with and to have somebody say, hey, we can do this, this and this, and later find out that that is not the case. You know, we're, we're talking to a group right now, and we are very transparent. We are lifting the hood of what we have, and we're being very open and truthful and we're showing them, because if they make a change, we don't want them to come back to us and say, hey, you didn't tell us this, this or this, and we made a mistake because we don't want that. You know, we'd rather open, open the kimono and show everybody, you know, what, what it is to be at leader one. Um, you know, you're going to sacrifice, you're going to be rewarded, and you're going to have a great family for your next move. Uh, and we strive to perfect that every single day.
[00:24:19] Speaker B: You think that there is a better way for an originator or an originator's team? I should say, you know, if you're, if you're doing enough business, you're probably, you're, you're getting ready to have a small team. Uh, is there a better way for the originator or producing loan officer to open their komodo? I mean, they can say, oh, yeah. Cause you can check what their production has been and, but, you know, and maybe you can do some psych tests, you know, to figure out what their personality is like. But what is it that you think that an originator could do to open up their komodo? To say, you know what? This is what I would like. This is what we're like, and this is what you're like, but, you know, this is what we're going to open up our kimono to so that we can be the better version, the higher producer, and even a better producer and synergistically work together so that we can be elevated to be better.
[00:25:11] Speaker C: Yeah, good question. I think if both sides are willing to learn and from each other and not be, hey, this is how we do it.
We're not changing for you.
That's an immediate red flag if you are.
I think from our standpoint, Michael is we are. We start the transparency first and we unveil what we are, what we have, especially within our division presidents and senior leadership within that. They're very transparent with our sales team, and we expect that because we want them to.
Obviously, they're making a change. We may not be the fit for them, but we want them to be part of our family. And we want that, that honesty to be very open right out of the gate because it's difficult to change the narrative after they've come on board and you're affecting not only their live but maybe their team's lives of coming on. So we've learned from, you know, past mistakes with divisions that we've onboarded, and sometimes they're nothing. They're not a fit. And it's, it's so important to be honest.
We're going to tell you the good, bad and ugly about us, and we, we hope that you're going to tell us the good, bad and ugly about yourself so that, you know, as, as an organization, as leaders, as an IMB that has been around that long, you know, we're bringing in the right people and it's, and it's a good fit.
There's people out there that are afraid to be very transparent, especially coming in board, because all their numbers we can see on all the indexes and things like that, their pay stubs, all of that stuff.
And we want to know why they're leaving, because x, y, and z, and maybe we can improve that experience for them to say, yeah, this is how we do it, but we can look at changing, you know, based upon what your needs are.
[00:27:25] Speaker B: Is there a question that you would want them to ask you so that, uh, that you would be, that you'd be open on sharing? Is there a question that you wish that they would ask more often so that, that it would create more of a dialogue?
[00:27:40] Speaker C: So, so in our process, Michael, especially from a division or a larger branch, they get to meet with the executive team, you know, face to face or via Zoom call, and there's no questions off the, you know, off the cusp that they cannot answer. Um, you know, the group that we're talking today, uh, you know, they're asking about, uh, stability, financial, bottom line. Um, you know, what's our, you know, what the, the question that most people don't ask is? What's your vision for the next five years?
And thats a difficult one to discuss and talk about is because all the IMBs have been just narrowly focused on surviving and being profitable and getting to that next level.
And that was a great question brought up today with this particular group is, what do you guys plan on doing over the next five years? Well, were just looking at 18 to 24, because youve got an election coming up, you've got the fed with all of the changes that are there, the jobs report that got changed, 800,000 loans disappeared from whatever statistic from the Bureau of Labor. So there's all of this information and from an IMB and our leadership.
Where do you guys see yourselves in five years? Where do I, as a loan officer? Where do I see myself within your organization? What's the trajectory? What's the growth that I can do? Can I be a division president one day? Can I have a big team? Can I be a shareholder at some point? And we're introducing those types of questions for a lot of folks, because a lot of the organizations don't offer those types of questions to them. They want them to be a transaction based people, and they want to keep them over here. We want that generation, we want that next sales to be the future leaders of our organization. So I wish they would ask more of those questions. It takes a little while to pull that information out when you're talking to them face to face, but eventually you get there and we see the light bulb click in their eyes of, yeah, we have the same pricing, we have the same technology, but we offer the growth and the future of building your own business within a, within a corporate umbrella.
[00:30:05] Speaker A: I like that. That might drop on all six, Mike.
All right, so here's where I now we can segue into where I do like to challenge the mind a little bit here.
[00:30:18] Speaker C: Uh oh, here we go. Here we go.
[00:30:21] Speaker A: So I think now is the time where Imbs do need to completely reset their how they think about things. And I think the unprofitable quarters should be the obvious elephant in the room. Like, why not rethink it? And I say this because two ways I can go. One is brokers have now gone from 7% of the market. Theyre back up to 26% of the market. I believe where imbs win is anything around scale.
I spoke to somebody that's a really big wholesale rep and so has all these brokers and acknowledge when the refi boom comes, that's when you'll see brokers go back to IMBs because they have the infrastructure of when to call the databases.
But until this happens, you're still looking at the IMBs, searching, you know, how can they benefit through scale? And I think the second part of it, you just technology.
[00:31:22] Speaker C: Technology.
[00:31:23] Speaker A: Right. But it has to be technology in, you have to know as an IMB that you need technology that works well with scale, meaning you have maybe have more money to spend or more infrastructure to beat the quick moving brokers that are not spending money in the wrong places and are actually just spending money in sales. And that sometimes drives our industry. Except I was going to say you also gave a great point for imbs that maybe is not articulated well. And leader one sounds like theyre doing it really well, which is make working in mortgages more than just a sales job for a loan officer show there is a career growth in it. If its a 600 person company, there should be a way to somehow escape sales but also create an environment where theyre making so much money in their database they dont want to get away from sales. But I think thats like if youre a broker of a five person shop, you cant go up, you can only sell more. So I think those are the two places.
I dont know what your thoughts are on either of them, but I think you nailed that 1 second.
[00:32:32] Speaker C: Yeah, because imbs are historically bad about ebbs and flows. We got to hire, we got to reduce. We got to hire, we got to reduce. And theres still a lot of people displaced in the market. So theyre sitting on the sidelines. I was reading an article the other day, people are hiring. People are seeking to hire people that are actually still employed because they think that's a better fit versus people that are still sitting on the sidelines because they're still active in the market. But that made zero sense to me of, you still got all of these qualified individuals out there for that piece from a sales originator. Do they want to originate all the time for the rest of their life? Yes and some no. So you've got to give them a vehicle to expand their business and retract their business without adding all this significant headcount because it takes time to ramp up the training aspect of it, getting people acclimated back into each IMB, because each IMB's workflows is a little bit different. So my philosophy, and I believe, to really push the technology advancements that are here today and try to put them in our operational workflow, because that's the biggest lift an IMB can really, truly make, is within our operation workflow, because that's where the processors, the underwriters, the closers, the funders, the post closing shipping, all of that is such a manual process that if we can enhance so that they're looking at the systems and not having to do all the day to day stuff, what happens? Well, your production, you're more scalable quicker, and you can actually turn up and turn down the workflow based upon what you've got.
But you've got to be very cognizant because your warehouse lines could get Max very quickly with this refi boom. And then, and then, you know, your, your account or your CFO is like requesting, you know, more capacity, or your secondary guy has maxed everything out on the hedge, uh, as, because of the volume. So you've got to be, you got to be scalable, but you also have to think through what that looks like from a scalability of adjusting that volume within your stack. Um, Michael, you brought up AI. Everybody talks about AI, AI, AI. And I was just at a housing wire event in Texas the last few weeks. Everybody talks about AI, but the speakers and panelists didn't give any examples. They said, oh, you've got to do this.
What? Tell us how you're doing. It was unusual. You got to do this, but we're not going to really tell you what we're doing. To get to the AIH, the aspect of AI, I'm more focused on next gen AI, the real autonomy. You give it data and you set in parameters and it's more predictive, especially what's our pipeline going to do on our hedge in the secondary market?
What's our EPO or EPD, what's our scratch and debt history look like within this environment? Having that type of technology is so much better versus just having a chatbot talk to a customer and say, this is where you're at on your milestones within the environment.
But there's a lot of vendors that are coming into the market that wrap everything up and say, oh, this is the next gen of AI, but it's still manual behind the scenes and they're either upcharging or trying to disillusion you of what that looks like. And for us, as IMBs and other IMBs, we have x amount of dollars based upon the pie that we have from a loan to spend. And so were very cognizant of what were looking at how to implement that. Is it the right choice to implement and is it going to change in 90 to 120 days, six months? And do we have to start that all over again?
Theres a lot of pressure within the IMBs now to make the right decisions because for those that are on that cusp of not being here in 2025, its real dollars that they have to spend to invest. And if they can weather the storm a little bit longer, theyre going to be successful with that environment. But like I said earlier, were so dependent on vendors. You know, a lot of us have downsized our development teams, and so we rely on, you know, the, the optimal blues of the world. We, the, the ices of the world to bring all of this stuff, because standing up third gen integrations with vendors is very difficult, uh, in today's world, um, because you don't have the resources that you did prior to that. So you need things that can really plug and play and talk with the data sets. A lot of IMBs, including ourselves, we siloed all of our tech technology from operations to accounting to CRM, and none of that talked to each other. And so now leader one has made a very conscious effort to get rid of those silos and have everything talking to each other within a bi tool within our financial system, within all of that infrastructure, so that youve got real time communication, real time updates, both with all of our parties involved with the loan process, all of our teams within the environment know exactly whats going on and I think thats going to set ourselves great for the next phase of the mortgage revolution thats coming.
[00:38:31] Speaker A: Trey, its important to point out technology only makes up 4%. I believe it is, of the total cost, maybe 11% on a company that actually has its own.
[00:38:45] Speaker C: Yeah, most everything makes up on the cost is GA yeah.
[00:38:48] Speaker A: And so one client of adopt the brand, Silverworks Solutions, which I believe is the number one north star of all the vendors I've seen so far right now in this year, and in fact, the most contracts I've sold have been silver work, where we'll give you an example. One company went from 38 people on the disclosure desk down to three. Now, the ability to move people, to me, makes it easier to make decisions. And I think that where the IMB mindset needs to go is one. I say everybody was spoiled back when all that money was there and all the new tech was coming out of, uh, to a good, in a good way. And people were buying tech and obviously getting it adopted was, was very difficult out there in the sales force. That's all. I don't have a solution for that. When we do, you know, we'll, we'll be.
But I've been advising lenders that, listen, I think your entire executive team should be involved in any vendor purchase because I haven't seen, unless they're all happening secretly, there have not been enough this year of new vendors where, why would you, why when it was busy? I get empower your people and let them make a decision. But I think it's, I have not seen enough vendor purchases where a CEO can at least get involved and call somebody, like adopt the brand and actually take the time to find out how other lenders are actually using it, versus just trusting a great sales demo pitch and say, oh, yeah, we need it. Because I think you do need to take the money out of operation like those 35 people and say, okay, that's, I know that number a year. I need to get that into sales like tech.
That's where I need to find a way whether that's better marketing, better new. I mean, everything's changing in the Internet world. And top of funnel doesn't have to be lead by, but that's where you need to move the money. The difference between a 21 day close and an 18 day close from a customer's perspective is not going to equate as much as how you could spend that money on acquiring customers and keeping your realtors happy. Mike Zhao might have better questions, and I would love to hear you guys talk about the warehouse lines. And maybe I'm missing something there, but I think, I guess to my final point is you can go to the loan officers with your tech stack. But I went to that AI summit, too, and all I heard was people are making chat GPTs of guidelines. And then I said to myself, they're only doing that because that's something they can do in house. Like I can. If you create a chat GPT ability to get all your PDF's uploaded.
[00:41:30] Speaker C: Yeah, you can. You can tell your AI bot to create that for you. Yes.
[00:41:33] Speaker A: Yeah, yeah.
[00:41:33] Speaker B: So hold on. So that leads actually to a question that we had out of the audience, and the question to ask to you might is, how does your leadership recruiting team go about weaving in your technology stack into your pitch to a prospective loan originator?
[00:41:50] Speaker C: Wow, great question, Grant Morback. Grant, great question.
I don't consider it a pitch is I'm not selling you anything. This is what we have today. This is where we came from yesterday. We're constantly evolving technology, because I use that very generalized, since we have a core system, we support multiple CRMs, we support an Los Pos, all of that stuff. I want to hear from the prospective loan officer sales team of what they need, what do they need to be successful?
And give me ideas and give the rest of our executive leadership ideas of, hey, this is how we do it today. But we are constantly evolving and learning from you, the future loan officers that may join our organization.
We want to learn what you're using.
And I think that's one of the, the best things that I can communicate is we're not stubborn.
In a sense, we, you know, you're coming to us, this is how we do it. And we're completely opposite of that. You know, we think we have a very good tech stack with the vendors, and we built those relationships over years and years of being with these types of vendors. But we're also looking at a, how can we better serve existing and future growth with our sales and consumer team?
Like I said, it's not a pitch.
Like I said earlier, it's very collaborative. We have a tech council that's about 25 or 30 different salespeople, different departments, and they bring in ideas. They're looking at things.
Do we adopt everything? No, but one of the things that we do is we embrace the possibilities of new ideas, new ways of looking at things. And I think that's, well, I don't think. I know. That's why we've been very successful in being where we're at, growing the way that we have, and providing the service that we do both internally and external, is the adaptability that we offer.
[00:44:21] Speaker B: Is there a, is there ever a time where you talk to either current originators or prospective originators and say, you know, what, what you think you know to be true seems to be working?
These are, we have some ideas, and we want to be collaborative with you. Are you open? Do you ever, do you have conversations with originators and how many actually, in general, in your experience, how many are actually open to change? Thinking that, yeah, you know what? This is something we can actually implement, but I like the idea, but I just like what I'm doing.
[00:44:55] Speaker C: So we are starting a, and a lot of different organizations have different terminology, but we're starting a production council so we can get the brand new loan officers, the seasoned loan officers, the veteran loan officers, the branch managers, and bringing, molding, and bringing all of that information into a collective body to have those discussions? And so they have a voice say, you know, being, you know, a former sales guy many, many years ago, changes not in the DNA. You know, we have, we have a rhythm of how we, how we do alone, how we talk to a customer, all of that. I think the change is being forced on everybody much faster because how technology is evolving, um, daily and successful salespeople are, should be always thinking that mindset of change is good versus, oh, my God, change is, you know, the worst thing that can happen. And one of the things that we really strive to do within leader one is embrace that possibility of change. Bring your ideas. Bring it what you think will work. Because we have beta testers, we have test environments that we can look at their ideas and work through the process and see if it actually works or if it's better than what we're doing today, we have an alpha team and a beta team of all these different testers and users, especially if we get a tech stack that we want to bring in, we'll work with the vendor and say, hey, we're not going to sign a contract. We're not going to commit to anything, but we'd like to have an NDA. We want to open up the back door. We want to see how this works before we commit. And this group of Alpha and Beta, they will actually go in and use the system, because from a sales team, they're the best testers, they're the best people to find out what's wrong with the wrong with it. Was it a oversell, under delivered type of technology? Before we commit as an organization to a contract or to x amount of dollars per month. And it gives them the ability to have a say in kind of the direction that we want to go as an organization.
And if it's a great idea, then we'll bring it up to the executive team, see how that impacts each department and organization. And then we'll take it to our board of directors to look at changing how we do things within the organization.
It's a very quick process in my eyes. Typically you've got all these different layers within an organization. It could take weeks and months. If we get something focused in our heads and we want to make a change, that's another great thing within our organization. We can make things happen pretty quickly because we're so flexible with decisions and we dont have all of these multi layers of management within our organization.
[00:48:09] Speaker A: Theres some golden Nuggets there for any executive in the mortgage industry to understand other business models and also loan officers listening.
It could take you years to understand how decisions are made in an IMB. If you went out and did my pathway and try and attend conferences or you can hear right here, I think is very insightful even for vendors to understand and slowly. And this is the ecosystem of which we live now.
[00:48:38] Speaker C: Preston I think too, Michael and Mike, the knowledge that everyone is sharing since COVID has opened up the door to explore. Nobody's hiding information anymore because we're all in the same boat together trying to survive and trying to do the very best for our consumers. And everybody's sharing information doesn't department, no matter which department, each executive within our organization has a private meeting with fellow CIO's, fellow CFO's, fellow coos. So we do roundtables within different organizations and we share a lot of information within these groups. And then I'll give a plug to lenders one. And the mortgage collaborative, they do a phenomenal job of bringing everybody together with their weekly seminars, weekly trainings, all of that stuff, and sharing knowledge. And because it's difficult to sitting in my seat to know everything and having these resources, having these people to their competitors like hey Keller, what are you doing with this particular stack and this particular problem? Have you seen this yet? Michael we haven't seen this yet. Well, we're dealing with it right now. You're probably going to see that here shortly. This is what we're doing.
It's such a collaborative IMB environment right now. It's very unique that we haven't seen in many, many years because everybody has been so siloed, because we're competing with for the loans, and they don't want to share information. But that's significantly changed in the last.
[00:50:12] Speaker A: Two to three years in competing for the loans. And now it just seems many lenders are competing for the loan officers. But I think one, with data being part of every piece going forward, I assume most companies are starting to embrace we have to integrate data in everything.
If you could go to a loan officer that's suggesting a technology. This is, again, back to my frustration with what I've seen in the industry.
Ask them to go print out their usage with their vendor. Let's say it's XYZ, let's say it's refinance Zappa matic, and you say, okay, why don't you run your report where you are? You want to come here and you want us to get refinance Zap o matic. Just run a report on the usage. Most of the time, if you see it, you'll say, oh, it looks like only one out of eleven of you have logged in in the last 90 days. Right? Like, if you could get ahead of that before you sign up for Zapp o Matic, and then you're taking it out on Zapp o matic four months later because no one's using it to renegotiate.
I think there's so much of that in our industry, and it's no one's fault because I think I always say 30% is the loan officer adoption level is some inside info that I find about 60% to 70% is a really good consumer adoption per loan of a tech, and maybe somewhere around 5% on a realtor. That 30%, I've seen very little get above water. And many lenders judge the lo login percentage versus, like, if a consumer is using it even under a lo seat, under that 60%.
Very few lenders count that as adoption. They need to see that loan officer logging in or pressing a button through some integration to count it. And everybody gets frustrated. You sign up because they came over and 20% are using it, which, well.
[00:52:09] Speaker C: You got to point your finger back at yourself and take ownership of that lack of adoption. What was the training like? What was the, you know, did you commit to this technology, whatever it is, to our sales team? Are you holding them accountable to use this technology? Are you reminding them, you know, what salespeople today are being inundated with guidelines with, you know, their. Their third party partners, their consumer, you know, trying to get these loans, and then they fall out because of guidelines or whatever it is. So you've got to always have that proactive approach of reminding them there's these tools to help show them how to use these tools and kind of reinforce their interaction with these tools. And you'll see a, you know, there's multiple levels of sales folks. They just, they just want a basic system and they don't want to mess with it. Or you've got those ones that are a type and they're working that data, working that technology all of the time. And what we do as an organization is I'm sure everybody, as well as we have our top ten, top 20 loan officers, and those folks are actually coaches and mentors to that next level of sales. Folks like, what are you doing to get to this level? What are your day to day regimen? What does your team do? What are you focused on from a technology standpoint? So our top echelon of sales is sharing knowledge down and giving more of themselves to help that next group of sales to become part of the leaders club trip or being recognized within the organization.
And they give so much of themselves to help others, it's crazy. And you typically don't see that where everybody's out for themselves. It's opposite in here. They're constantly sharing and giving advice, whether it's a mastermind and they're bringing all the collective ideas together or just having a regional operations call, and they're just sharing all of this information with them as well, too.
But I look at myself, if an adoption is poor or that technology didn't work, is did I not do a good enough job listening to the folks that wanted the technology? And did I do a poor job trying to get that adopted, or did we do a half assed job of just rolling something out and something better is on the horizon. I mean, if you're going to commit whatever you're going to do, commit and have the fortitude to see it through regardless of what it is, and it pays huge dividends in the future when you commit to like that.
[00:54:55] Speaker B: I had a general question about AI, because I think, you know, outside of using chat GBT, which is like, okay, anyway, but the question I have is, do you think AI can create a more internal collaboration with originators? And what I mean by using AI for that purpose is that someone says, oh, I'm not producing enough, get back on the phones and get more appointments. But the reality is that you can use AI, say, well, this is, let's say you average four to six units, and let's say it was like you average 4.5 units, and then interest rates are going to come down. And you saw one of your top teams, which is licensed in whatever, let's say it's in Missouri, and you see this other team, that's another midwestern licensed team, but AI will tell you on a pro forma, you're going to have some kind of number. But then AI will tell you, you know what? Their efficiency can only cause them to be efficient at x amounts of units. And this team will cause the team, and this other team actually is more efficient. So once they reach a certain amount of units in the pipeline, let's create a collaborative use. Because what I often say is that if you're producing, the more loans that you produce, you might be thinking, oh, yeah, I can make 100 basis points as an originator. But then the more loans you produce, you find out that you spend more on marketing, you spend more on support staff, you spend more on this and the other, and all of a sudden you're doing more units at 65 basis points. So do you think that AI can create more collaboration with other teams and other originators to say, you know what, I don't need to hire an assistant. I can collaborate more because it's still going to cost me more to hire another assistant anyway, and I can collaborate. Can AI solve that?
[00:56:37] Speaker C: It can help. I think where we fail as a human is we think AI is going to fix everything and we still have to be accountable and we still have to put in the work. So whether, you know, and you've got to back into the math of, okay, I want to close ten loans a month. Well, I've got to do x amount of calls. I've got x amount of credit pools. I've got to do all of this AI whatever AI is it, next gen, current chatbot, large language model, whatever that looks like, can help you with the data sets and give you the information, but you have to act upon that information.
And I think what we're seeing, not necessarily in the IMB or the financial, the mortgage world, all AI is like, this is going to be the savior for everything. I'm not going to have to do anything. The AI is going to take care of my customer, all of that. Some aspects, yes, they can help communicate, they can help all of that stuff. But we as an organization, we as a sales, you still have to act upon the data or the information I've got. You know, I use read AI, and it's a system where it plugs into Zoom and teams, and it takes all of these notes, and it's really helped me, because as a leader within the organization, we're in so many meetings, we're scheduling a meeting to have a meeting for a future meeting, that kind of dialogue. Yeah. And some of these tools really help organize and give you highlights of everything so that you can focus on it. But again, it's not the savior that everybody thinks it's going to be. You still have to have intelligence, you still have to have exceptional people looking at those systems and maintaining them and making the decisions.
There's a lot of folks out there that they're going to turn their AI into a CRM system or vice versa, and magically loans are going to appear.
No, they've still got to be that customer and customers want.
You've got from a sales standpoint, I'll just say this, you've got to be a chameleon with your customer. However they need the information, you've got to be able to provide that and you've got to be able to answer their questions quickly and be that subject matter expert for that. AI can help that with a chatbot of guidelines and all of this stuff on there. But loan officers are professionals. You didn't get into this business not to be a professional because this is your livelihood, this is your reputation. This is, you're telling somebody else that you're going to take care of this loan, you're going to put them in the home or you're going to, whatever you're going to do with a refinance, you're a professional and having tools of AI just enhances that professionalism. But at the end of the day, it's still you, your word and how you're going to take care of that customer.
[00:59:38] Speaker A: Yeah. I think one of the takeaways I joke about the housing wire is I think it's going to ill phone calls. So loan officers are going to have to get good at texting because.
[00:59:51] Speaker C: Or voice AI. Yeah, you'll just, you'll just put in a script and it just shoots it out to the consumer calls who's never.
[00:59:59] Speaker A: Going to answer their phone because all of these top services are working on ways to auto call.
[01:00:04] Speaker C: Yeah.
[01:00:05] Speaker A: And so all day long you're just going to get AI fake people from, you're just going to stop answering, period.
[01:00:13] Speaker C: I use an AI bot right now to block all these spam calls and so, and it's tough. And because sometimes they're legitimate calls that you've got to kind of go through and look at. But you're absolutely right, Michael.
It can be very detrimental, for sure.
[01:00:30] Speaker A: Yeah. Cause I don't even think we've started yet. We got, we got the, uh, oversea, um, spam bots, right? That hit us all day long. Wait till we actually have the friendlies using AI. And that was my takeaway. So your servicer's calling you, your car insurance person's calling you, and it's a, that was, that was what the play is. They're going to call and give you options as an AI voice. So you actually think you're talking to a real person. And then it would say, oh, let me go get Mike Zhao. Do you want to wait for 30 seconds? You're going to have a million of those calling. And after you get tricked a couple of times, you're like, oh, I thought this was Mike.
I think you're just going to say, text me first. That'll be some new piece for the Gen Z. Like me first, that answer. And so, loan office, you're going to.
[01:01:16] Speaker C: Have to figure out once you engage with a customer and vice versa, and you have a dialogue, then you can use those AI applications to enhance that experience for the consumer. Plug into the big data, give them all that stuff. But that initial contact, especially with all the state and federal guidelines from a texting standpoint, robocalls all of that.
I get spam calls all the time and luckily my system just blocks everything out because what people are starting to see and what we've seen is you answer a certain call in a certain way, they're recording your voice to take over future bank accounts because a lot of voice recognition is going in or you respond to text messages with things in there, um, that you accidentally select a hyperlink. Now they have access to your phone. And so the bad guys are, are always trying to be bad guys. And it's us on this call and our listeners trying to protect our customer data. And it's, it's uh, it's a never ending job. Um, it's difficult.
[01:02:20] Speaker B: I think that the important part is, is understanding how important servicing is going to be. When you have companies like Mister Chuper or smells Fargo trying to back, solicit your customer. If you're not into, if you're not going to be self servicing, that's going to be, that. You know, that's going to be to the detriment of the retailer Jenner.
[01:02:37] Speaker C: That's why you have Fannie, Freddie and Jenny. So you can control that, or you put in your agreements that you can't solicit for x amount of months. But yeah, and Mister Cooper seems like it's buying up everything about Flagstar and their acquisition. So I look at them buying all the service, retained, all of those investors, and bringing their portfolio.
Mister Cooper could take all these NAR environments and wreak havoc on all their databases and severely impact our imbs with some of this technology that can come out and do that.
Listeners, make sure you're reading your agreements before you execute anything. Make sure you've got good relationships with your vendors, because they're not necessarily vendors. They should be partners in your business.
And it's, you just gotta be very proactive and, and have those conversations upfront to understand.
[01:03:37] Speaker B: Absolutely.
[01:03:39] Speaker A: We appreciate you taking the time here, Mike.
[01:03:42] Speaker C: Oh, thank you. Thank you. This has been fun.
I love the back and forth interaction. It's, none of this was scripted. I was kind of worried. I'm like, oh my gosh, what questions are the three mics going to answer and throw at me? And I'm like, oh gosh, do I need to seek legal counsel? What do I need to do? So, uh, but no, I appreciate you guys. Um, and I'm sorry to hear about the, the recent passing. Um, I didn't get a chance to meet with her, but I know of her and, uh, feel heartfelt, warm, goes out to her family and her fellow colleagues. Uh, she'll be truly missed within our industry.
[01:04:16] Speaker A: Yeah, she was forging a new direction for, for credit scores and, and with the timing of trigger leads, the recent raising of credit reports being pulled being four times as much as it used to be. Plus them now making soft polls more expensive than hard polls.
It's going to be, and that's before the refinance boom has even happened yet. Right. And so that is a very relevant topic in our industry. And she was breaking it down in a way that was not salesy, which is like, she had no, she wasn't even on ramping it for her own services. So like an even more authentic.
[01:05:01] Speaker C: She was a servant of the industry and that's, we need more of that versus a consumption of what, what is it going to do for me? You know, serve one another and good things happen.
[01:05:14] Speaker B: 100%.
[01:05:15] Speaker A: Absolutely. And tune in next Thursday at 02:00.
[01:05:18] Speaker B: P.M. eastern and of course 11:00 a.m. pacific in sunny San Diego to hear.
[01:05:24] Speaker A: Mike and Mike and some more amazing guests trying to serve the industry. Thanks, everybody.
