Unlocking Success: The Power of Strategic Partnerships Between Lenders and Vendors

Beautiful.

All right, let's go ahead and get started. So, good afternoon, everybody, and welcome to MBA Education and Truve presents Unlocking Success, the power of strategic partnerships between lenders and vendors. My name is Danielle Jackson and I'll be facilitating today's session. Just a couple of things to note about the Zoom webinar platform. You can bring up the Q and A box by clicking on the Q and A icon located on the black bar at the bottom of your screen. You may need to wiggle your mouse just a little bit for this bar to appear, but once you click on the icon, a box should pop up, and this is where you can enter in any questions that you have for our panelists during the webinar. You do not have to wait until the end. If you have a question that comes up, please feel free to put it in the Q and A. Chat as soon. The Q and A box, not chat as soon as it comes to mind. Once the webinar has concluded, we will provide a link to today's recording for your convenience so that you can go back and view it at your own leisure. Also, at the end of the presentation, we will have a short survey, so please make sure you provide your honest feedback of what you thought of today's discussion as it helps us to improve our future webinar offerings. Now I'd like to introduce our moderator. For today, we have Richard Greaser. I was going to get that right from Truv. Richard, the floor is all yours. And thank you all for joining us on today.

Danielle, I'm super impressed that you got my last name correct. I mean, everyone butchered that one.

I may have asked someone before we came on. So.

Daniel, thank you for all you do. Thank you for that introduction, everybody. Welcome. If you came to learn about having a really, really great partnership between your lenders, and if you're a lender and you're looking for great, great best practices for your partnership with vendors, you've come to the right place. And if you're a vendor and you want to learn how to do it, how it's done, very well, then we have a really special guest today that I brought on to really help us with that, actually. Sorry about that. Excuse me. There we go. And without further ado, I am going to introduce that special guest. We have Josh Byram, SVP of Technology and Innovation at Prosperity Home Mortgage. Josh, thank you so much for joining us today.

Thank you, Richard. Yeah, I'm from Prosperity and we are a full service mortgage banker. Purchase, primarily a purchase lender. Realtor affiliated, doing business in 48 states in the District of Columbia. Thought I'd take that out of the way, Richard.

Well, I appreciate it. I will just take two seconds to tell everybody who's listening why this is actually a little bit special for me. Because, you know, I have a close friend of mine who reached out to me the other day, this was about two months ago or three months ago, and he sent me a text and he said, hey, I think I just use your technology. It was. And I was like, well, how was the experience? And he said, oh, it's really easy. It took two seconds. And it turns out he used Prosperity to verify his income and employment. And Josh, I'm just really happy for me, it validates my career and personally when, when that kind of thing happens. And it was, it was a really great experience. So I'm. For me, Prosperity is a very special client and Josh is super knowledgeable. So I think everybody who's listening today is going to get some really great takeaways in terms of best practices for partnering with vendors and also for their verification of income and employment, specifically implementation, onboarding, success. You're going to hear all about it right now. So without further ado, I'm going to start us off just by setting the table a little bit. You can see in Q1, 2024, IMBs were having a real tough time. They were. The average IMB was underwater about $645 per loan. And recently in Q2, the NBA puts out this statistic that was a little bit better. I think 60% of IMBs roughly were posting a positive $693 per loan. And we've all seen that obviously in September, the rates came down a little bit. Fed did the mortgage service in industry and the consumer service by lowering rates. And so that's a lot, a lot of that, I think, is what you're seeing right now with some, some of the refinance business that's coming in. So. But what, you know, even though that you have that positive news there in terms of like very recent, where rates are going, where production is going, the cost for an average IMB is still very high actually, and getting higher. And specifically for verification of income and employment, you can see that using traditional providers who will not be named, but you know who, you know who they are. If you're, if you're.

We know, Richard. We know who they are.

We know.

We pay the bills. We pay that big bill every month. Yeah, we know who they are.

Well, the cost for a verification of income and Employment is anywhere between $49 and $123 per pull. And if, if there's two borrowers, a co borrower on the application, you can easily reach $492. And you know, this is up from where it used to be, you know, a couple of years ago, probably three or four years ago, at like $20 for verification. So IMBs are definitely feeling this right now. And what we're talking about today is the experience that Josh has had at Prosperity working with Truv as a vendor partner to reduce the cost of those verifications by about 80%. Josh, you have anything you want to add there on the cost?

Yeah, I mean, if anybody is not a lender that's on the call, you might think that that $492 number is an exaggeration there. It is not. That is what we're paying for. You know, we're paying $123 for an initial pull for a borrower, then another 123 to re verify them prior to, prior to closing. That's $246. And you have two borrowers, you get to 492. That number is spot on. And I would even say that on using a consumer permission platform is 90% less cost.

Wow.

I don't even think you're giving yourself enough credit there. It's, I mean, consumer permission where the customer is getting in through the front door, the borrower is getting in through the front door rather than having to pay the data aggregators and the data brokers to go to their tolling us to go through the back door. The cost is just fractional and it's usually about 110 of the cost is what we see.

Incredible. Got a couple of people in the chat.

It's not an exaggeration at all.

Yep, yep, Jared, it's not an exaggeration at all. I love to see that. Talking about seeing that at Navy Fed. Love it. All right, so let's keep going. I'm going to start a poll right now. I like to wake everybody up with a poll. Danielle, if you don't mind putting it up there. Sorry, Josh, you're not allowed to answer. And actually I'm going to ask you not to influence the voters while they're answering. That's the one thing I've learned. If you start talking about how you feel about it, I know you can literally watch the polls get influenced live, which is kind of cool. But the question here is where do you think that, that you have the biggest opportunities to improve your operations? From, you know, this is your basic loan origination process that I've got up here. You can see from customer acquisition all the way down to post closing. So I'll give it about 30 more seconds. Yeah, well, I think actually we can call it right now. Danielle, do you mind ending the poll and sharing the results? And while Danielle's doing that, Josh, why don't you, why don't you answer the question?

So where do we think we have the biggest, biggest opportunity to improve our operations? I would say. And there's a lot of choices here, Richard. I mean, honestly, it's, it's really the, you know, it's first and foremost for us. I don't, I don't even know it's on here. It's, it's more so just driving costs down.

Right.

The cost to originate has been creeping up so extra exponentially over the last couple years, right to where, I mean, it was over $13,000. I don't even know what the number got to, to be honest. But really reducing the cost to originate is the biggest thing for us. That's going to be improving processing times, underwriting times, and then obviously making the customer experience better so you can keep those customers that when you acquire them is very, is all obviously a big important thing for us too.

Cool.

Well, let's see what other people are saying. Yeah, I mean, you see what, let's see what we got here. Yes, 79%. So when I. That doesn't shock me at all. I don't know about you, Josh, but I asked this question at a conference earlier this year and about 50 over about 50%, half the room. There's like 20 lenders in the room. About 50% said that, said that they were using a consumer permission platform, but a hundred percent said they were going to use one within a year of that, of that, that time. So, you know, it doesn't surprise me that 79% of the room right now are either using it or planning to use it.

And I would even throw in a follow up question for the ones who are saying no. Is the no because you don't have a point of sale that support it? Is the no because you have a LOS that doesn't support it or you would have to build the integration yourself. Maybe you have a custom los, you built your own. It's probably more in the technology side of things is why that's a no, I would guess rather than because it was easy as flipping a switch and it was in band or embedded in the online application flow for a Borrower. I think most people would. Would say yes, especially if it's. I mean, because every hit you get with VOIE through TRU or through a commissioner consumer permission platform saves you, I mean, it saves you hundreds of dollars from having to waterfall to the other.

Service for a loan. Yeah, for sure.

I think the no's are probably all technology related.

Well, let me just ask if anybody who answered no is listening and paying attention, please throw into the chat your reasoning, please. I'll call it out.

Straight me out if I'm wrong on that.

Yeah, yeah. We're going to move on to the next question, but there's. I think there were four people that answered no. So we'd just like to know what you were thinking when you answered no. Let's keep driving Josh on the next question here. So, all right, we're getting into the meat and potatoes here. What'd you have to do to roll out Trove? And you know, how is True as a partner through the process, so say.

Our approach to rolling out TRUV was we felt like it was just going to be an iteration of what we already do with voa. We do a lot of voa. You know, being a purchase lender, people have to have assets generally. We certainly, except for certain bond programs and VA loans to buy a home. So assets are always part of the process. So VOA we've been able to adopt broadly and widely and fairly easily and we've done a lot of work in that space over the years to really drive up adoption of that. So we felt like TRUE would be a natural iteration on that. Another consumer permission where the borrower logs into now their payroll system or their HR system to connect. We thought that would be really easy. And this is where True as a partner was fantastic. Which TRUV was very transparent in the fact that that's hard.

Right.

It is much harder to get somebody logged into their payroll system and their HR system than it is to get them logged into their bank. And TRUE was unique in this space. From, from my experience in disclosing that to you on your dashboard in truv, you can see the, from the borrowers who start the process or at least want to do it and then how many actually convert. And that conversion is what is a, is the term and the, and the metric that we should have been focusing on all along. And True pointing us in that direction not only helped us improve the TRUE rollout and drive conversion, but also helped us improve VOA conversion.

Right.

And really analyze what our partnerships in that space are doing Right. So true. Paid dividends beyond just being this particular service provider.

I love that. Well, so let's, let's be real here. This next question is.

Yeah, here we go.

Was it a success from day one? And talk to me about day one to now, like, what does that look like in terms of conversion? Because so everybody knows conversions are North Star. It's the one metric we care about the most. Of the. Of the verifications you send out, how many come successful?

Yeah, I think the advertisements we all see or the, you know, the white papers we get all talks about coverage.

Right.

Coverage is the big number. It says, oh, we have 95% coverage. We have 99 coverage. But then ask them about conversion. And uniquely, in the voie space, regardless of the vendor, it's hard conversion in the 20%. The 30% is fairly normal.

Right?

Fairly normal. And so when we. And we weren't really familiar with that, that being that hard in the voie space, and we felt like it couldn't be that much harder than logging into your bank, but apparently it was. But there were things we could do to help, and there was feedback we give to truv, and then there were things we could do to work with the gscs to maybe help drive conversion. But no, on day one, I was worried, I'll be honest, I was worried because I saw those numbers and I'm like, what are we doing wrong? Did we bet on the wrong horse here?

Right.

Did we pick the wrong partner? But because they were transparent about us, that allows them, allowed us to give them feedback and allowed us to learn and find out how could we message it better, how could we position it better in our flow, how could we drive success there? So, no, it absolutely was not a success from day one. But that was where truth shone out as far as the partnership, that's where it immediately came into play to see how is this partnership going to play out. And while it wasn't a success from day one, the partnership grew exponentially from that point on.

Yeah, yeah. And I would say conversion is incredible. That you. What? The conversion that you guys have is incredible. And looking at the difference from day one to now, it shows the work that the two companies have had together to get there. And I think really that's what it takes. Right. Because every lenders tech stack is totally different and the implementation is totally different. The training that they give their teams is totally different. We can prescribe best practices all day, but every business is unique and different. And so that's why it does take looking and obsessing over that metric. And Josh, that's one of the things I love about you specifically is that you do obsess about those numbers. And you need to. I think anybody who's, even if you're not using Truth and you're using another consumer permission platform or, or another technology, you should be obsessed about the KPIs that matter.

We got a. I saw the question come in.

Right? Yeah. You knew that was coming. Yeah.

So, yeah, the current conversion rate for us is, is about 42%, which is fantastic. You know, we wanted to, you know, from. Our goal was to get into the 40s, but getting up to 42% was fantastic for us. I mean, and think about how much that offsets in spend with that other vendor that Shaabi named. I mean, it's massive, right? When you have success at that rate for borrowers doing this up front. So you don't have to waterfall to those, those data aggregators, data brokers, you know, three letter acronyms. So yeah, it's, it's just been fantastic to get that up to 42%. But on day one, it was probably 21%, be honest, double about 100% in.

Conversion from day one.

And it was, it was partnering together through that. There were some things we could do to better message it. And also the more success you get through it, it drives more success. Because then your, your loan officers want to help the borrowers or, or, or convince the borrowers to try harder, right? To try it more and to try and they learn other workarounds or other things they have to do to help get the borrower in. So getting that number, it builds its own momentum.

Right.

As that number starts to rise, it has a positive feedback loop where the loan officers see success and they see, oh my gosh, I got pay stubs and W2s, I'm done. So it's not just about getting a voie that you can run through the GSEs. It's getting like for any loan, you're getting pay stubs and W2s right up front, you're done, like, you're done collecting income documentation. And so as soon as loan officers see that working and they're like, I don't have that condition for this. I don't have to ask for anything else. It just breeds its own success.

And other people are wondering what the conversion of the other one that shall not be named conversion is by comparison. So I love, I love people chatting in the. And I love having a live open dialogue like this.

And I think their Coverage. So I think they have a coverage number which would be somewhere around and people can correct me if I'm wrong. I think it's somewhere around 35 to 40% because it's primarily using another three letter acronym as their data source. And I think it gets about 35 to 40% of all employee. Employees are covered. US based employees are covered through that other service.

Right?

Yeah.

That's 40% coverage.

Right.

So you have a massive broader coverage with true. So coverage with true. What is your, what's your coverage?

96%.

96%. So if you can convert and then, then of that, you know, it's the amount of people that you have that want to try to do it right. That want to try to link their employment and payroll and, and the thing about VOIE that's unique is that it's always good news.

Right.

It's not linked like linking a voa. VOA can, especially in a refinance, may not have good news.

Right.

For. And a borrower would be paranoid about it. Maybe it's not relevant because they're doing a cash out refi. They don't know that. They don't want you to see that they have an overdrawn balance in their voa. But linking a VOIE is going to show they have income, it's going to show that they're, they're currently employed. It's always good news. So what we found was borrowers want to try this with us at a rate of 85% of all borrowers, try to do it. And then if you're converting 42% of those, oh my gosh, think about the massive offset that is on that other spend. It's hundreds of thousands and eventually millions of dollars.

Right.

So it's just, it's massive.

And with reps and warrants from both GSEs, IF, but here's what we're going to do. I'm going to keep this driving and I want to make sure we get a chance to wake the audience up. It's one of my favorite things to do because the audience fall asleep or get distracted. So let's run another poll. Danielle, how would you rate your operations in terms of. And don't feel like you're getting judged here, Josh, along with all the other operations leaders, but how would you rate your operations in terms of efficiency, automation and process? And you know, I've got, we have answers here. I have a fun answer I put up there like the terminator. You know, you're just, you're, you're just super efficient all the way down to Fred Flintstone. You're living back in the cave caveman days. You know, Josh, I'd ask you that question. This one I'm okay with you. You can influence the audience, if you like. How. How would you rate yourself?

Well, I. I mean, I think the audience would probably agree. It depends on the product, depends on who the investor is. You know, certain bond programs. It's gonna. It's gonna be a while, right. It's gonna take some time. It's not necessarily the most efficient. That's not always the lender's fault. I think now at this stage of the market we're at where we've all had to go through some attrition, right. And kind of weed out the poor performers. I think we're probably all at either average or above average. I would. I think everybody's comfortably going to say, I think we. You know, there's certain programs that we're the terminator on.

Right.

There's certain aspects, especially when they fall in the rep and warrant relief space. We are the terminator. Like, we crush those as far as efficiency goes, like. But everywhere else, I would say we're above average. And I'd say most lenders probably feel like they're above average in the other spaces because the. The weaker members of the team, the ones who weren't as efficient, had to go because we weren't making money.

Right.

We had to find the most efficient people. So we're all positioned with very knowledgeable, skilled people. So I would say probably above average is where most people are going to wind up.

Yeah. And. And you do have really good relationships with both. Both of the GSEs in the space, and you work with them very closely. You're actually a great partner. So let's take a look at the results here. Danielle, what are we looking at? Average? Look at everybody saying, yeah, right in the middle. It's a safe bet, right?

Yeah. I wouldn't think many people would think they're below average at this point, because, like, if. If you're below average now, like, where. Why are those people still there? No, it's been. It's been a tough market.

Right.

So I think most of us are average. Above average. I think that's fair. I think that's right on absolute.

All right, let's jump into our next question here. Can you share any, like, rough or specific success stats? This is the part, like, we talked briefly about conversion. Maybe you could talk about some of the other ones, like cost savings. Right. That's a Big one. Yeah, go ahead.

Yeah, no, I mean that's where I kind of, I kind of jumped the gun on, on this, on these stats. It's, you know, we, we had the question come in about conversion and, and getting that number up to 42% was just massive, like anything in the 40s for us. Seems like it's a very significant success. And then rep and warrant was, was not easy either in the beginning because this was new for the GSES too.

Right.

And there's been some things we've worked through with, with both you and the GSEs. Like here's, here's an example of the partnership and working with the product team at truv and how refreshing it is to work with people who know what they're doing, are capable, competent and can move quickly to say, oh my gosh, that's right, we're missing that opportunity. Let's iterate quickly. Let's evolve the product. Let's not waste any time. This is about saving money today, right? Delivering a better product today. So, you know, I'm all in on delivering a better product and you know, trying to drive things to the best they can possibly be. And one specific example I can give you is that, you know, when we initially got the true reports, it turns out that one of those three letter acronyms where most, where a lot of people's paychecks have their acronym on them, pay stubs, I should say, limits the amount of data that these credentialed providers, payroll providers, can get to to three years, right? Only three years of data that can controve get to for that particular data source, which is 35 to 40% of all U.S. employees typically. So true, being very, you know, to the letter of the law or to the by the book was like, you know, we don't have a data point there for the start date for their employment because we can't see beyond three years. So they would just leave it blank saying we don't know what date they started, so we're not going to put anything. And I'm like, hold on, hold on. From a lender perspective, we just need to know they've been there at least two years, right? And like if you know they've been there at least two years, you can see back three years and they were still employed three years ago. Just say they've been there at least three years. That's good enough for us. Like we just need to need about the last two years. I don't need to know that they started in 1987. Like that doesn't matter, right? I just need to know they started within the last two years. And then with the GSEs, you know, they were also kind of clutching their pearls that, oh my gosh, we don't have a start date, right? And so, and then push back on them like, hey, with a voa, you only have two years of history. You're deriving income, employment income from net income, right? And driving a gross income number from it. You're deriving employment based upon that and you only have two years of history. Truth can see back three years and can tell you they've been there at least three years. But then you say we can't validate employment. Like so really working with the gscs to help them see that, hey, this data actually has, it's a superset of data that you have in the voa. You have the gross income, you have the net income, you have the deductions, you have everything there. And then you can't let the start date be the disqualifying factor. When we know they've been there at least three years. That's all we care about, right? We only, we only need them there two years. So that was where we gave feedback to the TRUV team. They made changes on the report, was able to take that change to the report quickly to the GSEs and let them kind of learn and assess how they want to analyze that. And there are different stages with that, I think on either side as far as, and it's more with their, their credit, credit and risk teams, right. More so than, than their technology teams.

Well, I think that example first of all was an amazing example, I think between a lender and vendor partnership. And I also think that, you know, they're doing their jobs at the GSEs, right? Like they being risk averse, going slowly, making sure they do things right. It's definitely the way, is definitely the way they should be going. And I love the fact that for your, with the case that you just presented makes all the logical sense in the world, right? It made all the, makes all the logical sense. But getting folks to actually change tech and processes, that's the, that's a long. And getting approval and, and all of that takes a little bit longer, right?

And it, it really, it requires a willingness to go down the rabbit hole, right, From a lender perspective to take the reports, really dig into them, find out what, what disqualified them and to understand how VOA works, how, how the things like single source validation, direct deposit validation, all those things work with the gscs. And understanding how they derive that data. So really understanding that, and that's where we are. Can be a great partner to a vendor.

Right.

We, we know how all these, how the, you know, how the donuts are made in some of these cases. Right? How, how it all comes out in the end. So being able to give you guys feedback and then you listening and taking that feedback and evolving from it, that's the partnership we wanted. And we're so glad we have you as a partner.

Well, I love it. This was exactly the amount of time we had allotted for our portion of the webinar. We're right on time here. Josh, does any, if anybody has any questions, now's the time to ask them. Otherwise, we're going to call it. I'm going to tell Josh, thank you so much for, for, for getting on here and sharing with everybody, your experience, everybody. Just so you know, Josh is, I would say he's a giver. He likes giving back to the, you know, seriously, to the lending community. And you can see that he's working with us to just make this space better. So if you have questions, feel free to reach out to Josh. He's very proactive. He'll answer. You can find him on LinkedIn. Josh Byram, sorry, I'm volunteering you up here.

That's fine. No, absolutely.

But I'm impressed with you. With you. And like, you know, I think if anybody's considering or using a consumer permission platform, I would point them to Josh at any time. Go talk to Josh.

Yeah. And I would say, you know, I'm not, I don't always paint it very nice for people. Those of you who know me that are out there on this call, I can be very blunt. I can be very harsh.

Right.

On a vendor. And that's sometimes that's what it takes to get vendors to the right place. So this is not, you know, it doesn't come easy to get this kind of compliment from me. I just want to put it out there. And I think most people who know me on this call know that.

Well, we definitely know that too. Josh, I want to throw that out here. Thank you so much, man. We value so much as a partner. Thank you, Josh.

Likewise. Thank you, Richard.

Danielle, thanks for having us on.

Yeah, absolutely. Thanks, Josh. Thanks, Richard, for a wonderful discussion on partnerships between lenders and vendors.

So.

So before we all start hopping off, I just want to get your honest feedback of what you thought of today's session. So I do have our post poll evaluation questions up here. In the interim, while you're answering the questions. If you have any questions for Richard or for Josh, you can put them in the chat. And I will also have their contact information in the email that I send over to everyone with the link to this recording so that you can view it again at your own leisure. So speak now or forever hold your peace. And just keep filling out these post poll evaluation questions to let us know what you thought of today's discussion. Any any parting words, Josh or Richard?

Thanks for the time. Thanks, everybody for joining.

Thanks, everybody. Looking forward to seeing anybody who's going to be there at MBA Annual.

That's the right plug right there, Richard.

Close it. Good job, Danielle.

I got you. All right.

Thanks, everybody. Enjoy the rest of your day.

Bye.

Bye.