Clayton Collins, CEO Housing Wire : Current State of the Markets

What's up guys? I'm here today with another episode of the Neil Home podcast. Today I have a really special guest, Clayton Collins, CEO of Housing Wire. Thanks so much for doing this, Clayton.

Thanks for having me, Neal.

Yeah, I really appreciate you taking the time. I know we were just talking before we went live here that it's just an insane time to be in the business and probably nobody would have predicted things would happen the way they've been happening. Like this was just kind of a black swan event. But you're seeing like, I mean, even on your guys website and as well as all the press and media out there right now, especially related to the industry, you're just seeing kind of negative news after negative news after negative news and it can get kind of rough. Right? Like, is that what you're kind of hearing from the, from the, from the ground level?

Yeah, I mean, I think the. Here's a common feeling of whiplash for most professionals in the mortgage industry and overall housing industry right now. I don't think it really matters where you sit or what your vantage point is. It's. You're a loan originator who keeps having products disappear and guidelines change and rates shoot up and rates fall down and rates stagnate and things are all over the place. You're a real estate agent who feels like they had this heavy pipeline of buyers who are going to buy homes, but half of them lose their jobs. Other people get skittish because of the fear of losing their jobs. Or the, or the fact that when we get into a recession, everybody's a market timer and things are going to pick up a house on the cheap once real estate prices fall, which we don't know if that's actually going to happen or if you're in title or any other appraiser or inspector and you still have to meet face to face with people or still go out to houses or figure out some workaround, whether it's a FaceTime inspection or, or a desktop appraisal, there's a lot of people getting really innovative to find solutions to these challenges that the industry is facing. But I mean, you brought up a great point before we went live here. It's all about perspective and think the housing industry has to, on a few fronts, be grateful that most of us still have employment, still have income, still have a way to get deals done and aren't completely on the sideline as many other industries and professional categories kind of find themselves in.

Yeah, it's not only that we have a job, it's that we're thriving, you know, like, for most of us who have experience in this industry. And I can't, you know, the negativity is hard to get around because if you go on Facebook and you go into any of these groups, the lending community is just, you know, it's dealing with a lot of adversity. There's changes, nobody likes change, as you know, and there's obstacles to overcome. But, like, I kind of view it as a, you know, like anytime there's been great innovation or great change, it comes through adversity. Right. It's like, because a lot of times people don't change their business until they're forced to. You know what I mean? So I'm looking at this personally within our organization and me as an individual. I'm looking at it as a catalyst to get more, like, to kind of light a fire under my ass, like, say, okay, now I need to do even more. I need to innovate even more with the clients and the client experience.

Yeah, I think that there's something. There's definitely going to be something positive that comes out of this. Not just for housing, but the whole economy is going to see technologies, innovations, changes in consumer behavior that may have not come for another 2, 5, 10 years. Just pulled to the front of the conversation and happened now and happened in 2020. And we've heard in financial services for the last 15 years that financial innovation is coming. Fintech is going to take out the incumbents. And then the conversation kind of changed. You know, fintech's going to empower us to be better professionals. But then adoption didn't really happen. And like, the message kept getting pushed, like, you need to adopt technology. You need to figure out how to serve your consumers, your borrowers, your depository clients, where they are. And a lot of people have been talking about it and some institutions have been innovating. But right now, everybody's thinking, how do I make this happen and how do I make it happen now? And the lenders, professionals across different categories in housing and across the entire economy are seeing a massive bifurcation between the people who invested in technology and we're ready to go digital, or at least ready to be agile and nimble and figure out processes, solutions that work for them and their businesses and their clients and the people who resisted. And just like COVID 19 is not impacting the country equally. There's certain pockets and there's certain people that are being impacted in a greater way. It's not impacting the business world and the economy equally. Either. And that bifurcation that I just mentioned, I think is really real. And, and it's an opportunity for folks who are nimble and agile and aren't afraid to invest in technology and change their processes and meet their consumers where they need to meet them. But it could be a death now for people who resist.

Yeah, that's a great point. We talked about this last week and you mentioned that in your organization, this is a perfect example. You said that you guys have events like this is a big part of your business. You do multiple events throughout the year and you do a lot of face to face meeting with your clients and with business partners and people that you're gonna be doing content with and all that stuff. And it's all about the relationships face to face. And initially the reaction is like, I'm gonna put things on hold. And let's see, like when the dust settles, when we could resume. But then at some point you have to realize like, look, this thing as far as control over when we could do things, when we can't do things, is completely out of our hands. So what's in our hands, what we can do. And I really kind of admire like you guys just pivoted fast and you're like, okay, we're taking these events online, we're doing them digital and we're doing them now, and we're taking these meetings and everything online and not waiting for the government to let us do things. I think that's a key point is like, are you waiting for someone to give you the green light or are you saying, okay, here's the new rules, I'm going to go, yeah.

I mean, we were fortunate that like digital is in our DNA or a digital media company. We're founded in 2008. We're never reliant on old school technology and didn't have a lot of tech debt and processes that weighed us down. So we were able to go remote and go digital very quickly. And from my vantage point, I never, I never put things on hold if they A drive will drive business value or B drive value to our audience or community. So the only things that get put on hold are things that I don't really see as value drivers. So if we're working on a project that's put on hold, it's probably because we really don't see the reason to pursue it. We push on things that we know drive value for our business, our employees and our community and audience members. So we knew that we couldn't just put our events on hold. We had a big event scheduled for June 11th in Irvine, California down in Southern California, neck of the woods. We didn't think for a second that we were canceling. We did think for a minute maybe we'll go hybrid and have some people at the physical venue and some people online. But quickly realized that we're going 100% virtual. Did a big vendor and developer eval to find the right platform to help us bring that engage experience to a digital to in a digital format. We knew when we launched this event series that we wanted to bring people together and build relationships. Our first focus and the focus of this event is mortgage origination marketing. And what we see in the housing industry is a lot of marketers kind of get cooped up in their inside of their own organization and when they go to events they're setting up a booth or setting up meetings or cocktail hours for account execs or team members and don't actually get to invest in their own craft and learn about marketing and build a network of fellow marketers across mortgage and real estate sector. And that's what we, that's we sought to build with engaged marketing and that's what we're still going to bring to our audience on June 11th in a, in a virtual format. And I'm pretty pumped. But there's still, there's still a lot of questions that's being answered and a lot of nuanced experiences that we have to figure out to drive that engagement. So it's not a, not a one way street. Like we're really anti just like yelling at the screen and not getting like some communication and feedback and building that community and giving people that, that cocktail hour experience they get when they hop on a plane and actually go to a conference. Figuring out some mechanisms and content experiences that give people that relationship, they can walk away with something a little bit more than they're going to get elsewhere.

That's awesome man. And I think that that's what's missing from a lot of conferences is like you go to these events and everything's high level. It's like here's what you should be doing, here's, you know. And I think at this point, especially in the marketing area in our industry, like people have heard over and over and over what they need to be doing, what they should be doing, what the trends are, what the consumer trends are. The part that's kind of shocking or defies logic is that despite all these clear indicators of what the consumer wants, we are very slow to adapt. Like we were the last, like, it's almost like we're like holding on to something in the past or so. I don't know what that is, but that's why I've kind of gravitated more towards the events where they're going to actually have people give you tactics on what you can be doing. Like real examples, people on the front lines that are actually doing what we're doing, you know, and kind of sharing their experience of what worked, what doesn't work. Here's what I did, you know, and you could do the same. And I think that that's more helpful to the audience now than it, you know, as far as then the typical conference experience that you get.

Yep. Yeah, that's, that's where we're really being very specific and the people we pick to speak. One of our, one of our speakers, Alec Hanson at Loan Depot. Instead of doing the generic post on LinkedIn, Hey, I'm gonna be at this conference, like, sign up, join me. He's speaking about video and he's sharing his tactics, he's sharing his tools. Like he's gonna actually go through like his, his equipment and his, his cameras and his mics and like everything. He use video content. And instead of doing that generic announcement, he made a video like, and posted on LinkedIn yesterday. And it's awesome. It was creative and innovative. And so we're going to bring, we're not doing, not going to do like 45 minute or hour long segments. They're going to be like 15, 20 minute masterclass stuff where people are actually talking about what they're doing. So hopefully we attract people that are willing to share and willing to show what they're doing, open the kimono and not be too tight knit on how they're being successful and how they're finding success for their teams. And we're finding those people to speak and we're thrilled they're gonna be there.

Yeah, and that's awesome. I would encourage, you know, the audience for a lot of my content is other fellow mortgage originators and real estate professionals. And a lot of people are reluctant, just like what you said, to share with their colleagues what they're doing because it's kind of like we're all in this closed mindset of like, if it's working for me, I don't want my, my competitor do it because then they'll get a leg up on me or, you know, and, and what I found over the last year plus of putting out content is that's not the case. I don't know, you know, it seems kind of hokey or. But good karma is actually a good business strategy. Like helping other people within the industry actually brings you more business. Because what happens is from a client perspective, they see you educating your co workers and your industry. So now you look viewed as a thought leader within the industry. And obviously as a client, I want to work with the teacher, not the student, you know, so it just generates more referrals that way. But then also, you know, it serves so many other purposes such as, you know, potential recruiting opportunities down the road or just networking with other people. You never know what those opportunities are going to lead to. And I think too many people kind of think of reasons to say no in their head before they actually look at all the upside. And the upside is like you have this little bit of downside and this massive amount of upside. So I would just encourage more people to help other people within the industry.

My analytic view of that, like sharing information, like conversation is we. One of the reasons the mortgage industry is attractive and the housing industry is attractive. A, it's huge, one of the biggest economies in the country. Two, it is super fragmented. And when you look across other sectors, let's take the auto industry for example. If we wanted to bring Ford and GM into a room and have each other share their best practices on manufacturing and marketing concepts, they probably both say, get out of here. We're not going to share our best practice with our one big market share competitor that doesn't exist in the mortgage industry. People may feel competitive and people may feel that big IMB down the street is there, they'll fight to the death to compete with them. But when you look at the data and you look at the numbers, this is one of the most fragmented markets in the economy. There are so many different mortgage lenders and nobody has double digit market share. It's actually a perfect market to share practices and kind of grow with the rising tide. Hey. And fight for some market share while you're at it. But it doesn't mean that you're up against this behemoth, monolith type competitor every single day. We just don't have that in the housing industry.

Yeah. I mean, it's so true. Even if you look at technology providers, vendors, it is just, it's all over the map, you know, and the good thing is, and you'll realize this as a professional, if once your business gets to a certain level, there is more business out here than you can handle. You know, I look at it, I give the analogy of like A buffet in Vegas. Right. So there's a buffet of business up there for us. You can only eat so much like, you know what I mean? Like, like you can keep going and every time you come up there's more food coming out, you know. So like people get this kind of closed like scarcity mindset, but they don't realize that there's enough business for everybody and in fact there's more than you can handle. And that's what you know, many of us are finding out. As you scale your business up, then it becomes like, how do I handle all this business? Because the inbound is so big, you know, and, and that's with this fragmented competition everywhere. So you know, I think that's a kind of lesson.

I feel like that's a lesson only a low rate environment can teach you. When that, when that refi business starts pouring in the door, you realize how much you can handle.

Yeah. And you wouldn't think when you're growing your business, you would never think that, like that would be a concern. You'd be like, give it all to me, I'll take everything. You know. But then you get to a point where a lot of these lenders are at capacity right now and that's what's causing a lot of the bottlenecks in the process. You've seen lenders even pull back on pricing because they can't handle the inbound. You know, we're seeing the big banks do this. For example, Wells Fargo, I'm sure you saw like for refinances on their, on their jumbo refinances. They're only going to do it for clients that have a banking relationship of 250k liquid. What do you think about this trend of the big banks? They're your best friend and they want all your business when things are going. And then now we've hit this little speed bump or big speed bump in certain markets where they're completely pulling back. Chase is saying 20% down 700 fico, very restrictive on non conforming lending. Wells Fargo on the correspondent side basically cut off jumbo lending, you know, just on a dime. They just turned that off last week. They announced no more cash out refinancing. And you're kind of seeing this like kind of shoot first, ask questions later mentality. And why do you think that is? Like why are they being so aggressive with these changes?

I feel like, I mean there's some business and competitive dynamics at play, but there's also some private public negotiations at play as well. So fhfa has obviously been extremely active in the last month as non bank servicers have faced some liquidity challenges kind of coming off some of the forbearance announcements as well as Fed buying and mortgage backed securities. There's definitely some impacts at the systemic level that are influencing who's competitive where. What really concerns me is if multiple segments of our housing ecosystem pull back at the same time and a lot of the activity that has come out of FHFA looks very favorable toward the depository institutions and almost seems to be like making bet that hey, if non banks aren't there, Chase and Citi and Wells and B of A are more than prepared to pick up the volume and kind of return to some of their kind of previous market leadership. Kind of pre financial crisis in the mortgage world in the last decade, as has happened in other decades, independent mortgage banks have picked up huge, a huge amount of market share and there's some people in D.C. and some folks in the capital markets world that love it and some people who aren't as big of fans as imbs having as much market share as they do today. And there's always going to be an exchange in value between different participants in the industry. It only really gets scary when people, when two kind of yin and yang industry constituents pull back at the same time. And if we're seeing depositories like Chase, like you mentioned and others kind of raise their borrowing standards for existing clients liquid assets, FICO scores at the same time that independent mortgage banks are facing challenges of their own. That's just not good for. We'll forget about the industry for a second. That's not good for homeowners, that's not good for people who need four walls and a roof for shelter and to raise their families. And I think ultimately it is DC's job to make sure that homeowners and borrowers have four walls and a roof. And there's some systemic things and systemic changes that have to happen in the housing industry right now to make sure that's supported for the long haul. So you started off with kind of some of the doom and gloom in the headlines and it is, there's definitely some contradiction in this industry right now. Rates are low, volume is high. We did a survey of originators last week and 99% of the originators that completed the survey are optimistic that their 2020 will be higher origination volume than 2019. So there's still a lot of optimism, a lot of that driven off of interest rates with a three handle on them. But we just need to make sure that the access to credit, both for homeowners and for the loan originators through their own institutions or the wholesale lenders that they work with is there to support that consumer demand and support the consumer balance sheet which will be our path back to a healthy economy in the United States.

Yeah, and this is a good point and it leads back to what you talked about. The, the fragmentation of the market and extreme fragmentation of the market. And I think the reason why is because there's such a wide spectrum of clientele. There's different people at different points in the process. There's this super clean client who is putting 20% down perfect credit and wants a digital experience and there's a Quicken Loans experience for that person. And then there's somebody else who may want a lot more hand holding and there's somebody else for that. And there's people at the bank that serve certain type of clientele really well and they, you know, and there's people in the non bank sector that service. So I think what needs to happen is like from the top down, like people need to realize we need, all of us are important non banks, banks, you know, online, everybody. Because we all serve different people in different communities at different points along the cycle. So like trying to eliminate or you know, crush one of these groups is not good for the, it's not good for anybody because you know, like the clients that we serve, they wouldn't be a client of a bank maybe necessarily, you know, because they had a bad experience at the bank or they wanted a higher level of service or whatever that may be, you know, so it's kind of like all of us are needed and everybody kind of has their own niche and things like that. And I think like once everybody kind of has that let's all work together mentality, it would be a lot better for the industry as a whole. I've noticed this like on the retail side people believe that they are tightening to drive more business to the retail. So obviously they're cutting off certain things on the correspondence side, but they're keeping that for the retail channel. So is that what you're seeing? Like they're trying to kind of drive the business internally and kind of help not really support their independent mortgage bankers?

Yeah, I mean if you kind of look at the, at the top level, I mean it is one of the benefits of running a multi channel lender. You can choose which channel you invest in at certain parts of an economic cycle. So I don't think we have enough evidence yet. To say that lenders are depositories are guiding capital to a certain channel in hopes of winning the long term game. It just seems like right now, just like a lot of industries are doing, mortgage industry participants are taking a hard look at how are we going to position ourselves to be as healthy financially as possible and not be a casualty of liquidity challenges or even personnel challenges. Everybody shifts remote and deals with shifting technology. We are only really six weeks or so into the United States economy going through like a massive shift.

It feels like a year.

I know it does. And I think that there's some nimble players that are, that are making quick moves to position themselves to come out even stronger. There's also a lot of players just trying to figure out how they make it to the other side. And I think as this, this crisis extends a little bit further, we'll have a lot more clarity into who's playing chess and who's playing checkers. And I just don't know if we're really there yet in terms of time and information.

And that's true because you don't realize the impact. Right. So sometimes people don't necessarily look at, okay, why are they doing this or what's the strategy behind this. For example, like on the wholesale channel, the leader for years has been United Wholesale Mortgage and they've just kind of completely backed off of business. They've pulled back on pricing to the point where the business is going elsewhere. And the wholesale community was really upset, like, hey, what are you guys doing? You've kind of abandoned us. And he's saying the head of the organization, Matt Ishbia, is saying, look, we're preparing for a huge 20, 20, 2021 second half and we need to do some things right now that are, you know, to prepare for that. And right now there's so much uncertainty that we're going to hold off a little bit. So you know, you can't blame him. He's operating his business for the long term. And I think so many of us are so transactional that like you yell at people and get pissed off when somebody does something. But you have to look at a bigger picture. Like obviously it's good if companies don't go out of business. It's good if, you know, so temporarily there's some pain. Yes, FICO score requirements are going to be higher, maybe lending tightens temporarily, but you know, like that's for the overall long term health of the industry and it does us no good if we do a bunch of loans that, you know, end up not performing well. And then all of a sudden, you know, we're dealing with the fallout six months from now, 12 months from now.

I think you're spot on there. There's all of us in our businesses. Housing Wire is a media company. Use a mortgage lender. The mortgage lenders with their realtor and title partners. Everybody relies on partners in this industry and we need our partnerships and we need our ecosystem to come out stronger and healthy on the other side. And if everybody keeps the pedal to the metal and kind of keeps pouring gas in this low rate environment, it's probably more casualties than there needs to be. So I know that the caution sometimes sucks. Like it feels like, all right, where's my partner today? And I need them. But the reality is we're in this for long haul. I'm not building a business for the next 12 months. I'm building a business for the next 12, 20, 30 years. And I hope that you're thinking about it the same way. And that's the leaders I respect in this industry have that mindset. And there's definitely are a handful, if not more than that of leaders in the mortgage industry that have nothing but utmost respect for their intelligence and strategic thinking. And I'm pretty excited to see what a few of them kind of pull out on the other side of this one.

Yeah. And I think those listening to this, if you are a individual originator or an individual real estate professional, you might be thinking, well, that's great for the big businesses. But like I got, you know, I got a, I got a mouth to feed and I got deals to close this month. But I'm telling you, like as an individual person, if you take that same longer view and you run your business thinking like, what's the bet? What's going to, what's going to be the best for my business and revenues over the long haul in a three to five year window, and not just a three to five month window, you'll see changes that occur because you'll start doing things that are better for the long term rather than this hamster wheel of like running and trying to do as much business as you can right now. Well, you know, that's the way everybody does. But I've noticed the big, the people who have kind of leveled up and have kind of really taken their business to the next level are thinking in longer term and they're doing things on the marketing side that take longer to play out. That's the problem. It's all sales and no marketing. So like that's what's going to probably be great about you guys upcoming event in June is that it's going to show people who have taken strategies that take time long term. Not just the stuff like buying leads and closing them or running ads, getting leads and closing. Like this is stuff that you do over a year and then it gives you business in perpetuity, you know. And that's the cool part about marketing versus sales.

You're spot on.

Yeah. So one of the things I wanted to go over was real quick just wrapping up was if we're talking about all these negative changes and you know, all these adversity and things like what are some of the positive things you're hearing from industry participants and people on the ground?

Yeah, I think it's different, kind of depending on where you sit in your role and where you sit in the country. Some people are inundated with more business than they had a month ago. Others are slow. And I think what's really impressive to me are the people that are kind of hitting a low point, whether it's geographic, they're in Pennsylvania or New York City and can't do deals right now. Stepping back and thinking about their business and working on their business, not in their business. I know that's a cliche term that's been used a lot, but it's something that I think is really important for business operators. And I do, I think of real estate agents, loan originators as business operators, like the same way that I run Housing Wire. I think originators have to think of themselves as running a, running a business and having a strategy for how you're building value and relationships and income for the really long term. And the people that are taking advantage of these slow spots to actually work on their business and develop marketing strategies or change out part of their technology stack or even go out and recruit a processor or loan officer assistant if the financial resources are there. Like that's what's really impressive to me right now. And those are the people that I think are really going to come out running and gunning on the other side. The people that are still very busy. It's easy that sometimes this industry really likes to celebrate the wins and do the big Facebook post or shop from the rooftops about record high origination volume. The people that are most impressive me right now and that I think everybody should follow their lead on are able to navigate this period of success with humility. And I think it's really important for the peers that you do business with and for your consumers not to feel like this low rate environment is some amazing, amazing gift that's been bestowed on you and you're making it killing while other people are furloughed. I think it's really important to navigate this part of the economy with humility and still take your wins, bring home income, support your family, put some money in the bank, plan for the future. But be humble.

Yeah, that's huge. So many, you know, it comes off as really off putting when there's so many people struggling. And then you got this guy, you know, talking about record months and record income and things like that. Just, it doesn't play well. And I don't, I think so many times we're caught up in our own little world, especially now, right? Because you can't even go anywhere. So you're like, for us, we're either at the office or we're at home and this is all we know. But you just kind of have to have that mindset. Like there are a lot of people who aren't busy right now who have nothing to do, who don't know what to do, who don't know when they can go back to work, don't know if there's going to be a workplace to go back to. And just be mindful of that when you're posting content. I've noticed this from a lending and sales perspective. If you just think about it, this will work for exactly what you said and it will work in any environment. But if you're thinking about like what I should be posting, what I shouldn't be posting, just take the simple test of like, if I'm the viewer, what's in this for me? Like, what would I get from this? And it's okay if it's entertainment, it's okay if it's a laugh, it's okay if it's information. But there has to be something that the viewer is going to get from this. And when you post production records to, for the high fives and all that, like it's not, I mean, for the viewer, there's not much there for them, right. They're not going to get anything of value from that post. So I think like, if you think about that, it'll kind of change the way you look at when you post. Because I think the way people act during a time like this kind of really gets remembered. It cements in the consumer's mind, you know, like there's people that are stepping up and then there's people that have disappeared, you know. And I think people will remember that for the Months and years after this.

I was at a big depository bank in 2007 through 2010. And some of the quotes that I heard internally and externally are quotes that they'll never, never leave my mind in positive and negative and negative ways. So when you're going through a time of crisis, it's important to remember that people will remember how you act and behave and what you say.

Yes, for sure. And just to wrap up Clayton on the event so we can let everybody know who sees and listens to this, can you tell us when's the event and how can they sign up?

Yeah. So the event, Engage Marketing2020 coming to you in your home, office, or wherever we can find you. You can sign up on housingwire.com engage and we're doing a little blitz right now and trying to bring in some more lenders in this early stage. We're like, in week two of really our marketing push. So I'll share a promo code with Neil so you guys can get hooked up with a free registration.

Okay, awesome. Yeah, so when I post this, guys, I'll link that below. And thanks so much for doing this, Clayton. I really appreciate your awesome, man.

Thank you for having me.

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