Candid CRM is the only mortgage platform built for the Modern Loan Generator to help structure, manage, and grow businesses. In this episode, Garett Locklear, the founder of the Locklear Lending Team, explains why Candid CRM is the next-generation mortgage platform. Everything seems to have a base philosophy under any existing system, and Candid focuses singularly on the loan originator. Because of the user’s return exponentially over time, Candid has become a more valuable platform today. Tune in to this episode and learn more about this great technology!
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I’m excited to have Garrett Locklear here with me. Not only is he a top originator and a leader in our industry, but the guy is really innovative in how he approaches the business in his processes, but also some technology he is creating. You are going to get in on the ground floor, listeners, of some exciting things that you are going to be hearing a lot about in the future. Garrett Locklear, it’s good to have you here with me. I appreciate you.
Thank you, David. It’s an honor to be on your show. Let me say before we start, not just for me but for many others in our industry that you have mentored and guided along their journey over the years. Thank you for being one of the key ambassadors for our industry. It’s affected my life and so many others.
That’s exciting. Thank you so much. I appreciate that. There’s one expression I heard a long time ago when a speaker was given a kind word. He says, “It makes you feel like a baby who wet his diaper. It doesn’t show much on the outside, but it makes a warm feeling all over on the insides.”
If you need to take a break, it’s fine.
That’s all right. Listeners, every time we get on the phone with Garrett, it’s always fun. Our listeners need to get to know you, Garrett. Tell us a little bit about yourself, how long you have been in the industry, and I’m also interested in what drew you into the industry.
I moved to Nashville years ago. I wanted to be a songwriter, a musician, and an artist, the whole deal. I got to do a lot of cool stuff. I got to play on some records and perform with some artists that I admire. I will never forget, I was at a friend’s house one night. I bumped into their coffee table and nearly knocked off the table their Grammy Award for Song of the Year. This is a true story. Thank God I didn’t break it, but he told me something that shifted my focus. He said, “Garrett, you can be a musician or you can grow up, but you can’t do both.” I was like, “I get that.” I was at a crossroads, and it wasn’t long after that but the music thing had run into the course. A few years ago is when the mortgage industry found me.
How did it find you? Thank God it did.
My dad has spent a good 20 or 30 years at the crossroads of applied mathematics in nuclear engineering. He is a very smart guy. A friend who knew my dad was like, “You are probably not as smart as your dad, but you are good with people. Hopefully, you’ve got some math skills. Why don’t you try out this new job over here?” Before you knew it, I was cold-calling internet leads for a mortgage company.
That’s hard.
It was terrible, but you learn a lot and you learn a lot by failing. It took me a good two years to get the hang of how to write a mortgage.
It’s interesting how you got in and how you got started. You started at one of the more difficult places, but what caused you to stay in this industry? One of the tougher ways to start in the industry is many washouts. What’s kept you in?
I would say it’s purpose. There are three things that you need in our industry and a lot of industries. You need the right people around you. You need an amazing team. You need a process or system, something that you can anchor your business and your team to, and you need purpose. The purpose is what’s going to keep you around when times are tough. That’s a good application now. There will be times and days, weeks, and sometimes there will be months. The purpose brings clarity and focus in those moments, and pulls you through.
That is a great way to put it, which almost goes hand-in-hand with the next question. What makes you so successful? You have been outrageously successful. Give us some of the metrics because people need to know this. It’s unusual.
It has been a fun journey. It took me a good two years to figure out how to write a mortgage or to spell it. In the last six years, my personal origination business has gone from $6 million a year to $250 million a year.
Just yours?
Just mine. There are no other loan originators on the team. It’s me and a team of awesome people who helped me out.
What is the key to that? I know you talked about the process, which is getting into the heart of what we are going to be talking about. It’s some technology that you created. At the core of that, you are a student of the process. Was it your dad’s educational background that brought you to this?
A little bit. He has got a mathematics background. I also enjoy getting to know people. When you talk to a client, you are learning their story. It’s an interesting mix of being great at math, but also being intrigued with serving people, hearing their stories, and how you can help to be part of that story.
I think that’s one of the reasons that draw and have kept me in this industry is how we can make such a difference in people’s lives. The nice thing about doing mortgage loans, there are no two stories that are alike. Like a fingerprint or an iris on your eye, every one of them is uniquely different, and it is something intriguing.
One of the things that is a good part of your story and in my story, in our story, is how you found me. You used to work at Movement Mortgage, and you admired Casey and what he had built, the values upon what you’ve built on that, and he watched a video. Share a little bit about that. I’m excited about this part of the story because it’s what builds off of it. When you have an impact on someone’s life, it’s like a domino effect that goes out in so many directions.
It’s no secret. You were the guy. You were one of the key figures in helping Casey Crawford start Movement Mortgage, which is now top ten. It’s a massive company. I spent a lot of my years at Movement. I spent the first eight years at Movement. That’s when I first heard your name, then I started listening to your podcasts from time to time, and I got a ton of value. When I needed one of the top consultant center industry, I called you, and thank goodness, you answered.
I’m glad I did because what you are really about is that you have the potential to transform the way business has been done. One of the things that I tell a story a lot about that made a difference was the time someone was coming to fire me because I wasn’t good at doing certain aspects of the business. They didn’t focus on the fact that I was a top producer. They focused on what I couldn’t do. They didn’t focus on what I could do.
We always need to know what our strengths are, but it’s more important that we know what our weaknesses are and build around those weaknesses. You have built something in a product that I am very excited about. What is the name of the product? I will let you tell everybody. What brought this product about? Why did you create this?
The product’s name is Candid. I describe it as a next-generation mortgage platform. It provides everything a loan originator needs outside of their LOS to structure, manage, and scale their business. The why is pretty simple. I was purely frustrated. Years ago, I was originating about $6 million a year in business, a respectful number. I knew I wanted to grow. To do that, I needed something more than a spreadsheet.
I had spent nearly six months, maybe too much time, looking at dozens of systems, CRMs, and platforms like the whole thing, inside the mortgage industry, outside the mortgage industry. At the end of the six months, I remember being more frustrated than when I begin because everything I saw did one thing pretty well, but nothing did everything with excellence. How I got started, I made the decision to build my own platform so that myself and my team could deliver at scale the best home financing experience we could to every single client that we served.
To be honest, I didn’t think about anyone else but our team. I wasn’t building it for anyone but our team. Something crazy happened. We were building it. We were doing well. The volume kept growing and doubling. Other loan originators started asking like, “What are you doing? What are you using?” My answer was simple every time, “I’m using this LOS, and I’m using our platform.” That’s it.
I will never forget, I was at President’s Club, the celebration, top producer’s thing. I was on a Caribbean Island. I forgot which one. One night after dinner, a slightly tipsy, top-producing loan originator came up and was like, “Garrett, I heard you have a system. I want it, and I will pay you for it.” Literally, just like that, Candid was born.
What’s so interesting is your approach to this. It is created by someone who has been doing this for a long time, and you have created some unique features about this. Talk about the design. What’s gone into the design and the functionality? That’s the key.
A lot of it has to do with perspective. At this point, I’ve originated over $1 billion in mortgages, which is crazy to say. From those lessons, from the day in and day out of what it’s like to be an originator, comes a great perspective. How we build the system, how we built it, and continue to build it is using those experiences, using the frustration, and knowing there’s probably a solution technology-wise that could solve this problem, that could make this experience better for our client, that could make this experience better for our referral partners. Day-by-day, month-by-month, year-over-year, that’s how we approach building out the platform.
I want to talk about some of the features and the benefits of this. It’s almost like doing a virtual demonstration of this product. I want to go back to that conversation you had at that President’s Club, when you are off at one of the many Caribbean Islands you guys all go to for these events. That’s not so bad that you got a chance to go. There’s a big part that I want to highlight there. A top producer wasn’t insecure and jealous. This is a key that not enough producers are doing, “What is it that’s making you so successful?” Rather than coming up saying, “I’m successful. Why do you think you are so successful?”
There is that kind of hunger to learn. Patrick Lencioni only talks about hungry, humble, and smart. It’s hungry to learn, humble enough to ask each other, and being able to reach past your pride going, “Garrett, you guys are doing well.” I want to highlight that because whoever that loan officer was, which birthed Candid, should be credited. A lot of people have too many egos that are in the way of their own potential further future success. I want to compliment that person. Thank them because it launched Candid. What I want to do is give everyone a little bit of a virtual demonstration. Tease them with what this can do so they are going to want to get on a demonstration and take a look at your product.
There’s a ton to cover in that question, but looking ahead, in the next 6, 12 months, there’s going to be a refi wave. That’s something that could if you point it out.
Encouraging for you to say. Are you sure? When is this recording for? This must recorded a few years back. No, this is being recorded as we head into October 2022, so we are right there.
Our industry is extremely cyclical. It’s not a matter of if. It’s a matter of when. With the last refi wave, we’ve got incredible results from Candid’s ability to analyze our entire client database and be able to successfully identify refinance opportunities. Not the rate term but also, “You should probably look into refinancing from FHA to conventional. This is a great cash-out refinance opportunity because of your growing debt.”
It has incredible algorithms that look into that, but not only that. It also will go ahead and reach out to the client for us. It will text and email them with dynamic marketing to talk about, “Your rate was this when you purchased your home on this date. We feel like you have a great opportunity to refinance. Let me know if you want some more information.” We’ve got an amazing response from that. In 2021, $83 million of our volume came from that. It’s fully automated.
The best part is at scale. Now, we have 2,000 and 3,000 past clients. For me to hire 10 people to call them would take a lot of time. As you know, we are all experiencing rates that come and go quite quickly. We can have direct access to our clients and contact them in a natural way using natural methods, but we do it through automation and at scale. That’s one of the key features.
One huge benefit and a struggle that loan originators will always have as they continue to do more business is structure, having a structure for your team. From the perspective of a prospect to a client and then from a client to a closed deal, a loan originator has to have structure and a process to build their entire business around in order to deliver consistency at scale. Having your whole team tied into the platform has allowed us to do that, and be able to scale and serve more clients with the same amount of people on our team.
[bctt tweet=”A loan originator must have structure and a process to build their entire business around to deliver consistency at scale.” via=”no”]
There’s got to be more to the system than what you’ve already talked about. Give us another example that gets you excited about this product.
Client retention. This is one of the biggest problems in our industry. By all the stats that we are looking at, we don’t do a great job of retaining our clients. In 2021’s numbers, it costs somewhere between $1,500 and $3,000 to acquire a new client. That was in 2021. It’s even more expensive this year 2022. For Candid users, it’s 1/10th that to retain a client.
The industry average client retention rate is somewhere between 7% and 12%, depending on who you ask. With Candid’s client retention engine, we are at 42% with retaining our past clients when they need to refinance or are ready to purchase again. The client retention, what happens after closing? The fully automated process that Candid has built is wildly successful. I would point to that it is one of the main reasons for my volume going from $6 million to $250 million.
A lot of people say, “You are talking about volume levels that were at some of the best, most epic times of our industry.” How are you doing now in this market? Are you finding yourself still able to produce solid volumes with Candid?
In 2021, $250 million. In 2022, we will cross over $200 million, but we won’t make it to $250 million. We are going to be down about 16% to 18%.
That’s amazing in itself.
It’s a massive win. In 2021, I believe it was 43% of our volume was refied. We were able this year 2022 to replace 15%, 18%, 20%, 22% of that with new purchase clients, whether it’s an existing client coming back for a new transaction or a new client who’s referred to us from one of our real estate agent partners.
How does this work with the real estate agent partners? What aspects of your system helped and improved that relationship?
When we talk about client retention, we aren’t just talking about clients. We are also talking about the referral partner. They are part of our team, not only during a transaction, but years after as we are continuously staying in front of clients. We also co-market with the referral partners as well. We are not just retaining clients and helping them with their next transaction, but we are showing our referral partners year-over-year, “If you use our team and our team using Candid, then this is the experience that we offer for not just this one client that we serve, but for every client that we are able to serve.”
When you are looking at this interest rate environment, how are you finding yourself to be able to compete and have only been off that little in your volume? What are the keys to your success? Getting away from Candid maybe, but I don’t think so. Candid has been a big part of that.
I would tie the two together. We have a great reputation in our marketplace. That reputation comes from being very consistent, always delivering a great experience for our clients and our referral partners. That consistency comes from Candid. When one of our referral partners received what we call a listing opportunity alert, I hadn’t closed a transaction with them in a few years. I picked up the phone, and I called them. I said, “I wanted to make sure you saw that listing opportunity alert for so and so.” After a five-minute conversation, right before hanging up the phone, they said, “I need to be sending you more clients.” It’s referral partner by referral partner, one by one, serving them well, serving our clients well. That gives us the results that we are experiencing now.
A lot of people would say, “It sounds like this is a relatively new technology, so why would we want to step in and start using this when there are many mature systems out there?” What would you say to that person?
There is a ton of systems out there. If I’m listening to a mortgage podcast and the word technology isn’t said, then it’s weird. We are constantly talking about technology. I would position Candid as the next generation of platforms. It’s directly positioned to loan originators who are looking to grow and scale.
Everything seems to have a base philosophy under any system that exists. What would you say is the philosophy underpinning or is the foundation under Candid?
We have a singular focus. The Candid’s singular focus is the loan originator. How can we empower loan originators to serve their clients and their referral partners with excellence? It’s a bigger deal than you think. Candid has no outside investment dollars. When are we thinking about, “What do we need to be doing next? What do we need to build next?” It’s not about ROI. It’s about how can we make the most impact for our users, which are the loan originators.
[bctt tweet=”When we’re thinking about what we need to do next, what we need to build next, it’s not about ROI. It’s about how we can make the most impact on our users, the loan originators.” via=”no”]
Take us back to that President’s dinner. If we were to do that conversation now and you were to describe the system, how would you describe it in a linear function, in a manner in which what do you touch at each stage along the way? When does Candid start and when does it stop?
Candid begins with the first time that you interact with a new client. It’s going to help your conversion rate by managing all of those clients who are calling in and asking for your help. From there, you want to take that client and walk with them down the road of what it looks like to achieve their goal. Maybe they are buying their first home or investment property. Maybe they are looking to refinance, but it’s going to walk with them and walk with you through that process.
Let’s say it’s for an investment property purchase. The content that Candid is going to deliver to your client and referral partner is going to look completely different than if it were a first-time home buyer. It speaks the language of your client and meets them where they are at. From there, the next part of the process is from when they are under contract to when they are ready to close on the home.
From there, the same story. It’s going to keep dozens of people involved in that transaction in the loop to create the most fluid and consistent experience that you can. If you think about a transaction, you’ve got a listing agent, a buyer’s agent. They probably have assistance. You have homeowners insurance, CPAs, and financial planners. You’ve got your internal team, assistance and processors, and loan partners.
Everyone that I mentioned would be communicated through Candid by the clicking of one button. By being able to communicate with twelve different people in one transaction and deliver the same consistent experience every time, it allows you to do 5, 10, 20, and 100 transactions the same way as you would one.
The last part of your question was, “When does it end?” I would say it doesn’t ever end because after closing, that’s when things get going. We are staying in front of every client through a variety of what I would call client retention efforts right after they close until years and years after closing. That’s things like automating an annual mortgage review and in taking that data and being able to analyze it with automation and respond to it.
That’s delivering in their actual mailbox, the handwritten card in a handwritten envelope. That’s delivering to your referral partners about updates on where the client is in their house life cycle and things of that nature. It’s never going to deliver what I would consider junk mail like, “Here are my top five favorite restaurants.” It always delivers incredibly high-value content and information to the client and the referral partner. It does it consistently year-over-year until that client is ready to use you again.
It sounds like a powerful system. How have you positioned this in the market from a cost standpoint?
On pricing, Candid doesn’t able lenders to consolidate and replace 6 to 10 of the traditional service providers found in today’s mortgages tech stack. Not only consolidate but enhance, but because of that, we have been able to position Candid’s pricing to save lenders 20% to 30% of their current direct technology cost. I said direct intentionally because there’s also an indirect cost in frustration that sometimes exceeds the direct cost of maintaining the mortgage technology stack, which Candid nearly fully eliminate.
I would like to have you back on the show. I would like to get some of the users that you have that are using this to help tell this story. It’s a great story. I love the fact that you are a successful loan originator and that you saw an opportunity. You took the time to study everything that was out there. You go, “I’m going to have to create my own product for this to meet my needs.” I love the innovation and creativity. It has been a joy to have you on the show. I love working with you.
As a full disclosure, I work with Garrett. One of the values of having this show and the best audience that we do have is to share ideas like this. It’s best practices. Looking at the attitudes of a top originator. These are the things that get me excited when I meet the next generation of top performers coming into this industry. Garrett, I’m excited to see you in the industry. You are a veteran now at this point. You look like you are young at this point compared to an old guy like me. I congratulate you on your success, and what you are bringing to this next generation of loan originators and mortgage professionals. Thank you.
Thank you, David. It has been an honor.
It has been an honor to have you on, and we are going to have you back because this is a story that has just begun. Listeners, this story is just beginning. You are going to check out now where you can learn more about this and get ahold of Garrett. Don’t call him to recruit him. He’s on his own. He’s doing well. Call him to learn more about Candid. We will talk to you later. Garrett, thanks so much for being here. I appreciate it.
You are welcome.
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About Garrett Locklear
Garrett Locklear, Founder of the Locklear Lending Team and Founder of Candid, is a highly confident technological systems and processes specialist intent on an endless pursuit of perfecting the home buying experience. He focuses on providing trusted and experienced home-financing guidance to home buyers and homeowners. Subtle, super-dry humor is a fantastic pairing with his serious side, and he is passionate about serving others as they make the most important purchase of their lives.
Garrett was introduced to the mortgage industry by accident. He started as a Marketing Specialist by cold calling internet leads for other Loan officers. To a self-professed systems and processes nerd, the void of modern-day technological solutions correctly applied to enhance the mortgage origination process revealed an opportunity where the sky was the limit.
The Locklear Lending Team was formed in August of 2014 with a “relentless and tireless focus on providing an incredible and scalable home financing experience. Relationships are at the center of his business and philosophy. Sixty percent of their business comes from referral partners, most of whom are Realtors, and 40% are from past clients. Garrett had always been fascinated by the interplay between technology and interpersonal relationships, and the desire was to use technology to enhance, not replace relationships. Buying a home is a relational and emotional process, and he wanted technology to assist. They’ve been able to bridge the two better than most, and the proof is in the results.
The first two years of Garrett’s Loan Officer career were spent with a Google spreadsheet. As volume grew, it became apparent that a more robust platform was needed to better serve his clients. Garrett reviewed and demoed nearly three dozen systems and platforms inside and outside the mortgage space, from the big players all the way down to the ones that were mortgage-specific. After nearly six months of research, the result was disappointment and exhaustion with what existed. Garrett concluded his choice was either to lower his bar and provide an average technology experience to his clients and referral partner or build his own.
The deficiencies of the existing platforms can be broken down into two categories. One category is a CRM for the mortgage space created with the executive suite in mind. While that may be helpful to sell, executives don’t originate mortgages. There was a massive disconnect between what a loan officer needed versus selling a platform to executives. The second category was systems built for loan officers, not by loan officers. Unless you are walking in the shoes of a loan officer daily, it’s basically impossible to create a platform that will help their world.
Over five years, with a meticulous and grueling, day-by-day, week-by-week, month-by-month agile development process, Garrett identified the friction points for himself as a Loan Officer, his referral partners, and clients and built technology solutions to address each. As a result, and over the course of eight years, Garrett’s volume grew from an industry average of $7 million a year to $250 million a year. With every $25 million, there were new hurdles to face, and Candid was built with that journey as the backbone. With each problem that arose, he found a way to overcome it and scale it. While he made it for himself and his team, he does sell it to the market. Other vendors do the same thing, but no other platform is as expansive or dives as deep into these issues and the struggle of a Loan Officer’s path to offer solutions. Today, Candid is home to high-end Loan Originators with $5 Billion of volume annually on the platform.
Garrett’s dream is to provide an incredible home buying experience to his client and referral partners, then to pass the very tools he’s developed and successfully tested on to other Loan Officers so they can do the same. He desires to grow to do more volume without losing the experience for the homebuyer, referral partner, or at the detriment to the Loan Officer’s life away from work.
Garrett is proof all are possible.