The first half of the Lykken on Lending program will feature our Weekly Updates. Go to our website to read more about our regulars and weekly updates!
Weekly Updates With Alice, Allen, Matt, Les, And Rob
It’s good to have you here. It’s February 21st, 2022, Presidents’ Day. Many of you are taking the day off. I got some emails in from some of you, “We’ll be tuning in through the program.” I flew out to Sarasota, Florida, to work with a client. It was cold leaving but it was pleasant coming back. To say again, this show is created by mortgage professionals. It is for mortgage professionals and we’re so grateful to have you as our audience. Our commitment is to bring you timely information.
In this episode, we have one of our favorite Floridians on the show in the Hot Topic segment, Mr. Les Parker, the Founder of TM Spotlight Newsletter, the Managing Director and Partner in Transformational Mortgage Solutions, my consulting firm. We’ll be talking about mortgage rates. Do you remember when Alex said that he writes down everything Les says because it seems to come to pass?
I want to say thank you to the Industry Syndicate. We’re grateful to be a part of that organization. They do a good job of promoting our show as well as many others out there. Check out IndustrySyndicate.com. Also, a special thank you goes out to the Mortgage Bankers Association of America. What an outstanding organization and how they serve our industry. I’m so grateful to them. One of the ways they will be out supporting us and allowing us to help support them is the Mortgage Action Alliance app. I urge you to get signed up for that. It is such an important thing. You can get signed up on your mobile device and have your word heard on the hill. It’s very effective.
Also, Finastra. I am so thrilled to have the as a long-standing part of the show. I am going to be speaking at the ICBA Regional Conference in San Antonio. I’ll be leading a panel there. They do such a good job. They have a great reach into the banking community. Also, more and more independent mortgage bankers are discovering the value of the many functions that they do extraordinarily well.
One of the things that I love most about them is their open architecture. We had Karen Jenkins in who heads up Product Development there and talked about it. We’ve got Zingo coming on who is the Vice President of the Americas. I had a chance to meet him here in Austin at their big user event. It was a great opportunity to talk to them.
Also, we’re got to talk about our two coops. We are partners with both of them. We’re grateful to have them. Lenders One and The Mortgage Collaborative do a great job of bringing competitors together, lenders and vendors. We all get to gather in a smaller, more intimate setting and we’re able to talk in more detail about the specifics of their programs. We’re in the conference season. Entering in. March 2022 is a big one. I’ll be at both of those conferences. I am looking forward to seeing you there. I hope you’ll come. Both of these are going to be well attended. I encourage you to check them out.
Also, Total Expert. I am so excited to have them as a new sponsor. They do a great job of allowing you to work and connect with your customers. I was on with their management team and I was talking to them. I’m so impressed with the methodical approach they have to their business. When you look at a technology partner, in this case, Total Expert, you have to look at the organization and how they run its business.
I can’t tell you. You’ve got to get to know them. If you don’t know them, many of you already do. They’re leaders in the marketplace but be sure to check out Total Expert. They do an outstanding job. We’re going to talk to you more about the specifics and what they do. I got them coming up as a gift here soon. Also, Knowledge Coop. Ken Perry does a great job at the mortgage coop. On April 1st, 2022, they’re releasing a new version. If you want to take a look at it, do a Google search. It’s called TryTheCoop.com. You’ll get on the list to see all the new features that are coming out and be updated on it. You need to check that out. It’s edutainment.
Also, Mobility MMI, Mortgage Market Intelligence along with Modex. They do a great job of helping you recruit. I’m finding all these new ways to help recruit. Also, support loan officers that you have already there with you. It brings you market intelligence. Snapdocs does a great job of working backwards from a future where they help everywhere in the closing business. It makes it a flawless experience. Their game is to eradicate errors from real estate transactions. That is a good goal.
Also, Lender Toolkit. Brent Emler does a great job. They are going to be out at the Mortgage ICE User Conference. They’re going to be there. They are going to be doing some things with the Lender Toolkit. They have the Bent that they have out and we’re going to be out racing some Ferraris around the track and getting together. I am excited about that. That’s coming up here at the same time as the Mortgage ICE Conference.
Also, PennyMac TPO. They’re a market leader. When you look at a company like PennyMac, they have been a leader in the correspondent space. They’re becoming a leader in the TPO space. They have already got some great traction but check out our show. We had Kimberly on November 1st, 2021. All the information’s still relevant. It’s very exciting. We’re going to be having her on again soon.
Also, DW Consulting. Debbie Wemyss does a great job of working on helping you have your story told well on LinkedIn. Check out the video that they put up on our website on the advertiser’s launcher page. Also, a special thank you goes out to Rob, Les, Alice, Allen, Matt and Jack. We’re excited to get going on this show. The Mortgage Minute, which is sponsored by the MBA with Rob Van Raaphorst. We didn’t get a recording from Rob but we do have a recording from our special guest. Les, what have you got for us?
TM Spotlight Sound Bites is brought to you by PowerSeller, making hedging easy. Market makers use Russia’s war noise to boogie with a jerk. The Ukrainian situation continues to offer volatility because energy matters. Stocks cheer at shelling and cheer with peace gestures while bonds do the opposite. The oil acts like it expects a negotiated settlement. Regardless, long-term inflation remains a hot tin roof. A substantial component of the CPI’s moonwalk is from COVID-sensitive items. The growth in inflation riddle makes the Fed do the floss. Meanwhile, mortgage rates twist. These views are my own. Know the market’s dance at TMSpotlight.com.
We don’t have Matt. He’s taking the day off. I got to give a plug to MBSLIVE.net. Matt Graham is normally here chatting with us and doing a good job. We miss Matt. I hope he’s having a great Presidents’ Day. Let’s get over to Alice Alvey with a legislative update. Alice CMB is Vice President of Education and Training at Union Home Mortgage where they are blowing, going and doing so well. Alice, it’s good to have you here.
Thanks, Dave. Happy Presidents Day, if you’re lucky to get it off. There are two quick things I wanted to give you an update on. Every year, they have to circle back and ask all of us, “Do they have their estimates right for how they consider HMDA reporting and in their calculations on what burden it is on the lenders? As I was looking at this, I thought there’s not a lot of news but maybe if you all wanted to jump in and comment on, “Does it only take 120 hours to complete an HMDA to report for the average company,” I’m pretty sure that’s a no. Maybe those smaller lenders only have a few files to report on but they’re bringing our averages way down. If anybody wants to jump out there and comment and go, “Are you nuts? This thing takes way more time than that,” we have until April 8, 2022, to do so.
Another interesting item is the USDA or the Rural Housing Service did publish the final rule. This was on the seventh and this is based on the proposed rule that had been put out there back in November of 2019. During the comment period, I found this shocking. There were only 28 comments that they received.
There weren’t huge items on the table but it was interesting to see how few people commented. At the end of the day, with their direct single-family housing loan program, the 502 and the 504 programs, there are a couple of good changes that are going to be effective on March 9th, 2022. Take a look at that. If you like the USDA, one thing is in the very low-income bucket. They are going to increase the payment ratio so it matches the other products.USDA is in the very low-income bucket, and they will increase the payment ratio. Click To Tweet
That’ll be 3341 across the board. I know that was a big item but there was always this quirky thing with one of the USDA products. They had fixed the other one where the pool didn’t disqualify the home but they’ve fixed the other one. Those will be stable. Also, up in the LTV to be able to roll in some additional rehab. You can go 5% over market value. There are several servicing changes. Those of you involved in the servicing side, check it out but it is published in the Federal Register. If you want the details, they are available. That’s my quick report for this episode, Dave, because we want to save lots of time for Les.
I appreciate you being here.
I will but I’m hanging out for Les. We got to make sure he hears about this and takes notes.
Alice, it’s good to have you. Thank you for your report. Let’s get over to Allen Pollack, who’s here with a tech update. I’m traveling to Sarasota, Florida and I’m traveling from Austin to Atlanta. Our airplane is full of all these little cheerleaders lined up at the gate. All these girls are everywhere. I get into Atlanta and every gate is full. I text Allen and say, “Allen, your daughters are in competitive cheer. Is there something going on here in Atlanta?” He says, “Yes. The second biggest event of the year is here and I’m driving there.”
It’s the second biggest of the year and there’s a total of about 55,000 people and they were at full capacity. There are these little signs that say, “Practice social distancing,” but as you look at the sign, you see an escalator with hundreds of people coming up and a walkway with hundreds of people going the other way. You’re like, “This is one of those funny pictures.” It was a giant event at full capacity. I was there. I’m sure we have readers that were probably there as well.
Most likely, they have 65,000 there. Probably a few readers were in there, in addition to yourself. What have you got for our tech update?
I have two questions for you. The first one is I read an article at Inc.com and this is a scientific investigation/survey/findings that they came up with and they said, “What is the exact amount of coffee that you should have each day?” In the last couple of years, there’s been a lot of debate about this and they said that for maximum health and brain benefits, it is three cups per day. The article has a bunch of different information but the spotlight of it is there were 676 elderly men and the coffee drinkers that had 3 cups a day had less than half of the cognitive decline as everybody else. Three cups of coffee is a magic number.
We’ve had a new client here. I’m pretty jacked up. The participants of the first call go, “Dave, can we ask you a question? How much coffee have you had?” I go, “I’m sorry about that.”
Imagine what we could do in the digital mortgage and technology side if everybody had three cups of coffee a day.
I could go on and out. We got to figure out how you’re tying this into technology.
I got an espresso at home and that’s even better. It depends on your taste buds but it is pretty good. Let’s talk about a couple of things. One is Bank of America. This is a pretty cool article. The title was, The Mortgage Industry is Continuing to Embrace Newer Technology, and that includes the banking side as well. There’s a key takeaway from the article. The first one was that Bank of America added 2 million active digital clients in 2021 breaking their annual records with a total number of verified digital users reaching 54 million.
Think about that. How many large banks are out there? Bank of America alone got 54 million beta clients for all their new kinds of progressive digital needs. They also said the clients logged into the bank’s digital platform with a record of 10.5 billion times a 15% year-over-year increase. In January 2022, they had sixteen million active Zelle® users.
Some people may not know what that is. Go ahead if you could tell what Zelle® is.
It is person-to-person. It’s a P2P payment platform. You can send money to someone else on top of the banking system. It’s not independent and your transactions are secure but you don’t have to wait for the clearinghouse like an ACH transaction. It is an independent platform. In addition to that, the last item is 24.6 million. They had 54 million users and 24.6 million Bank of America clients interacting with Erica®, an AI-driven virtual assistant 659 million times.
If you’re thinking of a chatbot, even if it has nothing to do with asking for a loan officer, asking to talk to someone, asking for hours or asking for rates, whatever it is, there were over 54 million people that signed up in 2022. There was a lot of opportunity to continue to engage, especially with the depositories that are reading this show every day.
David, getting back to something we’ve been talking about. I am talking about a Mortgage Finance Gazette article that talked about Mortgage Tech in 2022. Number four was conversational digital experience will continue to expand and grow. It’s pre-qualifying customers. Think about your roadmap, engaging with clients and drip campaigns with or without a CRM. We’ve got great partners on this show. Bank of America is doing it. We know that Flagstar is doing its accelerator program. There’s a lot of great stuff going.
I’m going to throw into comment right there on Bank of America because I’ve done a lot of research on who’s being the most effective at connecting with the new generation of Millennials entering the housing market as well as the Gen Z-ers. Hands down, Bank of America is beating you guys out there and you got to pay attention. What’s interesting about that is if you go to the website or google Millennial Disruption Index, the least loved brands by Millennials and Gen Z-ers across all vertical markets are big banks like the Bank of Americas.
They’re the least loved but they’re playing the most effective game in the mortgage space. That’s because they took the time to study what Millennials like. It’s, “Give me content. Don’t sell me. I don’t even want to know when I watched the video what institution this was related to,” other than it’s on their website and they play them all within the Bank of America website.
I’m giving this to everyone that is reading this show. A lot of people aren’t fond of the big banks but Bank of America is getting its act together when it comes to the retail side of the business and going after them. Book that down. Go take a look at it. They have six videos that are up there that I went through that answer all the questions a first-time home buyer would ever want and there’s zero selling in it. That’s a big point.
That’s a fantastic addition you made right there. Think about reading between the lines. How they’re selling and how the Millennials are going after the big banks. It’s because of the digital experience. It’s a mobile app on the TV. It’s the cashback reward on a debit card. It’s the things that Millennials think they must have and that’s what they’re taking.
Despite being the most disliked brands out there, they’re coming back and competing.
I have one last thing because I cannot wait to talk to Mr. Parker. I want to talk next time more about having active members of your board of directors for technology. Everybody’s thinking and saying, “Allen’s talking about tech companies. I am not a mortgage organization, a lender or a depository.” The depository is more, especially but think about having somebody on your board of directors that is an unbiased opinion that understands the strategy of technology and the strategy of how you can help organize and better direct your team, align with the goals and drive those goals.It’s critical to have somebody on your board of directors who is unbiased, understands the technology strategy and how you can help organize and better direct your team align with the goals and drive those goals. Click To Tweet
That is somebody critical. A lot of times, especially at certain organizations, you have somebody that starts at the bottom and they’ve worked their way up. They’ve got a preconceived notion of what you need to do. Your opinion is very biased or it’s based on maybe what you said you wanted to overcome many years ago but that may not be where the industry is now or vendors they didn’t like.
Those vendors may not be run by the same people or platforms they didn’t like. Having a technology board of directors, somebody that can help drive direction and manage security. We’ve talked about what happens when there’s a data loss or data breach. Who can help drive your technology vision? Think about that. We’ll talk about it and it’s going to be a fantastic topic.
It’s so good to have you, Allen. Great job on that. Folks, that wraps up the weekly update. We’re so grateful to have had you here for this part of the show. For those of you reading, stay right here because we’re going to get right into the rates and updates on what’s going on with mortgage rates with Les Parker. It’s good to have you with us.
We’re going to have Brent Chandler on with Kevin Kauffman. They’re from FormFree, doing some of the most innovative things and working with blockchain. You’re not going to want to miss that interview with Brent and Kevin. I am looking forward to it. Special thank you to our sponsors, Finastra, Lenders One, Mobility MMI, Modex, MBA, The Mortgage Collaborative, Snapdocs, SuccessKit, Lenders Toolkit, PennyMac, Total Expert and more coming. Have a great time. See you back here in the next episode.
- TM Spotlight Newsletter
- Transformational Mortgage Solutions
- Mortgage Bankers Association
- Mortgage Action Alliance
- Karen Jenkins – Past Episode
- Lenders One
- The Mortgage Collaborative
- Total Expert
- Knowledge Coop
- Mobility MMI
- Lender Toolkit
- Kimberly Nichols – Past Episode
- DW Consulting
- Federal Register