Staying ahead of the curve and anticipating the future in the mortgage industry

Foreign.

I'm Zeb Lowe. I'm the director of the content studio at Housing Wire. And today our topic is Staying Ahead of the curve and anticipating the future in the Mortgage Industry, presented by Troove. Our webinar today will be moderated by Richard Greaser, the VP of Marketing for truv. Richard, the floor is yours, everybody.

If you've come to hear about staying ahead of the curve and anticipating the future in the mortgage industry, you're come to the right place. That's what we're here for. Let me start by introducing our esteemed panel. We have two really exceptional mortgage leaders that have agreed to join us today and talk about this from their perspective. I'm going to give the floor to J.R. huber, EVP of sales and Production for Mortgage Investors Group. And I'm going to ask him to just say a couple minutes about him personally and, you know, perhaps a fun fact that, you know, people might not know about you.

Thanks, Richard. Yeah, I'm with Mortgage Investors Group and I'm the head of sales and production. Our company's been around since 1989. We're located in Tennessee and it was started by two loan officers, Chrissy Ray, Chuck Tonkin. And they basically got together and said, hey, you know, let's, let's build a company and, and do what we love to do and kind of do it our way. And it really, it started with first time homebuyers and the housing programs associated with, with those buyers and then over the years their families and, and all of that has helped us become Tennessee's largest lender. And then now we've expanded into 10 states so we still keep that same culture, you know, do the right thing. Me personally, I've been here eight years. My journey was also starting as a loan officer in 1996 and what is that? About 29 years in the business myself and I've been a president of a mortgage company prior to coming here. You know, what I, what I enjoy about this business is seeing loan officers start into the industry and then become successful. That's what I really love to see and put a lot of pride and reward in me personally. I found out Richard and I, we known each other for a little while now and we both have twins. My two girls are sophomores in college and quite different experiences. One's at Alabama doing the Bama rush experience right now and her second year and then the other ones playing soccer and getting ready to have her first game of the season this week. So some differences there in their lifestyles. But yeah, all good, Taylor.

Why I'm not currently at Alabama, participating in Alabama Sorority Rush. My name is Taylor Stork. I am the chief operating officer for Developers Mortgage. I'm also the president of the Community Home Lenders of America, which is an association that's trade group that represents independent mortgage banks. I, like Junior, started off in this business as a loan officer in 1996. We got the same timeline. I didn't realize it was 29 years. Thanks. Thanks a lot.

Appreciate that. Almost. Yeah.

To this day, I am still a loan officer. I still am a licensed person and I've got a couple loans in my pipeline right this second. So I have been living and breathing the origination space for a very long time. Turns out a couple different cycles. The, the interesting fun fact about me is that in addition to doing this finance stuff, I live on a farm and on the weekends you'll find me on a tractor, typically amongst a bunch of horses.

Nice. That is the first time that I have heard that. What. We're gonna have to talk about that, Taylor, after this. That's pretty cool. Hey, listen, everybody, I think we've got a quorum here. I'm going to share my screen and we're going to kick this off and get into the meat and potatoes about what you came to hear about from these experts. Let's go. Can you guys see my screen?

Yes.

Yep.

All right, so you're here to hear about. Here, here about staying ahead of the curve and anticipating the future in the mortgage industry. So let's jump into it. The, the. I think what's on a lot of folks minds right now is where are we going? There's a lot of, I would say, different factors that might impact this in the coming months. Right. In a very short amount of time. And so I'm going to ask Housing Wire to just take a pulse on the audience. Let's do a quick poll. I want to see how people are, are feeling right now about the outlook. So we're going to ask a poll and that's what is your outlook for closing out 2024 and into 2025? Panelists, you're not allowed to answer because we don't want to sway that at all.

Yeah.

So I'm gonna, and while, while everybody's answering this right now, I'm actually going to ask, I'm going to ask our panelists, what's your outlook opinion on the current state of the mortgage market? And you can talk about technology too, if you like. But you know, what's your. Let's start with Taylor. I'm going to ask that question to you.

I mean, we started seeing volume pick up a few months ago and it has held steady. My outlook is generally pretty positive, but, you know, again, I'm. I'm a generally pretty positive person. So I always think that business is great and life's great and the next thing is going to be better than the last thing.

Love it. Tayo, you have anything to add? By the way, Taylor, that was the shortest I've ever seen you respond to a question in. In my entire.

I'm trying to just completely break all the rules today, Richard, and blow your mind.

Go ahead. Me, too.

Well, I think. I think going into the election and we're not going to see some major changes in rates and all that is my expectation. I think we'll see a little lift in refis through the winter, probably next spring. We'll see the purchase market start to pick up. So I think it's going to go in the right direction, just not as fast as I think everybody in the industry would want it to. It's been a long down cycle. I mean, we're starting to see some optimism like Taylor said, but it's not going to be that swift return to normalcy that everybody's hoping for.

Yeah. And beginning of the year, I think people were expecting a lot of rate cuts and. And now everybody's kind of holding their breath to see what happens in September.

Listen, I want to say, J.R. you and I started this business. This was normal in 1990.

Well, that's true.

This was normal in 1998. This was normal in 1999. And quite frankly, this was normal in 2019.

We were happy to see it in 2019. Now it just seems like a long cycle.

Yeah. All right, well, let. Can I please ask for the results to be shared with everybody? And let's take a look and see how everybody, everybody voted here.

Looks like we have cautiously optimistic. Yeah. Yeah, that's where I would be.

So it doesn't seem like a surprise. Surprises either of you, whoever the guy.

Is or the gal is. That said, very optimistic. I. I echo that one.

Yeah, that's you. I love it.

No, you wouldn't let me click.

I wouldn't let you click. So you get to vote. Now, I like that you don't influence the vote by talking about how you feel before the vote's done because it does affect folks opinions. I've seen it many times. Let's jump to the next next question here. Let's kick it off. What does it mean to be 100% digitally data driven? JR, why don't you start us off on this answer?

Yeah, so we, we talked about this. Taylor and I were saying, you know, we've always been data driven, but now the evolution is the digital or the electronic, the third party sourcing of the data, so doing away with the paper trail that we used to always call it. So you know, that's where, where TRUE has helped us kind of turn the corner. It's, you know, we want that information from a third party source up front and a lot of, a lot of lenders have that upfront underwriting. Well that doesn't mean anything if the data is not accurate. So you know, we, we like the ability to break out the income to get start dates, to get job titles, to get overtime commissions, all those kinds of things and have that in the beginning so that we have the accurate data. It flows through the process all the way to the audit, to the post close and delivery to the servicer. And that's really, you know, we want it to be day one certainty focused for a long time. It's not about day one certainty as much as it is. Just that philosophy though, whether it's your appraisal, whether it's any credit information, income asset, all that just needs to be third party source, be consistent all the way through and that's, that's where you'll see some time savings. Taylor, what do you think on that?

So I agree with you and I want to, I want to put this into a different context. When I started out as a loan officer, once upon a time, you know, when dinosaurs were still roaming the earth, the like, what I did back in the day was give a borrower a list of documents and say bring all this stuff and give it to me and then we'll do your loan application. Now I understand that with Trid, that's not exactly what we can do today, but literally I would be, I would, I would respond to them. This was before we had email and I would say bring me, you know, your last couple of pay stubs, bring me your Last couple of W2s or if you're self employed, bring me your tax returns, bring me your bank statements for all of your accounts. And I usually ask for one or two other things and from what they brought to me, I was able to scour through without even having a conversation with them and probably put together 2/3 to 3/4 of the loan application, answering a lot of the information just straight off of the documents. That process started to Change. It started to change in the early 2000s with the evolution of DU, and then it changed further and it changed further. And what I'm seeing personally is that with the advent of new technology such as consumer permissions data as provided by TRUV and some of their contemporaries, or through other digital sourced data that we're able to get early and through the use of APIs to plug this stuff directly into our computer systems early on, we've kind of, we've kind of, we've kind of gone back to the future. Right. So what, what, what we're kind of talking about is getting back to the point where we look at the data from the primary source, but instead of looking at it, you know, with our eyeballs by sitting at somebody's coffee table and, and, and you know, going through bank statements with them while their dog is barking at us, now we're doing it electronically using algorithms and computer technology.

Yeah, you know, Richard, it also, so I was out doing a couple presentations this week to Realtors talking about the NAR settlement and the impact of that. And you know, I think it was a wake up call to the realtors that, you know, we need to be evolving. And you know, one of the things they're doing is collecting more data, more information. So like on the contracts, they're now breaking down what the sellers are paying for. So it's not just seller concessions and is X, it's the seller concessions are going towards now, whether it's commissions, closing costs, prepaids, maybe it's buy downs. There's, they've doubled the amount of lines to capture that information so that they can be more informed when there is a cycle, when there is a market movement and, and when you're doing a listing presentation, you can explain to a seller, hey, this is why I'm, I'm recommending this or this is where the market is taking us and, and where you'll have a better likelihood of getting a buyer. You know, it's, we're getting more information and more data when we collect from these, these other sources and we're able to do more things and more predictive analysis of trying to help the consumer. And I think, you know, we want to focus on how do we keep improving that and make the customer experience better too. It's all on the same, all along the same lines.

Well, I appreciate the plug. Usually, I love what, usually when I hear about people talking about TRUV and some of the consumer permission players out there is the great savings over the incumbent that they're getting and you guys are talking about the benefit of having all the data upfront and having it be accurate and what that does for the loan origination process, which I love. I mean, it's equally important. So let's, let's jump to the next question here. This one's interesting. You know, there's, we've all seen recently, just very recently in the news that a lot of the big tech stocks over invested in artificial intelligence. And this question is not just around artificial intelligence, around automation and a lot of technologies that are improving the origination process, but I think lenders have invested a lot in, in different technologies in the hopes that it's going to shorten days to close lower costs for their organizations. And so this first we're going to kick off a poll to the audience and while that poll is going on, I actually am going to ask JR Then Taylor to give their opinion on whether, you know, automation has actually resulted in shorter days to close or lower costs for their organizations.

So I may sway voters, but I was actually talking to our CEO Chrissy Ray about this yesterday. We were just having a conversation. And, and you know, it's funny, everybody has to invest in technology to keep up and, and there is definitely a need for it, there's definitely a place for it. But I think the industry as a whole hasn't figured out exactly what to do with it to be the most efficient. And you know, we talked about 25 years ago, we were using the same amount of people to process or manufacture the same amount of loans and it's even more expensive because now on top of those personnel costs, we're investing in technology. And, and Taylor kind of alluded to it. You know, you have these APIs where you're, you're plugging different pieces in along the way and then you're getting your recommendations of oh well, we're the LOS provider and we recommend these, these folks. Well, that one that you recommended that you're integrated with doesn't do everything we need. So we have to have a second option here as a backup for 15% of our volume. I mean it, it just, it's layers and layers and layers and, and I think where we've lost sight or where we, we actually need to go is end to end in the process, starting from customer acquisition or lead acquisition, all the way through customer retention on the servicing side and really looking at our manufacturing process from the beginning to the end. And I think what I felt over the years, just not just with my company, but as a representative in the industry through MBA and conversations, nobody's figured out that entire solution. It's, hey, we've got a good solution for, I mean, just think just historically, even on the credit side, we still have three bureaus, essentially giving us 95% of the same information. But we have to have all three bureaus. And that's an expensive cost. In the process, that cost has gone up dramatically. I mean, you layer all of that and it's okay, where is the savings, where's the efficiency? So, and I know Taylor's got a similar opinion and maybe some other examples along that, but, you know, I don't know that we've figured that out. And, and I think part of the mindset is how we handle the technology and training our brains to like when I think about the LOS or even data verifications, electronic verifications, it's, it's now task based. The manufacturing process is task based. And we've done it so long where we've done it manually, we've looked at everything, we've created different workflows that work for us that are comfortable. But if you follow the, like the LOS task based system, you'll be more efficient. It's just getting everybody on board with that. Taylor, go ahead. That's a long, long answer.

What was the question? You know, when looking at technology versus expense versus productivity over time, which I think is where we started with this. And jr, you mentioned that you're a member of the mba, they have some great data and a little over a year ago, so they put out a, they put out a Friday chart. Every Friday they put out a chart. And about a year ago one of the charts showed, and I wish I'd saved it, one of the charts showed the number of closed loans per OPS fte. And so it was processors and closers and it might have been underwriters. Yes, it was processors and underwriters and closers, the number of loans closed per OPS FTE. And it showed that from 2000 until current, which I think was last year, there was a straight line going down and the number, the, the cost of closing those loans was a straight line that was headed at about a 45 degree angle straight up. So what we've watched to, to simplify this is that over the last 25 or so years it has become harder to close loans and costs more to close loans. And the technology is not only not keeping up, but the cost of that technology is helping to increase the cost of the loans themselves. And anecdotally, if you talk to any lender any lender. I challenge you not to find, to find somebody that argues with this. We have to hire individuals to teach them how to watch the technology and make sure that the technology does the right thing. And so we watched that in a very, in a very simple way. We look, we watch that. We started watching that with DU 20 years ago when they first rolled out DU and all the underwriters had to learn how to double check du. Right. And they're still doing it today. They still all double check DU and lpa. And that's fine, that's their job. But the point in the statement is as we add technology to create efficiency, we also inevitably add people to double check the technology.

Yep, yep. So let's, I mean, I would say if I had to summarize both of your answers, I would say not really. And I'd like to see the, the poll results. Let's see if the group, everybody who's attending right now, see if you've swayed their opinions. As you were, as we're talking here. Yeah, looks like everybody's agreeing with you. 71% of the group feels that automation has not.

They're saying it helped.

Oh, they're saying it has. Excuse me, I read that backwards. So, okay, so There you go. 29 are on your side, 71 on the other. Well, that's interesting. I wonder. We have a lot of technologists in the group or whether in the audience or whether lenders really feel that way. I'm going to just assume that lenders are feeling that automation's improving their business and shorting days to close, lowering costs.

Depends on your role. You know, I think up front it has really helped with the customer experience and providing the ability, you know, to close a loan in seven days. We can do that if the customer's on board and providing the information. We can, we can work it through the process and whatever percentage of loans can, can fly through the process. Now some that have the layers of technology that kind of make it harder and those are the ones that stand out and probably the ones that get escalated that, that stick in my mind. The ones, the ones that fly through, I don't really see well.

So let's jump into the next question here. Thanks everybody for the poll. Let's get to some examples, like how is technology changing the business right now? You know, that's what a lot of the folks, the meat potatoes, like where people have come. Can you guys give some examples? I've thrown a couple examples in the loan, loan origination process on the slide from AI powered marketing, like you know, suggesting to a loan officer what they should be saying to a borrower, maybe based on hundreds of loan officer con or thousands of loan officer conversations that they've read through and made, you know, with their, with their learn learning language models, made their recommendations on what they should be saying. A lot of different examples. So I'm going to give it right now this question to Taylor first and.

Then JR So we're not really using any AI powered marketing yet. What we are doing is we've rolled out an AI driven chatbot, LLM, source of automation or source of artificial intelligence that enables loan officers to quickly dig through reams and reams and reams of product guidelines and program guidelines and underwriting guidelines in order to get quick answers and get the right decisions as they're trying to work with their clients to structure loans and figure out what people qualify for. It's been a huge, it's had a huge positive impact. My folks, my folks absolutely love it and I see that as a pretty big service tool on the front end for my sales team. But honestly I see it as a huge tool for my underwriting team for quality because it means they get better loan applications and better structured packages into the pipeline in the first place and it enables us to do faster approvals.

Can I just throw out there that Tracy Steers AI assistant is taking notes and throwing bullets into the chat right now and throwing a summary. So I just think it's so interesting that we're talking about this right now and this is happening in the chat. Junior, why don't you go ahead?

Well, I think where it has definitely helped, not to be completely negative but it has definitely helped on the back end with delivery to the investor with the audit. You know, being able to use AI to analyze and, and review and make sure you have everything in order that, that all your data points match and and are completed. That's saving, I mean that that saved 90% of our time on the back end there where I would love to see it go. Taylor's kind of talking on how do you help the customers more opportunities but you could get so many layers deep and really if you could use, they have down payment assistance. Are they self employed and what programs would be beneficial to them and kind of stack rank, hey, this person might be best suited for a 10% down conforming loan. And then here's what an FHA loan would look like in comparison and be able to do that with an entire database and then have a report generate to a loan officer that says, hey, here's your top 10 prospects today. Give them a call. There's a lot you could do with it. The more data that is entered and captured, the more robust the opportunities are. And the same with your pipeline. Where I envision what would be great in the, in a manufacturing process is looking at the parameters of a loan. Again, if you're looking at products, programs, self employed, this, that, all the layers of it, if that could just take a swim lane and go through the process and go to the right processor, to the right underwriter. Maybe it skips a processor because it's complete. Maybe it skips an underwriter because it's, it's a standard, straight term, re rate, term refi. And, and really just that's where I'd love to see the efficiency gained is, you know, a lot of lenders pay a bonus to a processor for volume that that processor is doing five different types of loans in a day. If they could work on the same loan and be experts at this type of a product or program and have that automatically funneled to them, you could really gain efficiency. And I think that's where the opportunity lies. I think that's where we're going. But, but I think would be really beneficial.

Well, I love the way you guys just answered that question. So that lets people know a little bit about the opportunity with technology and where it could impact the business. Now let's talk about, okay, you found a technology that you kind of see where the puck's going, you know, technology that you need to invest in. But let's just talk about the trends in the market, right? This is what's happening for mortgage lenders. The NBA releases a statistic every quarter on the average cost to originate a loan. And that cost is going up. It's between, you know, one and $2,000 consistently quarter over quarter, and it's increasing. And if you also, they also release a statistic every, I think it's every quarter that the average IMB is underwater on a lot of these loans as well. I think 60% of the market actually just in the last quarter were not underwater, which is, which is actually a good sign. And so, you know, how do high origination costs impact the lender's willingness to invest in new technology? You think about an operator, and they've got all these different technologies already that they're using. The average shelf life is like seven years or so. And you're trying to juggle the, the balancing act of, you know, keeping those up to date and refreshed or Trying new ones that are innovating in that, in the space. You know, how, how do you balance the high origination cost that's current, the current situation that lenders are facing with what, you know, you need to do? And I'll, I'll tee that up to junior first.

Sure. And I kind of touched on this. I mean, being in a cycle like you mentioned with which is actually an improvement, 60% of IMBs being profitable now, but still it still holds that the cost of origination is so much more. And it's like, okay, when is the time to really take the deep step back and look from end to end at your entire process? And by the time you do that, a lot of times you're in a situation where you spend a year or two analyzing. And like you mentioned, the shelf life of some of the technology is seven years. You're like, okay, how do we predict what we need in the future with our limited funds and resources at the moment? I think what, what you have to do right now is, is look at your, look at your step by step, the milestones in the process and try and break it down and say, okay, where can we have the most impact? Where can we leverage our technology more? We're kind of doing that. We rolled a new LOS a year ago, and now we've, we've got enough information that we can kind of go back and look at the milestones in the process and say, okay, can we automate anything else? Can we, can we avoid going down this swim lane or this, adding this to the process? And then also now we're seeing where some of the uniformity has diverted. So you may have a branch doing it one way, another branch doing it a different way. Okay, now we can figure out where have they gone and which one's better. Process. So I think right now, in this kind of an environment, you just have to break it down milestone by milestone. But the right way to really do it, to get the most efficiency is look from the very front end of customer acquisition to the very end final end of servicing and customer retention.

And rolling out a new LOS is no small undertaking. I would argue that's one of the biggest pieces of tech that you could swap out. I mean, you, you're a fantastic customer of True too. And I'll just give a plug that that's, that's our sweet spot, right? Saving lenders cost right now in this market versus the incumbent. What used to be $20 for an income and employment verification is now almost $70 for an income and Employment verification. And that's the one time you do it. Usually you do it 10 days before close, you're at 140.

Yep.

If there's a CO borrower, you're at 280. Suddenly it can go up if there's a mistake from who just orders it accidentally. And next thing you know your file can be somewhere between 250 and $500 for verification of income and employment.

Well, and that's 100% accurate. I mean that is how we, we connected with true. We broke down that, that piece of the process and said okay, you know, here's where we're leaking or here's where we need to get better, better data in. We, you know, better pull through all of the capture rates, everything like that. Where can we improve? And that, so that's one piece of it. And yes, we did have a great experience and an improvement along that segment.

Thank you JR Taylor, give me your thoughts here. Taylor.

Well, so I look at this, I try to look at through a slightly different lens. I agree with everything you just said. I think it's important when you're looking at matching revenues and expenses and trying to figure out where you can, where you can find leakage and where you can shave expense. But I also think it's important to look at the greater picture and identify where you have your largest expenses and you can simply avoid them altogether. Right. So what's the biggest expense, typical one time expense that any mortgage company has, it's a buyback, Right. If you got to buy a loan back, that's a huge amount of money. And over the last couple of years we've seen the numbers of buyback requests from the GSEs as well as from aggregators go up significantly. And what we've observed is that a lot of the expense that is the result of those buybacks, those buybacks are often driven by very minor technical details along the way. Errors, errors that might not have been picked up four or five years ago before some of these technologies were being introduced at the regulator level or at the GSE level. And so now what lenders are really trying to do is they're trying to also install technology, invest in technology that enables them to keep up with the compliance process to make sure that once you sell a loan, it stays sold and doesn't, you know, come back on you like bad fish. So, so I think that part of, part of the willingness to invest in new technology is less a willingness but more an, a necessary evil to make sure that you're staying abreast and ahead of all the things that are otherwise going to turn into, you know, a gigantic repurchase requirement that nobody wants to face. So that's, that's structural technology that's staying up to date on. And so, so where I'm going with this is I agree that you can save 30 or 40 bucks if you get a, you know, a VOE One way versus another. That is 100% true. But I also think that it's important to, for instance, get the Voe that's going to qualify you for rep and warrant relief from Fannie Mae and from Freddie Mac. Because quite candidly, I could care less about spending or saving 20 or 30 or 40 bucks to buy a Voe that doesn't give me rep and warrant relief. With my ultimate end investor. I look at the big picture, not the small picture, and I see that rep and warrant relief as a big picture item.

That is a fantastic point, Taylor. I couldn't agree with you more. And a lot of our customers feel the, feel the same way. Let's get into the next question here because I want to make sure we get through and just leave a little bit of time for, for questions. So. Okay, let's talk about the roadblocks that you typically see implementing in a adopt, adopting a new technology. I see a lot of variance in the adoption from our, in our customer base with the different customers that I see. A lot of it has to do with leadership and the way that it's implemented with a top down versus bottom up strategy. Junior, you have.

Hold on, Junior. He just blamed us. You know what? Literally just got blamed.

I think it may be warranted with, with some of the lack of success we've had in, in implementation and maybe warranted.

I'm making your life meaningful, Taylor. You have meaning in your life. And that's what I mean, what I'm saying. And so, you know, jr, you have a fantastic story with our implementation rollout and I'll let you speak to that if you want. But Taylor, I'm going to give this one to you first. What roadblocks do you typically see implementing and adopting a technology? And how does a lender get past that?

So I'm going to, I'm going to give the, I think, I think there's two sides of this coin and I'm going to, I'm going to leave one side to jr, which is kind of the internals. Right. I have the same internal struggles as anybody else. Employees don't like changing the way they do things. They don't Want something that's going to take their job away. They don't want to embrace stuff, you know. And that is one set of issues that I think JR can dig into a little bit. I'm going to set, I'm going to look at the externals, right? So the biggest external is the ability to connect with the technology that exists. And so what I mean by that is most of us, our core technology decision is not what brand laptop you buy for people, it's what brand losing you put your production through. And that decision largely dictates what technologies are available to you in every other function. So Richard, if TRUV didn't connect to my los, I wouldn't be doing business with True. And that is an external roadblock that I simply can't overcome. Particularly when some loses make it extraordinarily difficult for third party providers to connect with them. And that's unfortunate, but that is a circumstance in our industry. It's one of the reasons that one of them had a hard time getting a merger approved recently. So I think the biggest external is simply the ability to make our systems talk to one another. And without that ability then the technology isn't technology.

And just. I'll just add two. Just add this. You're so right. I mean just that piece of integration is very hard to solve for, even for tech companies can have the best relations with all the different tech companies. But everybody's got a list of priorities. Internal product roadmap developments, right. Other integrations that they're working on. And so to, to fast forward these integrations for lenders, even lenders who want to buy your product. It is a real challenge in amongst tech vendors, not just lenders, you know, who, you know what gets it, gets it moving though, is when lenders push on their tech vendors to get the integration done. So I would actually say that the most effective way to get something integrated is for the lender to reach out to both tech vendors and push, apply pressure. That's usually how it gets done. And from what I've seen, and this is just me, my honest opinion, junior.

Well, yeah, I can tie into that. Well, because it's interesting. He makes a great point. So Taylor talks about the connection of the los and we are actually not implemented. TRUV is not implemented into our los. But we are still having great success and it's a rare situation. So I'll kind of explain how it came about was we had the recommended providers for employment, income, assets and as we set it up we weren't having great success in our deployment of the los. And, and there's, there's all kinds of challenges. Like when you roll an los, everybody knows it's gone on a new one, that it's, it's not going to be smooth and you're always going to have things that were unforeseen. So to add, you try and simplify it by using the recommended providers. But we were having challenges beyond that of the integrated system. So it wasn't the connectivity, it was the success of the providers. And, and then we, so instead of, like I talked about this last time Richard and I talked was, you know, whenever you, so as a leadership team, we would have our demos of providers. Oh, here's, here's who the LOS provider recommends and then we do the demos and of course all the demos work. And okay, let's use this. It's very simple. What we didn't consider was the customer experience and the loan officer experience. And, and so after we, we identified some challenges, we got recommendations not from LOS providers but from conferences, from mba, from, from friends in the business, other mortgage companies, things like that. Hey, who are you using? How's it working? And, and what we ended up doing was instead of that top down approach where hey, this is what you're going to use for technology, we said, okay, those that are having the most frustrations, do you want to be part of the pilot group? And we're going to implement this new provider. And so we had people raise their hands and they were already motivated to make it work better and come up with a better experience. And then when we rolled it out, we had a very good rollout experience with our rep from True, showing us what the customer sees, what kind of issues they may have, how to avoid it, how to set up the expectations. And then the loan officer was capable of answering questions. So, and, and we had the whole list of the eligible providers. So we knew going in even without integration, hey, I'm going to send you this link, you need your payroll provider password and then I'm going to pull in all the information I need. And that was a much better experience because we got better data and then the data flowed all the way through the process. So, so that's, that was one example of avoiding a roadblock where, and Taylor gives the perfect scenario of how that, you know, LOS providers drive a lot of that. And yet if there's, if there may be vendors that miss out on opportunities because if it's all about the integration, then, you know, you may not even get a shot. But in this case, we got recommendations from other partners in the industry and, and had a good experience on that.

I just love to hear that, you know, you're having great success not even with an integration with one of the LOS or POS providers that we integrate with. That's fantastic to hear, really. And you are. So let's jump in. I want to jump into the last question here to kind of send us off. You know, I used to ask this question on a larger timescale. Like I used to ask this over three years, five years, and I don't think it's really that relevant anymore. That's why I changed it to a shorter time period, like six or 12 months. Things are just so unpredictable. If you just look back at the past couple years, I don't think anybody could have predicted what's happened since just from night, from 2019 to present. I know from, I follow all the leaders in the space and I haven't seen anybody being able to predict what actually happens. So he was raising his hand, saying he predicted it.

I want to go first. Can I go first?

All right, so my prediction. Let me just ask the question.

What is your expectation for technology improvements over the next six to 12 months? Taylor?

My expectation and prediction is that in the next six to 12 months true will get a, will roll out their asset program and get approved for ssb. That's my expectation.

Thank you. It wasn't supposed to be about True, but I appreciate you, but I need.

That, I need you guys to get SSV approved.

Yeah, we're, we're right there, right at the finish line.

Good. So in all seriousness, I, I think that we're going to see a couple of things and I'll. One of them is I am hopeful to see more third party vendors embraced by the, the GSEs and, and welcomed into the Day 1 Certainty Program, specifically into the SSV program. That is highly limited right this second and it's a great opportunity. We need to enable borrowers to use positive rents and rental history. We need to embrace that technology to do that. And, and in order to really take advantage of some of the advances that Fannie and Freddie have done relative to their missions, we need the technology to be enabled to support us to originate those loans. So we're not quite there yet. And so one of my big hopes and predictions is that over the next six to 12 months, some of the folks that work at Fannie and Freddie under day one Certainty and AIM and all those initiatives push through a number of the third party requests to get those Approvals done. And I'm pretty sure that some of the folks are texting me right now.

Well, I'll throw out there that the, some of those folks at those organizations, I've been hearing really good, positive feedback from lenders about them. Like they are doing, like the improvement that they're seeing in the work that they're doing is. Yeah, really, really great, actually. Yeah. Which is, which is great to hear. J.R. do you have anything to say?

Well, I may get on a soapbox on this one, but I, you know, I really think that what I would love to see, and I don't know how realistic it is, but as an industry, we need to be able to open more doors to home ownership. And I think there's a, an unintended bias of opportunities. And I think a lot of it centers around how the business has been set up for many, many decades is traditional credit versus what the evolution of society. And, and you know, if there was a way to have some sort of social score where it takes into consideration people that, that volunteer and people that donate and, and people that doing all these other ancillary things like, you know, helping family members and, and really whether it's a, a cultural bias of not having traditional credit, whether it's a choice of, hey, I don't want traditional credit because, you know, I don't want to borrow money. It, it limits the home buyer opportunities that are available. And, and I really wish that there was some way to use AI, to use technology, to use any of those resources out there to get a better idea that if somebody is able to have an Amazon account or a Netflix account for 10 years, that, that, that shows that the likelihood of repayment if they have a 401k or retirement account, you know, things like that, that, that aren't seen on a credit report and, and the, the cost of credit has skyrocketed and the information that's provided is relatively the same. And then you're, you're forced to use three bureaus now. You know, they're trying to do the buy merge and that's been pushed back and back and, you know, may help slightly, but I think that there's a real limitation to opening the path to homeownership. And, and I don't know that enough's really being done about it. So that, that's kind of my soapbox to end this. And, and I would love to see technology used in ways to, to do that, to create more paths.

I think that's a beautiful way to send us off. I Mean, everybody's saying it. It's never been harder for a first time home buyer to get into a home. I mean prices of homes are through the roof. It's not going anywhere for. It's going to stay high. And you know, and, and it's really expensive to do, to do a mortgage at the moment. So, you know, anything we can to make it easier for borrowers to, to get into homes. I mean that's the number one source of wealth building in this country historically. Right. And most people's real wealth is in the home. Yeah, they plan for their retirements. And so I think it's not just, I hope it happens. I think we have to do this as a country, we have to make it easier because I think that's right. The current generation of, you know, millennial, millennials and Gen X's are having a, gonna have a hard time catching up. That's my, that's my thought. So. All right everybody, thank you so much for.

Hey, I saw a question on the ssv. I love it. I don't have my chat pulled up. I think they were asking what it stood for. Single source verifications that were. Taylor.

Yeah, the Fannie Mae program Freddie has something similar. I just don't remember the name of it. So forgive me all my Freddie friends. The. And what it is is the ability to, for DU and for LP to review digital assets. So to technically review the data that comes through the feed on bank statements, when those bank statements are delivered through one of the eligible third party providers. So when it comes through a third party provider digitally and LP or DU can read the bank statements and it can see that there are payroll deposits being being deposited consistently. It will use its own algorithmic math to calculate what the income may be for that borrower, what the allowable income is for that borrower. And then you receive a rep and warrant waiver saying that as long as your loan has that income in the income box, that you know the income is approved, functionally approved. So what it functionally does is it creates a, I don't want to call it a no income verification loan because that's not the right way to say it. But you don't now have to go out and condition for pay stubs and W2s and you don't have to worry that a finding will be reversed on sale of the loan to an aggregator or to the GSE because you have a rep and warrant waiver saying you no longer have to worry about the income calculation. Your DTI income stuff is approved that's what SSB is. It's not available through every aggregator. It is available directly through the GSEs and through some aggregators that support it.

Yep.

Taylor, would you say there's a certain type of borrower that, that these are good for?

Yes. People that buy houses.

Man.

W2, you know, something with a history on the bank statements that, that shows the consistent income coming in and then it, it, it does its own formula for taxes since that's the net income that's seen.

Yeah. Love it, everybody. Taylor and Junior are giving their time for all of us and I just want to thank them both for, for doing this. Thank you. So do a lot for the industry and, and I just want to say thank you on behalf of everybody, even. Yeah.

Thanks, guys. All right.

Thank you.

And thank you, everybody.

Thank you, everyone for joining us today and for being such a good and engaged audience. And a special thanks to our, our. Our panelists for the, for the insights and for your. For your expertise. We really, really appreciate it. For those that want to revisit today, today's discussion or share it with your colleagues, we have an on demand version that'll be available next week. So just keep your eye on your inbox for the link and feel free to reach out with any further questions or if you have any feedback for us. So we appreciate your participation and we look forward to connecting with you again soon.

Thank you all.

Thank you all.