Lykken on Lending

The first half of the Lykken on Lending program will feature our Weekly Updates….to read more info about our regulars and weekly updates, go to our website!

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Weekly Updates With Alice, Allen, Matt, Les, And Rob

Welcome, everybody. It is good to have you with us. It’s Martin Luther King Day. It is Monday, January 17th, 2022. It is good to have you here. I want to honor Martin Luther King and what he did in the Civil Rights Movement. He did his best to right so many wrongs. We sometimes look over the headlines and go, “Did we accomplish that?” It’s something that every generation has to step up and do.

For those that are continuing the cause, it is Martin Luther King Day. It’s a good day to remind ourselves what we can do to honor him and all that he did. His I Have a Dream Speech is one of the most studied amazing speeches. One of the guys that I pay attention to who is an author and speaker is Simon Sinek. He talked about this speech. He didn’t say, “I have a plan.” He didn’t talk about other ways he could frame it up. He said, “I have a dream.” That’s so important in each of our lives when we’re looking at it as what our dreams are. If you don’t have a dream, I would suggest you’re not living to your fullest. You got to have a dream.

I had a dream that we could provide a format where we can bring mortgage bankers information. That’s why we created this show. This show is created by mortgage professionals. It is for mortgage professionals. We’re grateful to have you as our audience. Our commitment is to bring you timely information in a format that you can tune into anytime anywhere. Our Hot Topic special guest is Whitney Nelson. She is the founder and CEO of Brilliant People. I like being around brilliant people. That’s why Alice, Jack, Allen, Matt, and everyone else are on the show. I love being around brilliant people.

I love the name of her company. In this program, we’re going to be discussing the root cause of people’s problems. It’s the number one reoccurring thing that we all got to deal with. It is one of the most complex aspects of every organization. We’re going to be talking about that. We’re going to be talking about connection and community in the workplace and how important we achieve it, how important it is and what are some tools and tips. It’s one of my favorite topics. I love looking at personality. I’m looking at different communication styles, learning styles, and love languages, which are also known as the five languages of appreciation in the workplace. I love all of that. We’re focusing on aspects of people’s problems. I’m looking forward to that.

It is time to give a special thank you to our sponsors and partners. We’re partnered with IndustrySyndicate.com. I love what they do. Check out all the shows at IndustrySyndicate.com. They do a good job promoting our show. Also, check out Josh Pitts over there and what he does. I love Josh. We’re going to be doing some things together.

A special thank you to our sponsor, the Mortgage Bankers Association of America. We also have Finastra’s Fusion Mortgagebot Solutions product, experiencing the power of fully integrated solutions. I like this part of open architecture. Check out what Karen Jenkins talked about in her October 4th interview with us. It’s interesting. Closed technology or closed architecture is not a good thing. They have made a conscious decision. Maybe that’s what’s promoted them or made them become the number one FinTech company in the world. That’s what they are. They’re the number one FinTech solution company in the world. They have many solutions across banking platforms and many aspects of it. One of them is Mortgagebot Solutions. Check them out.

Also, Lenders One as well as Mortgage Collaborative. Both of these are co-ops. What do I mean by co-op? It’s where we get to gather in smaller groups and connect with our peers. It is so important as you’re looking at organizations. Are you talking to others about what you’re going through? It is so meaningful to have a membership in both of these organizations. Does that replace the Mortgage Bankers Association of America? It doesn’t replace that. What it does do is bring you together in a smaller and more intimate way so you can communicate and connect with other lenders and vendors.

Also, Insellerate. Josh Friend does a great job over at Insellerate. It helps lenders close more loans by engaging better with borrowers, prospects, and past customers. Check it out. We also had Josh on June 21st, 2021. It’s still a great episode. Go check that out. I would like to say check out Knowledge Coop. It’s a great learning management system. Ken Perry does a great job with that product. Also, Mobility MMI and Modex are both sponsors. We are grateful for our partnership with them.

Also, Snapdocs. They have an eNote solution that will make it so simple to get started with eNotes. It’s so easy to transact across many partners. Doing so, it’ll make the loans close more quickly. As we deal more with all the various phases, variations, and mutations of COVID, I’ll tell you that everything eMortgage is so important. Also, we have SuccessKit. Check out the episode that we did with Julian Lumpkin on January 10th. Check it out and what things you can do to have your customer testimonies shared on your podcasts or in your emails. We’re working with them so closely. It is so powerful. Also, Lender Toolkit. We’re so pleased to have Brent and Brett at Lender Toolkit as a partner. Also, a final thank you goes out to Rob, Les, Alice, Allen, Matt, and Jack for their contributions. Let’s get over to Rob VanRaaphorst with the MBA Mortgage Minute. Rob?

This is Rob VanRaaphorst. Welcome to the Mortgage Mortgage Minute and the latest news from the Mortgage Bankers Association. Acting FHFA director, Sandra Thompson, appeared before the Senate Banking Committee in consideration of her appointment to a full five-year term. Thompson testified that the end state of the GSEs is something that Congress would have to legislate.

She also said her focus will be on the safety and the soundness of missions Congress gave to FHFA, along with ensuring that the GSEs are providing liquidity across the nation, and especially supporting underserved markets. MBA supports Thompson’s nomination to be FHFA Director. The Senate Banking Committee must vote on her nomination before a vote by the full Senate can occur. Before I go, I want to remind you about MBA’s Servicing Solutions Conference happening February 21st through the 24th, 2022 in Orlando, Florida. To register, go to MBA.org/Conferences. That’s it for this episode. Thanks for joining me.

Thanks, Rob. I appreciate you sharing that with us. If you want to stay up on what’s going on with the MBA, download the Mortgage Action Alliance app. It’s effective in helping you hear what’s going on with their lobbying within DC and within the beltway. It’ll give you updates. You can have your voice heard as a result of that. Sign up for the Mortgage Action Alliance app in the App Store. It is also known as the MAA app. Get it and download it. Let’s get over Les Parker with a TMSpotlight and the macro view of the markets. Les?

A whole new world. The new fair market point of view. No one can tell the bears of where to go or say they are only dreaming. The bulk of inflation pressure comes from the delays in importing, producing, and manufacturing goods compounded by labor constraints. When the cost of services accelerates, that will eliminate the hope for a rapid decline in inflation. Now what? A generation that seldom saw half-point moves in price must face constant underwater locks and regular moves outside a half-point. Expect the bull to ride to the new world. Let me share this whole bear world with you. These views are my own. See a new world at TMSpotlight.com

Be sure to sign up for that newsletter. Check it out. You can put POWER in there as the code to get a free subscription to the paid version. That’s a great job on that. Gary Catrambone and he team up each week. I love that. Matt Graham is taking the day off because it is Martin Luther King Day. Way to go, Matt. Some companies are closed. Matt is not here with us because the markets are closed. I wish you well, Matt. Have a great day. I look forward to having you back.

I love the service that MBSLive.net provides you. You can sign up for it for an extended trial period and do so by going to the website MBSLive.net. When you go to the signup page, put in the code LOL and you get an extended period without a credit card required. That’s always nice. Alice Alvey is here. She’s here on her day off. Union Home is celebrating its day off. Alice is CMB vice president of education and training. There’s a lot of education at Union Home Mortgage. She’s got the legislative update. We have a lot of things to talk about. Alice, it is so good to have you here.

Thanks, Dave. It’s great to be here. There are two things I wanted to touch on. First of all, I’d like to start with Martin Luther King Day. I like to call it a day on, not a day off. Even though the markets are closed, there are a lot of events out there. I was checking around. A lot of events are closed because of COVID, but there are still a lot of virtual things going on. That means that even if something is going on in the city of Detroit, they have a whole list of events going on that are going to be virtual with great speakers.

Check the calendar. If you have kids at home, make sure that they get a chance to pay attention to how important this day is and how diversity, equity, inclusion, and belonging are so important, and what those things mean. We can help this next generation be good at those things. Check it out. There is a lot of stuff online to find. If your event has been postponed, and I know one of the concerts is postponed until June 2022, we’ll celebrate then also. I like that phrase. It’s a day to be on with the mission as Bill calls it. This day embodies the American spirit. That is how he inspired us to be on instead of off.

That’s good. That is Bill Cosgrove, the Founder of Union Home.

The second thing was making sure we touched on the Supreme Court striking down the mandate for companies with 100 people or more. Not for the hospital and medical community, but for us as mortgage bankers. We’re back to what our CEOs feel is best to keep everybody safe. Dave, do you have any thoughts on that?

It’s interesting how many people have already made the transition to virtual work staff. They’re sending most of their people out except for the essentials like the shipping department. There are some aspects of the company that you got to have everyone still there. As I’m talking to more clients, it’s like we weren’t sure how they’re going to rule, knowing that virtual staff is not subject to that regulation, if that were in fact to be the case. Thankfully, it’s not, so they went to that virtual world.

I’m of the opinion that it is something we got to get used to. That’s what has come out of COVID. Alice, when we’re getting back to normal if there is something normal anymore, what are you seeing for your company as far as the number of people that are working from home? Do you have any percentages?

We are almost 100% remote except for those types of job roles that do need to be in the office. Those are funding, certain aspects of finance, accounting, and post-closing. At the same time, it’s up to the partner. There are some physicians that are on site. Most partners have said, “Let’s work from home.” We’ve gotten very good at it. Our training was already set virtually because we’re a national company. We were already accommodating everything remotely. We were all already on laptops.

For us to go remote was very straightforward. We started in 2021 with a lot of training on leadership, but it’s a whole different ballgame managing remotely. I will say that this generation coming out of college, the Gen Zs, want remote. They want blended learning. You’re not going to fight it. If you think you’re going to get everybody in the office after all this, it’s not happening. That generation is forcing that change. We are going to be doing a lot more blended and remote working permanently going forward.

That is the standard by which we’ll be operating. It is requiring some adjustments. Some companies are bringing people in with some on a rotating basis. They bring them in so there’s still a sense of community. I love something that was said at the annual conference by Malcolm Gladwell. He said that one of the casualties of remote work is the lack of ability to pick up subliminally by observation what is a top person that’s performing well.

He watched Bob Woodward work at his desk. They all work in the sea of cubes and you put a junior next to a guy like Bob Woodward. He happened to be one of the junior guys back in his earliest days and watched Bob Woodward. He says, “That guy outworked everybody.” There was no wonder why he was so successful. That’s one of the casualties. That comes back to you, Alice. How are you guys addressing that success by observation?

It is a very big gap that we recognize right away. We have various ways of doing that. We have several mentoring programs. We have a customized mentor program for individuals who are new to the workforce. It’s their first job in an “office.” You’re working in your office from home. We do set up mentoring for them so that they can start to learn those things. We have expanded shadowing so that people can learn those things. We have different community groups to be able to expand the specific skillsets. We know that people will now have to be deliberate in offering those opportunities. It won’t happen naturally by observing what’s going on around them. It is something you have to address as a company that is forward-thinking to solve.

Weekly Updates: Expanding skill sets won’t just happen naturally by observing what’s happening around them. It is something you have to address as a company with forward-thinking solutions.

It is one of those things I got to give a lot of consideration. I want to spend a moment on the working remotely part. I have the privilege of coaching so many outstanding executives. It is one of the things I do more now than anything else. One of the people I’m having the honor to coach is Kris Ringrose of Summit Funding out in Sacramento.

She says, “Our policy is the employee has to meet certain performance standards in order for them and their supervisor to work remotely.” They’re focusing on performance. If there’s a failure in the performance, not only does the employee have to go back to the office, but the supervisor does too. Doesn’t that motivate a supervisor to make sure that this is working so they don’t get dragged back into the office because of a failure of one person? It’s interesting thinking that through.

There are different ways. I got to get more specific. I thought that was an interesting approach. It’s interesting not in a negative sense, but it is a cool way to approach it. We have to be monitoring performance. There have to be certain standards. Kids aren’t there distracting and taking away from the performance. Alice, do you have any thoughts as you wrap up your segment on what we’ve said?

I agree with the logic that it is a joint responsibility. Especially individuals who are new to working from home may not have that self-discipline. They may need some help in getting their home environment set up where it’s possible. In some cases, it’s not possible through no fault of their own. They have a small home with lots of people and lots of activity. It can be difficult for even the best partner to work from home. I agree. It is a great philosophy to hold them jointly responsible for the success.

Weekly Updates: The work-from-home setup is a joint responsibility, especially since individuals who are new to this model may not have self-discipline.

It’s interesting. I like that approach. There is a lot of thought that’s got to go into that. We had someone talk about one particular company that set up a series of videos that says, “These are the requirements to be able to work from home. Here are the requirements. You have to have a room that you can go into. They have quietness. There are boundaries for kids. How do you handle this?” There are lots of coaching around that rather than the legalistic approach. Those are good stuff, Alice. Thanks so much for being here.

I would be careful about that last comment that you made. We have to be fair. Not everybody has the financial surroundings to meet some of those requirements. We’re cognizant to make sure our assessments of that are fair and equitable based on what’s available to that partner.

That is good. I’d love to get everyone’s thoughts. Do you have anything? Send it on over. Alice, thanks for showing up on your day on and being here with us. I appreciate it. Let’s get over to Allen Pollack with the tech update. Allen?

I’ve talked about the CES show. You know how phones work. You say something and then they track you. After I made that comment, the phone I was listening to and all these weird tech things from the CES show popped up on my phone. I held on to two of them because I know you’re going to like these. The first one at the CES show, and you can buy this for $200, is the Bird Buddy feeder. It’s like a ring doorbell. It attracts birds. It takes pictures. It notifies you on your phone. You can watch birds feeding from your bird feeder live. For the bird enthusiastic person, you can get the Bird Buddy feeder.

This one is better. We talked about the cows many months ago. This one is called the Loo Too litter box. It tracks your cat’s bathroom trips. You can buy this. I don’t know the price. You can google the Loo Too litter box. It looks for irregularities and potential illnesses based on the database. It has the tracking methodology for the type of cat, the weight, and all those wonderful things. If you were worried about that, there’s a system for it.

Let’s get on to the mortgage stuff. I have a quick conversation about MLK. It’s important to note that our industry has done a good job at making sure that technology is non-biased and that it leverages the same type of rules, information, and data regardless of race, color, or kind. You name it. Unfortunately, there’s so much more for our industry to do. There’s the expansion of credit. There’s financial literacy. There’s so much more talking about all types of races and types of people. We’ve made good strides, but there is always more to do. In the heart of MLK Day, I thought that would be important to mention. The more digital we get, the less racist we get.

Let’s talk about cool stuff. The first one is cool. This is close to home. Sydney AI is a digital messaging platform. It’s an AI messaging platform that allows consumers to engage with different digital channels 24/7, 365. It’s for a bank in Ireland. What’s cool about this is it comes out of Australia. It is the same technology that our friends at FaceMe came out of.

There seems to be a hotspot for chatbot technology. Customers can engage with mortgages, bank accounts, and all those different things. For the financial institutions on the phone here, if you’re looking at doing a chatbot, it’s not just about the mortgage lending, but it’s about the total customer experience. It’s about answering questions 24/7, 365. How do I find out about the status of a mortgage? How do I apply it? Where do I find rates? Where are you located? How do I deposit a check? All of those things can be answered 24/7, 365.

That chatbot extends itself into your mortgage lending process as you continue to mature it. That’s why it’s super interesting. There is so much more in chatbots that our industry has not even uncovered yet. It’s interesting I mentioned that because it’s called observations from the FinTech Snark Tank. It says banks and credit union executives are holding a loaded gun pointed at their feet. The name of the gun is called digital transformation. Banks are diluted into believing they’re digitally transforming their organizations when all they’re doing is deploying new tools for yesterday’s industry.

It continues to say, not surprisingly, banks who think they’re only 10% or less through their digital transformation strategy have little to show for it so far, and are much further away than they think. It talks about financial institutions, but the reality is that everybody is affected by that because we have the old way of doing business, which is yesterday. We have a new way, which is today. We continue to buy all these tools. A lot of these tools are great friends of mine. We have fantastic tools in this industry. They’re fantastic innovations, but it’s bringing them all together and creating that cohesive workflow-oriented ecosystem, then implementing the chatbot to do all this other stuff.

Weekly Updates: Banks who think they’re only 10% or less through their digital transformation strategy have little to show for it so far. They are much further away than they think.

We’re much further away than we think we are. We got more work to do. There’s also something I want to mention. It was delayed by the CFPB. I don’t have the details on it. I remembered about it. I read it. There was a ruling to hold off, but it was meant to allow consumers to dictate and have ownership over the data that banks and technology lenders store. They pushed that off. There’s more to come on that as we learn more.

Get this, David. I know you’re sitting on billions of crypto. I know you’re watching the market. By the minute as we’re saying it, crypto markets could be changing. If you go to Silicon Valley, there is a two-bath and two-bedroom home that has been listed for sale in crypto cash or loan. What’s unique about it is that you have to liquidate it upfront. Some of these people do want to buy in crypto. They’ve got tons of crypto. I know other people myself that have bought in crypto. Unofficially, they’ve transferred the cash into US dollars. This gentleman is accepting it in crypto. There is going to be a lot more to come throughout the year. In Silicon Valley, you could now buy a house in crypto.

Let’s talk about the vendor we all use. It is the Equifax Work Number. What’s cool is they are now saying that all employers within 60 months can pull the prior five years of employment. You used to only be able to pull a certain amount. You can now go five years back and get all of the data that’s available, not just specific data. It is fantastic that it’s being expanded. Lots of people do that and need it, especially for repeat business and all other types of needs. That’s good.

The other thing I mentioned to the audience I promise I would talk more about is what happens in the event of a data breach and what happens. We talked quickly about the first 24 hours. We talked about stopping the data loss and isolating where it occurred. If you have to shut a system down, do so. Some of that may apply to the vendor side, but when you’re the lender, what do you do? The first thing you need to do is before that data breach, you need to make sure that you have the right type of staff and the right type of people that understand how to do this.

You have folks that you need to contact. You have to look at the local, state, and federal regulations. Each state is different sometimes based on the type of data that was exposed and how much of that data. In addition, you have to consider your systems, how many people were affected, and how exponentially larger it can get. All of those things are usually handled internally by a chief security officer, not just your CIO. That’s your CISO. You need to think immediately about a communication plan. You need to think about who you have to contact.

Sometimes, you have to contact a legal company or an insurance company. The second thing that you sometimes have to contact is a forensic auditor. That forensic auditor, you need on the phone usually with legal at the exact same time as your vendor because there are specific entities of data that you need to collect. Certain pieces of data aren’t just cut and dry as you see. Some data tells the story around what data is there. A forensic auditor is somebody that understands the data. They deal with this situation every day. That’s somebody that you need to employ immediately. Most insurance carriers will require that you hire somebody like that.

There’s a lot that goes into this topic. We probably could talk more about it. We did mention that we’ll look to bring somebody on to talk more about it. Those are the folks that you need to have. As a vendor, it’s that communication plan. Talk to your clients and make sure that you let them know that it happened, and what you’re looking at. Keep a record of everything, the data, the internal emails, and the files. All of that is important. You will get over that data breach. It does cost a lot of money but it could be a lot worse. You have to look at it as the glass half full and prevent it from ever happening again.

That’s a great point. That’s good stuff, Allen. I appreciate it very much. Thank you for the cryptocurrency. I think back to something Alice talked about months ago. She talked about cryptocurrency and some of the challenges that go with that as it relates to knowing that this is an asset that can go up and down in value rather rapidly if you close on it. There are some real dynamics in the cryptocurrency markets, especially when you look at the volatility. We’re certainly seeing the volatility. I’ll put that out there.

I love the idea of chatbots. You and I talked about this forever. I get so annoyed. If you’re going to use a chatbot, have it be regionally intelligent. I was on a website of a major company. Their chatbot came up and was asking one question. It’s like you want to slap this thing into next week. It was so annoying. Jack, do you want to jump in on this?

Going back to the markets, the domestic markets shut down, but global equity markets were generally on the rise. I want to remind everybody that Les Parker and Matt Graham have spit countless amounts of time telling us about volatility. We’re in a very volatile environment. It’s the ten-year march up over 180 and has rallied back to 177. It changed on the close. This is going to be a week of real estate re-releases.

Weekly Updates: The domestic markets shut down today, but global equity markets are generally on the rise.

We’ve got the National Home Builders Index on Tuesday. Building permits and housing starts on Wednesday, and then jobless claims and existing home sales on Thursday. One thing that I’ve been following along with Matt and Les is central banks across the globe, and the Central Bank of China has lower rates. Taking a contrarian position to a lot of Euro central banks, China went the other direction. There are a couple of reasons for that. It is the impact of the Omicron variant on their economy and this ever-looming serious concern they have with Evergrande, the realty development company over there defaulting on debt. I keep an eye on that. That’s a game-changer.

Although, the Chinese government will probably do anything and everything to keep that propped up. They’re looking at something that will rival ’07, ’08, and ‘09 here domestically. They’re looking at a similar situation in property valuation over in China. In our country, it has tentacles that will impact so many segments of China. David, turning quickly, you mentioned community. I’ll be interested in what our special guest has to say about how you create, grow, and enhance the community in a remote workplace. How do you build that and grow that when the employees are dispersed? I’ll be interested in what our special guest has to say about the community in a remote work environment.

Thanks, Jack. I appreciate it. That’s a good commentary on the market. I bet to go to you earlier in Matt’s absence, but I’m glad you got that in. Thank you so much. I appreciate that. That wraps up the weekly update on what’s going on in the mortgage industry. In the next episode, we’re going to have Cathleen Schreiner of SimpleNexus. She’s the new CEO and doing a great job. If you’ve been following SimpleNexus, it’s interesting to hear. They acquired LBA, and then SimpleNexus got acquired the week after.

There is so much going on in the M&A space. I’m looking forward to having Cathleen on. I’m wanting to focus on her leadership. When I sat at a SimpleNexus open house and got a chance to meet her, David Bolin introduced us. I was so impressed. As I was waiting my turn to go talk to her, many of her ex-employees that she used to work with came up, talked to her, and said, “How much we miss your leadership.”

You are going to want to tune in to the next episode as we’re going to be talking to Cathleen. She does a great job. We’re going to be hearing a lot more from SimpleNexus. We’re getting them as a sponsor. I’m excited about that. I want to say a special thank you to our sponsors, Finastra, Lenders One, Insellerate, MobilityMI, Modex, the MBA, Knowledge Coop, Mortgage Collaborative, Snapdocs, SuccessKit, and Lender Toolkit. I appreciate you being here. Have a great week. I look forward to having you back here in the next episode.

Important Links

• IndustrySyndicate.com
• Mortgage Bankers Association of America
• Karen Jenkins – Hot Topic: Transforming the User Experience for Borrowers
• Lenders One
• Mortgage Collaborative
• Insellerate
• Josh Friend – Hot Topic: How Customer Experience is Transforming the Borrower’s Journey
• Mobility MMI
• Modex
• Snapdocs
• SuccessKit
• Julian Lumpkin – Hot Topic: Creating and Using Testimonials
• Lender Toolkit
• MBA.org/Conferences
• Mortgage Action Alliance
• MBSLive.net
• Brilliant People
• Finastra
• Knowledge Coop
• TMSpotlight.com
• Union Home Mortgage
• Sydney AI
• SimpleNexus