Essential efficiency and optimization strategies to win in this market

Oh, look, we have people actually showing up. So I did something right. Welcome, everybody. You can see the topic for the day and why you're here up on your screen, and we'll get started in just a few minutes. I'm going to let some folks join. Let the attendees join. Right now. People are coming into the lobby, pouring in by the hundreds.

Like it.

So while people are joining, why, why doesn't everybody put into the chat where you're joining from right now? And I'll start off. I AM in Washington, D.C. let's see what we've got. New Hampshire. Nice. I knew that, though. You guys gotta respond to everyone, not just the host and panelists.

Well, I just realized that. But I don't have an everyone option.

I don't see the everyone option on mine.

On the drop down. Oh, man. Looks like I'll be the only one talking to everybody. Sorry, guys. If you, if you just joined. We're going to get started in just a second. We're just giving it some time so people can join. Femi, we're going to warm up with a softball here. You ready?

Yeah, sure.

Is a hot dog a sandwich? Let's know. And what do people think? You guys throw it in the, in the chat?

Absolutely not. Absolutely not. Just because you contain bread doesn't mean you're a sandwich. All right, I'm on that. A hot dog is a sausage. If you're gonna have a sausage sandwich, you're gonna have a sausage sandwich. If you're gonna have a hot dog, you're gonna have a hot dog. You're going to have a Reuben. You're going to have an actual sandwich.

That's a good answer. He's got an opinion. I love it. I'm going to take the opposite on that one.

I'm £330. If it's about food, I have an opinion. Jason's making me color envy. He's making me collar conscious right now. I gotta, I gotta loosen this up and match.

We'll get started in just a minute. I, I see chat is disabled. Don't worry. We're going to take a look at that, see if I can't change that right now. All right. All right, everybody. Well, that looks like a setting that I did not check off when we set this up. So sorry, there will be no chat. But if you message me or if you ask a question or put your answers in there, I will definitely make sure it gets answered. So let's see what we've got right now with the, the questions we've got Chicago. In Chicago, a hot dog is a sandwich. Oh, Femi, you've been rebuttal right there.

Ooh. It's okay. It's Chicago. I love me Chicago dogs, but they put like awkward peppers and like just a ton of other stuff that's going on in a hot dog. And I do crazy things on hot dogs myself. But Chicago is its own world with hot dog on hot dogs and pizza.

Wow. There we go. I think I just fixed chat. So without further ado, if anybody wants to just test it out really quick and then just see if that works. There we go. Hey, look at that. On the fly, solving things. Let's get this started, everybody. You've come today. We're here to dive into the efficiency strategies that you can put into practice today. Let's get started. I'm going to start off by introducing our esteemed panelists here. First of all, I'm going to introduce. I'm going to introduce our guest speaker last, actually, because I have a little bit to say about him. But I'm going to start with Kirill Klokov. He's a CEO at Truv. You know, I would say the operation operations teams love True and love Kirill for what he's built with True with the income, employment, asset and insurance verifications. Kirill's got an amazing background. He was head of product at Carta. If you ever work with any startup pretty much in existence, their cap table and their and who has equity is con is usually managed by Carta. He's a really, really smart guy, a serial entrepreneur and, you know, just loves his customers. Say hi, Kirill.

I got red like from all the compliments. Hi, everybody. Really good to have you on this webinar and thanks for the introduction, Richard.

Awesome. And then next up, we've got Jason Perkins, co founder and president of Bonzo CRM, which was just recently acquired by mmi. Jason. And if you, if you don't know that Jason went from media and TV in his background to working with Realtors and then from Realtors for several, working with several mortgage lenders and finally starting Bonzo. Jason knows a lot about automation and is working with revolution, which is why he's here today. Say hi, Jason.

Hey, how's it going? Super excited to be here. I did see somebody put up the oh in the chat. So I'll respond to that by saying IO. I'm in Columbus, Ohio. Go Bucks. And super excited about this discussion today. You know, you know, Femi, you're, you're a genius when it Comes down to everything. Mortgage and mortgage apps. And I think that everybody here is in for a really good treat. So excited to be listening and being part of this conversation.

Awesome.

Love it. It's fun.

Last but not least, Femi, ie former processor to Ops Manager to evp, you group came up from the ranks in operations. Femi has a ton of operational experience. He's EVP of operations at Revolution Mortgage. He's our guest of honor and we're so excited to have him here with us because he's going to drop a ton of knowledge for all of our operations folks, even the folks who are running, you know, operations at branches. This is going to be a wealth of information from Femi in our practice runs. You know, he's just really blown me away. So Femi, please give us some background, if you will, about Revolution and your role there.

EVP of Ops trying to make the mousetrap work. That's, that's just what it is. I mean, we're all out here selling the same thing. We're selling money to people. So we've got to be able to find a niche that says that we can do it in a specific fashion. So we're trying to get it done a little faster, a little cheaper and just in a, in a high quality fashion. That's really what we're trying to do here at Revolution. I'm really excited about, about working with the team here. We've got some great executives, we've got some great ownership, we've got some great boots on the ground. Revolution is a little bit of a unicorn this year. We're only down about 13 on the total year where I've seen some bloodbaths on some other people's, on some other people's numbers. So we are ticking, scratching, clawing, doing whatever we need to do to, to maintain our market share for what's going on. So relatively young company, but we are up and comers in the IMB market space. Going to be hovering right around that $2 billion mark again this year. And for, for the fact that we're in the winter of discontent before. It's not going to be the greatest thing in the world. I'll take those numbers all day long.

Well, what was the percentage up from last year or down from last year? That's better than the market that you 13, right? Why does this, why don't people throw in the chat real quick? Up, down, same from that 13%. It'd be interesting to just see how other people are doing right now based on that down that's got all the Oscar. Thank you for your honesty. Down, down. Better. Up, down. All right, we're getting some, some feedback up. So it's a mixed. It's not just. It sounds like some people are actually doing better than the market. So that's good.

I mean, only about 22% profitable right now for the I space. So everybody, that's up. High fives to all of you guys for killing.

Wow. All right, let's jump into it. We're going to start by setting the table here. For this presentation. We're going to run through a couple slides that just kind of set the industry stats. All of us are aware of this, but if you haven't seen this slide before, this is the NBA forecast that was just released in Philadelphia. I was there, Kirill was there, Jason was there. I'm not sure if Femi was there, but, you know, NBA puts its forecasts out. You know, you can take them with a grain of salt. You can bet your whole business on it. I, I'm gonna ask Femi in just, in just a second what he thinks. Please share in the chat. If it's your first time seeing this, I'd be really interested to know if this is the first time for some folks. Here's, here's the takeaway. Forecasted rates to end 2024 at 6.1 and in 5.5, in 2025. And you know, when this was presented at MBA, there were lenders who were very upset after they saw this because they were, they're, they're making decisions on about their business. And those decisions can make or break your business. So they thought that they were a little aggressive, to put it lightly. And Femi, you know, when you see, when you see this, what goes through your mind?

It goes through my mind that I'm not an economist. And I'm sure they have really smart people working there at the MBA that are using tons and tons of data. And in my experience and what I consume in Fed minute meetings and the rest of the information I have, I don't see the same external pressures that are going to reduce rates at this, at this pace. I mean, I'm hearing Powell yesterday even say that, you know, inflation is stubborn, they're going to hit their 2% target. They're, they're balancing the risk between overshooting and undershooting right now. So I just don't see this aggressive change that is going to lead to the, that is going to lead to the drop that gets us, that gets us down to the rates that you were talking about earlier. Again, not an economist. I don't have the wealth of data that they have. I'm looking at just my experience in this business that usually when it gets. When it gets bad, it gets worse than people thought. And when it happens, it happens for longer than people were looking at.

Yeah, yeah. So I think it's safe to say that you're coming at this perspective, the perspective of this event right now with someone who is planning for the worst, basically a mortgage winner, maybe, that we might be going into. And really, you need to get as much operational efficiency as possible. I don't want to put words in your mouth, but is that the perspective that you think? You tell me.

We're really about it. I mean, we understand where we are right now, that we're. You have to be growing. If you're not growing, you're just dying. Like it's something that's important. Right. Nobody's going to shrink and say, let's just do this with less and be happy about it. Right. So you've got to be able to be at that setup. But we are really looking for trying to optimize our efficiency so that when the worm does turn, we're ready for that scale and we don't run into what everybody ran into in 2020, which was, you know, hiring any person off the street because they needed a body just to. To fill up and handle their volume. Right now we want to be a lot more intentional about what we doing. We're looking to get as much automation into place as we can so that we can really scale. And when the worm turns, we'll be prepared for it and our team will be stronger and faster because of it.

Cool. So I love that answer. Let's jump in. We have a lot to go through. I want to get through a couple of these slides with industry statistics here. We all know costs are rising and volume is low. You can see that on the right side, in the right graph in terms of profitability for IMBs over the years. Femi, can you break down the major cost buckets driving losses per loan that you see on the left? You know, in Q1, 2023, you've got an average loss of about $1,972 and then Q2 a little less. $534.

Well, I mean, a lot of this comes out when the NBA puts together their average losses per loan. They take into account what you're spending in your manufacturing on loans that aren't closing as well. So when you have that period and you're, you're struggling in Q1 of this year, as we all were. You're gonna have, you're gonna have more costs just because you have more fallout and you have less units closing in. In Q2, it was really about as bright as it was really about as bright as this year got for anybody. Like, it looked like the worm was going to turn in April and like volume was just going to be back, like all the way back. And not like we were going to be experiencing the situation that we are in right now. So the, the, the piece that really, that really stands out to me is how many loans that people are actually closing, what they're getting in their fallout. There's a lot of other things that get baked into what these operational losses are per loans that include like, oh, what you end up losing in buybacks and what you end up losing in, in areas where you have, where you have repurchases, indemnifications, or you have other items that can be quite expensive. And when those things hit, they hit not based on, oh, we originated this loan in third quarter, they're going to catch it and, and hit you back in, in a week. You know, you're getting hit from things from 18 months ago where you try and come back and take a look and say, oh my gosh, this is my exposure was what? All right, how many times did we make this mistake before it got caught? Like, that's a, that's a scary piece that's out there. So understanding the other piece that really gets into the average losses per loan is the loan manufacturing cost going up. I mean, everybody here, everybody here noticed last year when credit costs just, you know, tripled or quadrupled or depending on which area you were, how you dealt with that. The cost to manufacture our widgets right now is just at an all time high. We need additional technologies for people. We need a lot of things that are nice to have just so that you can main, so that you can maintain parity with your peers in the market. And those things are no longer becoming nice to haves. They're becoming like just absolute necessities. Like it's just out there. You have to be able to do a hybrid close, you have to be able to do a Ron close. You have to have an online app, you have to have your CRM built into this. You have to have, you have to have, you have to have, you have to have a whole lot of things.

Yeah, I appreciate that.

The piece of this that I really love that I didn't mention for one second is that percentage of profitable indsignment. We all had that boom time in 2020 and you can see how quick that cooled off in 2021 as people scaled their operations and maybe didn't quite do so as intentionally as they should have. They were just kind of holding on and you can see that drop really happen before the market falls out and you're losing awful, awful amounts of money. Profitability did come down a significant amount in 21.

Yeah, yeah, yep. Very clear. Thank you, thank you, thank you. Fem. One more industry slide that's going to kind of really set the table, I think, for what's coming now, really. Technology will continue to be one of the biggest costs in originating alone greater than 2% increase over the next five years. That's what you should take away from this slide. And so, you know, that's going to be a lot for some companies and maybe less for other companies. Could have a lot of implications. Femi, would you say your tech costs are increasing similar to what you're seeing here? Yeah, I would. Just give me your feedback on that.

Unless you're a massively mature company that has been in business 25 plus years and is just at equilibrium with what's going on, I think 2% on the increase is on the real low side for technology. People are going to have to leverage automation. I saw somebody in the, in the chat asking how many loan officers there were going to be left. You're going to be a lot less in loan officers, you're going to be a lot less in appraisers. We've gone through these things where the average age of professionals in the mortgage industry is. It's significantly higher than other areas. We're going to be losing a lot of wealth of knowledge in the next couple of years and we've got to replace that with automation and the efficiency setup. The automation isn't necessarily there to say, hey, let me institute this piece of automation and alleviate this number of FTEs. It's the setup that says that this number of employees can handle so much more business so that you can scale. I really think that people need to be aggressively looking at their tech stack and saying, why are we still doing it this way? Why are we still trying to optimize what has been a replacement for the paper files moving around the office? It's been going around since the 80s. So I, I'd like to see a company that's, that's leading, that's not mature, that does less than 2 to 6% on the increase in what they're spending in technology. And I'd like to compare where they are with us in a couple of years because I think it's going to be scary. And I think people really, really, really have to push things in, in this world where everybody is just used to instant delivery and instant gratification. We've got to get faster in our business in a real and meaningful way. And I think investing in technology is the way to do it.

Hey, Femi, I've got a question for you on that. You kind of mentioned on it, right? As far as, as we adopt more technology, does that decrease FTEs? And in your opinion, you know, are you looking at technology replacing FTEs? Are you looking at technology running in parallel with, with running Slim on FTEs? How do you see the, the, the, the run. The, the parallel run with technology and employees?

Every mortgage company had to get slim in 2020. Every single one of them, every single one of us had to get slim. What people are looking right now is, what they're looking at is how they can hit the next cycle with what they have. The people that are on the team today are the people we want on the team. Right? We're not looking out here to say, hey, how are we going to shave, you know, so many dollars an hour in our total manufacturing cost by replacing the, by replacing the FTEs with the automation. The real look of it is how can we grow to scale with the team that we have? And I know a lot of other peoples that are COOs or that are in operations at other companies that are thinking about it the same. We all have less than we had to deal with than we had in 2020. We have less people at our disposal. We have less in the labor force. And it takes more to manufacture alone these days. So we have to do more with less, which is where the automation comes in. It's about scalability. Because no matter how great your item your idea is, no matter how great your model is, if you can't scale it, when times go up, you're going to fail pretty quickly.

Awesome. Okay, we are getting into the meat and potatoes of the discussion now. So I am about to launch a poll with the, with the audience. I'd appreciate if you answer. Here we go. This is a question here. Where do you think that you can improve the most? And what you're looking at on the right is kind of the standard loan origination process. So we're really looking for where you think you can improve the most at your, at your organization. So we've got customer acquisition coming in. This is exciting to watch. Femi, where do you think we're going to land? Let's see if you can. How accurate you are. Maybe you can influence people answering.

You want me to influence people on where I'm going to do? All right. I'm. Oh, it says hosts and panelists cannot vote. That's why I. That's why I can't. I've been clicking this thing like a crazy man.

Yeah, I love that, actually. It's a great feature.

For everybody and just verbalize what I would have done.

Well, I think. Let's see here. We got 51 out of hundreds that have responded. Let's give it a little bit while, a little bit longer. If you guys please can put in your poll answer. I think it would. I'd really like to at least get a majority quorum. We're almost there. All right. We're getting a lot. We're at 5060 right now. People are really putting customer acquisition at the top. That's really interesting. I think that's where we're going to land. It's overwhelming the majority. What do you think about that? For me, I think that is a.

Good thing that I added that to the slide when we had our practice.

I know, I know. We didn't even have that on the slide, but the operations leader said we made a mistake and I put it on there.

I think that's a great piece. Knowing where customer acquisition is coming is going to be really important. Wow. I'm seeing the results of the poll, and it was overwhelming in that area. So, I mean, that's Jason Space. That's the CRM. The CRM, that's the best thing out there, is the one that you use to its fullest extent. How does it get. How do you engage with folks? There was somebody else that was mentioning earlier, less loan officers, less loan officers, older Realtor population. Are they still going to be around in 10 years? Are they still going to be doing the same thing and have the same influence? I mean, you see the court case going on in Missouri. That's a. That's a scary, scary, scary one. You're going to need to do things other than go golfing with realtors to. To bring in business. You're going to need to remain top of mind in front of your customers in all these spaces. There's plenty of the really big companies that are out there. They're just saying, I don't care that I'm selling loans right now. I want you Guys using my app. So we're top of mind. So if customer acquisition is the, is the, is the spot. Jason, why don't you tell us what we're doing, what we're doing wrong and what we need to focus on in order to get.

No, it's, that's a great. I'm really glad to see that, you know, customer acquisition came in at over 50% there and I think everyone has their eyes on that. And I think that traditionally in our space we've relied on some kind of clunky tools to have the perception that we're staying top of mind and engaged with our customers. And here's the reality, I'll break this down very easily, is that people do business with people, right? At the end of the day, your relationship with the consumer, with the customer matters the most. The, the whole idea that we drip them with pumpkin pie recipes and how to get leaves out of your gutter and how to decorate your house for the holidays is not moving. The personal relationship with the customer, the relationship happens when we are having one to one conversations. They want to do a do it, they want to get pre approved with you, they want to close with you, they want to refer you. But if we're not doing a good job of stating active conversations with our people, we're going to lose out on those opportunities. The best form of marketing to your people is caring. So if we can care at scale, we're going to win more of those relationships. When they're ready and they raise their hand and you're ready for them, we're going to win more of those relationships. Get rid of the jargon, get rid of the junk, get rid of the fluff. Have meaningful conversations with your people at scale through your voice.

Right?

Bring care to the forefront. They're going to come back to you, they're going to think about you. And if, and to your point, Femi, the best CRM is the one that you use. Absolutely. That is 100. Correct. You've got to be able to invest in the technology that you have that are going to drive relationships with your people. If you, if you're not able to drive relationships with your people through your technology, go get, go get something that's going to drive that for you. I know that. I've heard this a thousand times. Use a spreadsheet. Google spreadsheets are as good as a CRM. Well, those spreadsheets are not going to do automatic outreach. They're not going to sustain and create new conversations. They're not going to be Timely and reaching out to them and having and bringing relationship to the forefront to build these relationships. They will come back and right now everyone needs to be focused on filling up their funnel with meaningful conversations. That should be their goal. That is their number one. Going into finishing out Q4 going into Q1. We know it's going to be two tough quarters but if you can fill up those funnels with meaningful conversations, you're going to come out on the other side in a really good spot.

It's a great.

I think we need to put our hands in and go CRM on three right there. I like it.

That was good. That was really good. All right, I'm going to stop sharing this poll. Let's get on to the the next slide. We got a ton of content to get through here. Results out about the high costs and long cycle times. Look at some of these stats. 7, 4, 4 to 5 touches per underwrited underwriter. What's your reaction when you see this?

When I see this I, I like my skin starts to crawl and it starts to crawl because this is an amalgamated report from ICE and there is nobody on this call that is representative of an amalgamated report from ICE. They do 80% of the originations in the country and they giant companies and then they are with people that are doing $400 million a year. Right. And what you look at in your individual market is so different. There are, there are people that see 45 days on the time to attain initial or refinance mortgage just to just to get a purchase. If I had 45 days for cycle times in our company, I'd be out of a job in like a week. When we take out the new construction business like we got a hold of that 21, 23, 24 like you start, you started crossing on 30 and you got to figure out what's wrong with my mousetrap, why aren't we doing this. But there are other companies that are out there that are focused on builder business that just happens to take 300 days in order to do something. So you're going to see things that are really awkward in the mean you see that four to five touches per underwriting file. And then my question becomes is well how does that actually function in with people that are working on task based systems? How does that function in with people that are in tandem for items like we strive to keep all of our numbers significantly less than what this, than what this local average is. And the piece that's going to bother me always, always is there's no Average company, right? You know what your market is, you know what your niche is, you know what you guys need to market to. And if you're taking a look at your benchmark and you're saying, I'm comparing these massive giant companies that are advertising on the super bowl with a place that's got six people down the road that happens to have this really great niche in the VA manual space. You're, I mean, you're comparing apples and marshmallows like they have nothing to do with each other.

Yeah, totally. Okay, so I love that. Let's get into the next question. I love this next question. And I'm moving quickly because we really put a lot of great content together here and I want to make sure we get through it. Cost is on everybody's mind, Femi, Everybody in the audience. Cost is on. You're not in this industry and cost isn't on your mind. What have been some quick wins for you to reduce the cost of lending?

Quick wins, Quick wins. I'm on the phone with you guys right now. Right, right where this is, this is a true platform. Carol's been, he's been hanging out, just not talking about anything. Let's talk about our documentation costs. Let's talk about those giant monopolies that are out there that are laughing at customers, saying, we're going to keep increasing prices because we have a particular monopoly. You want to lower your manufacturing costs, speed up your process. If you're spending less time on it, you're spending less on your full time employees, on what you're doing. You're spending, you're spending less duplicating tasks, you're spending less on reductions on redundancies. Take a look at what you can do to, to speed up your process. And with that, I'm going to give, I'm going to give Kirill the floor for 10 seconds and tell me the great things that true does to speed up the process for us.

I'll teach you that. Tee this up to Kirill. We talked to Femi's team at Revolution and they estimate their savings potential to get $20,000 a month. That's more than two full time employees at a lot of organizations. So, Kirill, why don't you just frame this and tell people what is true and why are lenders able to save so much money with Truth? Sure.

And thanks, Femi, for being customer. Truth is an open finance platform. So if you're having challenges with the current vendors in employment verification, in asset verification and insurance verification, Truth can help. Truth takes A very different approach compared to the work number. The companies that have been around for 25 years and in the last five years they increased prices by 400% and I think the prices there's gonna come, there's coming up a new update in January that is the price is going to go up. And truth gives you a different alternative. So what do you see on the right this spinning screen. It walks you through a simple process. We're integrated with like most of the LOS POS systems today but essentially we use consumer permission data. So when borrower comes in they would enter their credentials, login and password for the system where they get paid. Whether it's adp, large employer, what have they. We would be able to log in as them into their payroll provider. Let's say ADP get the W2s and pay stubs and return W2s and pay stubs directly to you. And this is a new cohort of companies that are coming out like in the last five years which allow pretty much bypass the middleman. The company that goes buys data from PL providers and then sells it to you. What we do is we partner with your borrower so we have very little cost associated other than the technology team which is 60 people that we have to maintain to keep this technology going. We have very little cost. So as a result we can save you 60 to 80% compared to the work number we're integrated with most platforms. If you're on Encompass, if you're on Simple Nexus and Femi I think you're on Simple Nexus, right. So we just announced well it's now Encino. So we announced a partnership with Encino. We have a very good partnership with Encompass. If you're one of those platforms, same as Flowify, beatsmarty would love to talk to you. The conversion and most people say well I don't remember my ADP credentials. No problem, we'll help you figure those out. And the conversion for us is roughly similar to the work number. So you would see anywhere from 25 to 40% of borrowers verify instantly and that reduces your time to close by two days. Because of the huge savings we can give you pretty much $3,550 per loan, no cost per for reverification you can re verify five times a day, no problem with that. And the best in class user experience and high pull through rate. And we covered today about 90% of working Americans who have W2 or hourly jobs. And as a result we can cover most of folks that you would send our way and verify their Income and employment instantly. Richard, I'll give it back to you. Maybe. Folks, got some questions. I'm just going to look at the chat.

Yeah, well, look everybody, here's what I'll say. Savings is the name of the game right now. Outside of customer acquisition, which is Jason Space. If your company isn't using true or isn't talking, you know, just someone and exploring other options to save it, you're not, I, I personally think that the companies, whoever's running operations isn't doing the duty, their duty to make sure the company is efficient right now. So just talk to Truth, have a conversation. This is the only plug we're going to do in this webinar for Truth. But right now we have a lot of, a lot of interest right now because we are saving 60 to 80% against the work number and we're doing that for Revolution right now. That's why Femi's on here. That's why we put this slide in here because it, you know, to be, to be as efficient as possible, you've got to find ways to save in your operations. Femi, thanks so much for that plug. I appreciate it, man. Let's, let's, let's do another poll. What do you say? I think polls are fun. I think this poll. I'm gonna kick this next poll off here and I'd love it if you guys could participate. How would you rate your lending operations in terms of automation? The reason this is in here is because a lot of folks recognize that the automation of like manual redundant tasks can save a ton of money and costs in terms of like in time for your FTEs, for your team Affemmi, how would you rate Revolution on this one? Would you be, Are you guys Terminators, Flintstones? What do you think?

I think we're. Blow it up. It started all over again, set up again. I kind of mentioned that, you know, we're, we're kind of imitating the, the, the workflow for the 1980s when you had a, a paper file with a binder and then, you know, the junk was on the left side, the good stuff was on the right. You had your stacking orders and whatnot and your little HUD binders and everybody digitized that over the last 15 years and we've put the system into, into the monster los that we're all dealing with and it's still effectively the same thing. So what we're trying to do is, as we've mentioned a few times, we've got to stay top of mind with our customers. We've got to create a great user experience and we've got to shorten our life cycle. So we're, we're really taking a look at, you know, hey, we, we wanted to automate this one piece. If we could automate this one piece. We're in here. Then we see, oh, we're within this framework. We have this other limitation. Let's automate this next piece. We have this other limitation. We're in the space right now that says, what happens if we start over? What happens if we don't say, hey, I need to automate from A to B. And I just say, I need to get from A to Z. What's the fastest way there? Let's not look at what's in our current operation setup. Let's look at how we can really get there. So we've done a lot with, We've done a lot with RPAs. We are doing a lot with just where APIs are just seemingly, seemingly to be infinitely more efficient. We're doing a lot of automation within APIs. We're taking a lot of information that we're saying, how can we extract information directly from the, from the GSEs and turn those into tasks to our customers so that we can get going on. The people that are working with Revolution are going to be excited over the next couple of years as we, as we keep leveraging what we need to do. So I think Terminator is a little on the soft side for, for how aggressively we're going after it.

So what's really interesting was watching the results come in. I don't think anybody is putting them well. There are some. Right. But there's not a ton that are putting themselves in the Terminator, Terminator or Flintstone category. It's really in between. And it sounds, I'll bet that's probably with most lenders, right. They kind of fall somewhere in the spread.

It's scary.

Yeah, it is.

It's scary. You start talking automation, people start saying, are you replacing jobs? And you need those folks to get in there. And it's not about replacing jobs, it's about capturing bigger business. And that's the piece that every single one of us needs to know. When we're into the, when we're into the automation or we're in for an efficiency, it's got to do something. It's got to either improve your output of your loan quality, it's got to improve your user experience, or it's got to speed up your. Or it's got to speed up Your widget manufacturing. If you're not doing one of those three things, then what is your automation doing? What is your efficiency actually doing? Because you're not actually capturing what needs to be done correctly.

Well, that's a great. Let's just tee up the next question here. The next question is, is can you share some examples where you've automated manual processes and share the benefits? And we listed some of those benefits below. The typical benefits, cost, time, labor, increased customer expectations, or you know, a better customer journey. Femi, what do you think?

Oh, I can, I can do examples on all of these and I can do a great one. Cost savings we can talk about. True right here. It's, it's just a great piece. If we can get the consumer permission data directly from the, from the place, I can limit my interaction with those giant monopolies like the work number that just say we're increasing prices. Hahaha. Deal with it. Right? Your profitability is low, your margins are low, everything's compressed. We're going to charge you more and you don't have a choice. All right, so there's cost savings right there. Time savings we've been talking about. If you want to make actual manufacturing savings on shorten your life alone, shorten the amount of work that's doing on it. We're doing a lot of things that are in the RPA space so that we can, so that we can handle multiple time zones and we don't get, and we don't get bottlenecked around individual people doing it. So if you're trying to save time, take a look at areas where you have a, take a look at areas where you have bottlenecks, where it's slowed down to a few critical employees and try to open up your bandwidth so things can flow from origination through to closing a little faster or through to shipping a little faster. In the labor space, we are all in the, we are all in the hurt locker. In the labor space. There are less processors, less loas, less underwriters, less everything because volume has gone down. So you're going to need to do more with less. And again, to avoid 2019 all over again, where you're like, do you have a heartbeat? You're hired. We've got to get away from that in order to scale. So take a look at what you're doing with your labor. Take a look at where your most expensive employees are and then say what tasks are they working on? Are they doing something that somebody with a lower grade can handle? And then how do we Automate some of those procedures that we can just say, hey, we've got appraisal reviews being done via an API read. Because we have an XML that comes with every appraisal coming out. Like, let's just find a way to do this. It's an easy thing to get going. And exceeding customer expectations is one of those things that I was talking about earlier that folds into what Jason was saying. You don't have that customer stickiness. If you don't have something that is really improving the. Their outcome or their process to get there, then you're, then you're not really creating an efficiency.

That's a great answer. I was thinking basically of the amount of FTEs versus the loan volume ratio. Right. That was going on in 2021 and then now and where we're going to be when rates are going to come back down eventually. We don't know when, but they won't come down to maybe 2021 levels, but they will come down some and there'll probably be a little bump. I think we're all waiting for that. But. But when that happens, are there technologies and automation that you can get in place so that it's not the same ratio as before? You can improve that ratio, right?

Yeah, yeah. And you got to be doing that part now. Now, like today, yesterday, the day before, get on the phone, get your. Get your people together, figure out what is in your manufacturing pipeline, where your bottlenecks are, and go get them.

Kevin asked a really great question in the chat. I don't know if Femi, you're able to answer this one. I know that Kirill can speak to this. Do you guys want to give that a shot? Kevin's question was for those that are that use trove, how often do you find you have to run the work number after TRUV to get prior employment or TRUV data? I think that's, that's a great question.

The, the prior employment piece can actually be just fixed by understanding and engaging with your customer. They can put in their prior credentials and it'll return the information, so you should have it that's out there. We found their coverage percentage to be great. And the, the biggest challenge is getting that upfront adoption. It's understanding to the individual loan officers that, hey, I'm not giving you guys an extra task just because I want to make it harder. I'm doing this because I'm trying to save you three or four days operationally or at a minimum of two days operationally. I'm trying to Save the, the company money on what they're spending on the cost to manufacture loans like this is there's a real reason where we put in the efforts to get these integrations. So occasionally you'll have a company where the, where the information just comes back poor. And we've connected with the, with the, with the team at True and they've been able to, to, to clean those up on a regular basis. So it's not very, it's not very frequent on the, on the fact that we have something from True and then we have to go back and rerun the work effort.

Fantastic. I'm actually going to jump on to the next because I want to make sure we get through it. The next question, which is actually the next slide, which is a Bonzo slide, this is how Revolution and Bonzo are working together. And Jason, I'm going to hand it over to you and so you can give an overview of this.

Yeah, you know, just high level. Richard, you know we talked about earlier, you know, depending on, I'll go back to even what Femi said earlier, it's like you're going to have less of a support staff.

Right.

So how do you increase or sustain efficiency with, with your business development, with your conversations, with your people? And you have to have some type of automation, right? Whether that's in processing, whether that's in underwriting, whether that's in, you know, whether that's in acquiring new customers. And when we look at technology today it's about, you know, utilizing technology that's going to save you money, make you money and save you time.

Right?

We, those are our cornerstones of technology that we're going to adopt today. Everything else is kind of fluff. So this is, this is just a sample dashboard of how Bonzo can automate the conversations through your voice. Whether this is business development to critics, past customer outreach, to say top of mind, whether this is nurturing leads who have an app yet to keep them in your funnel. But we want this to come easy where you can build funnels, text messages, emails, voicemails, etc, videos to stay top of mind with it and to stay in front of them to keep those conversations flowing. I love this quote from Danny being the Revolution marketing director said CRM automation is crucial for streamlining process, improving customer interactions and driving business success. It empowers Revolution Morgans to deliver a more personalized which is key there and efficient customer experience while allowing our team to focus on high value tasks and strategic initiatives. At the end of the day we have less support staff Wearing more hats, same concept as 21. We had ton of volume, wearing a lot of hats, but the industry has reversed. We're in that same boat. How do we optimize our time, our voice, our automations to sustain the activity, increase activity and create more relationships at scale. And really that's our focus at Bonzo, is to amplify your voice so you can have your conversations running in the background, have your database sitting in front of you and you can focus on all the nuances of the business that you're working on to be successful and have an up year in 2024.

I'm all for it.

I love it. I'm all for it. How can you not be right? All right, I think we're on the final question here, Femi, and so I think this question is really about how are you tracking your results over time. And I love the quote that you threw out in our practice session where you said you can't manage what you can't measure. It's one of my favorite phrases in business. Right. I, I, I run my own team with that as our kind of our, our flag that I wave. You can't manage what you can't measure. So when you're looking at these different forms of measurement on the right, do Some of these KPIs matter more than others?

Everything's going to matter more than others. Everything's going to matter to different people in a different fashion. Right? So if you're really, if you're taking a look at what you're doing, you're doing new build business, all your, your loan cycle time may not be your concern, it may be your pull through rate. If you're in a space where maybe you're a newer company with what's going on, you don't have the strongest underwriting or processing department, maybe you need to be looking at your fallout rate because your decline rate is less than what you're doing and you got less than what your peers are doing and you may need to be expanding products so that you can capture a bigger percentage, maybe you're a completely mature company and you're really worried about your profits per loan, how much you're doing. Hey, if you're doing all these things and you're doing, you know, $8 billion a year in business and you're losing $534 per loan, it's not really a good thing. Right? It's not where you want to be. So it's really going to depend on what problem you're trying to assess. All of these data or all these data points really, really matter, but all these data points matter to different people differently. So the best thing that I can say is whenever you're looking at, say, you don't say, oh, you rank these KPIs as these are the most important things. Because my scorecard is not going to be the same as a scorecard for your team or for another mortgage company that Jason's working with. It's going to be what we're focused on. So at this point in time, I'm focused on problem A, Problem A really needs that. I need to know what my incomplete application loan rate is and what my cost per unit origination, cost per unit originated is. I mean, like, that's a real setup. That's one of the reasons that we connected with True, because we were taking a look at this and we're saying, hey, we've got customer acquisition because of historically low inventory, it's taking so long for loans to close. How much are we spending on these things in order to verify income so that we can give a pre approval letter for somebody that's happening 90 days ahead. And if they've got, you know, two or three different jobs or two or three different applicants, you could be in the hundreds of dollars just on verifications before anything's, before anything's happening at all. So there's different, there's different ones of these that are going to matter to different people depending on which problem you're going to solve. Don't try and rank them. Look at what your problem is. Understand the KPIs that are related to your problem and then address those first.

Awesome advice. I love it. You really drop some great knowledge. I loved how you were like, hey, let's just break down the entire loan process for our company and look how it should be ideally, as opposed to what we have in place and work towards that. That the, what you just gave right now is a real piece of gold advice as well. You know, the KPIs that were the problem that you're actually solving right now. Look, we're at the end, but I have one piece that I want you to dive into Femi before I let you go. You've done. Thank you so much. By the way. I hope everybody has appreciated this as much as I have. But there is one piece you talked about in the practice session where you were talking about increasing your loan quality and how it relates to purchase price erosion. And I'd like you to just talk about that for a second because I think Operations folks need to know what you're. What you were talking about.

I'm going to stress this in something. This is really dear to my heart and for the guys that work with me and the gals that work with me, you guys know I'm numbers person. I know what matters. I know. I know what is in. I know what's happening within our system in, in a. In from the metrics, in every capacity, there's a couple things that matter when people talk about efficiency. And if you are not improving the overall quality of your asset or your widget, whatever you're trying to manufacture, and in this case, in this audience, we're trying to manufacture loans, if your quality isn't there, it doesn't matter if you ramp up your volume by 20%. If your quality has a 20% decrease, you're going to end up losing tremendous amounts of money. You have got to stay focused on what the quality of your asset is and understand that in every case, if you're just improving capacity and you're not improving your quality with your capacity, you're going to have a real problem later on. It's something that I can't stress to people enough. There was that 80s movie Gung Ho with Michael Keaton in it where they're just manufacturing cars all over the place so they could keep up with the Japanese manufacturers. And they're not putting windshields in cars and everything. They're cutting every quarter that you can get. And the purpose of what they were doing in there is they were just like overly illustrating, look, we can ramp production, but it's going to have a negative impact. And in our business, people are only going to do so many transactions with you. You have to have that positive impact so you get the repeat business so that we can keep things going on. Understand that your quality matters more than anything else. Take a look at your underwriting touches. Take a look at your processing practices. You take a look at everything you do within your mousetrap and make sure that it is all geared towards a higher quality asset. At the end, if your assets great, doesn't matter if your volume's down a little bit, you're going to end up making more money per loan.

I love it. That is great advice to end this on. I think what I always end every webinar I'm a part of is Q and A. I like to give people a chance to ask questions. We've let some questions come up organically. Organically in the chat. You can put it in the Q and A section if you want to ask it there, you can drop it in the chat if you want to do that, but I want to give the audience a chance to ask questions and I'll. And while that's happening, Jason and Kirill, you have any parting thoughts that you'd like to share on the audience? Want to give you a chance to go ahead.

Kirill.

I guess, couple thoughts. First, the market. Nobody does agree which direction it's going to go, how much it's going to go up, down. I think the best thing you can do for your business, as FEMI mentioned, is focus on quality. Focus on like reducing the cost and making your team more productive, especially on the manufacturing side. And by making your team more productive, you will be able to scale faster. If market goes up suddenly, I don't know if that's going to happen, but Fed cuts the rates, great then. And if it goes down, you also wouldn't have to be as aggressive with cuts because productivity like technology, always costs you less than adding new FTs. And I think the productivity from CRM, a good CRM or productivity from like good automation, workflow, automation will always be there and where we can help. I think Richard mentioned something in the chat. You can scroll up. There's like a promotion that we're running and that will help you a little bit because as I know the, you know, the credit is increasing, the cost of soft pool and hard pool is going to go up and FICO is increasing prices again. So this I think is just a small gift from Truth to the market and hopefully we can help you out a little bit in the next few months. Jason, I'll pass it along to you.

No, you know, you know, just, just to echo kind of what you're saying, Kirill, you know, it's, it's. There is. There are better ways to enhance your productivity. Save yourself money, especially right now. I know times are lean. We've gotta, you know, Femi, like you're talking about, we gotta go lean. But that doesn't mean you have to cut on efficiencies. There's technologies out there, like true that are one, saving you money, creating more efficiency. And you're listening from an individual Femi, who's, you know, top 1% in his field in our industry and he's giving you nuggets today.

Right?

And I love what Revolution has done as a company. They're constantly innovating, constantly looking at new ways to enhance their business. They're not stuck on, on the old ways. I know it's easy to get stuck in the old ways. It's very easy to do that, right? We're using the same tech platforms. We're not changing. We've been using 15 years. If you've been using the same tech for the last 10 years, I would take some time to work on the business and reevaluate those costs. Where is it saving you time and money? Is it being efficient and are you, are you wasting money? At the end of the day, we don't have. You don't need this, this wasted tech, this wasted time because the neighbors down the street are using it. I love what revolution. They're innovative in the way that they think. They go against the grain. They, they go, they're the purple cow. When everyone is going left, they go right. And that's really the way they should be looking at our business today so we can have a successful 24 and 25. So really appreciate Richard Kirill, you guys putting this together and Femi, your brilliance on everything in mortgage apps and beyond. It's been incredibly enlightening.

This is really fun for my self esteem. I appreciate. Normally I'm waking up in the morning, I'm like, oh, you look like Mr. Potato Head. Today I come here and it's, it's appreciation. We like it. I love, love sharing the screen with you guys. Having some great conversation. Good stuff.

Thanks, everybody. Appreciate it. That was hilarious by me. Thanks, everybody. Have a great day.

See y'.

All.