Lykken on Lending

[David] Let’s get over to Alan Pollack. Who’s here with us and a update on the tech update, Alan. Good to have you here.

[Allen] Great to be here, David. So a couple of interesting things.

[David] Did you notice that one comment that Bill threw out there, teed up a topic for you right away. He says, has all this technology really helped us? And I’d love to have you respond to that question.

[Allen] That’s a can of worms because some technology is absolutely needed. Exact reason why I built a pricing engine back in 2002. But then I think that there’s some technology solutions that have tried to do more than that they should. The jack of all trades and master at none and so what’s happened is, there’s this melting pot of solutions and there’s overlap and it’s actually interesting because it’s one of the things I’m going to mention today. But there’s inconsistencies between integrations and data and tech and people are buying more solutions than they need and so tech is great,  but it is also confusing. I won’t say it’s working against us yet, because I think that’s a personal opinion, but very interesting. You also bring that up, David, because there is a comment that I wrote down here. Basically this is what lenders are saying. Are you an AI solution or do you have functionality that uses AI? Stop branding yourself as an AI platform and that’s a comment that a lender sent to me last week. Not due to the program here, but I wanted to bring it up. And it’s very true. It’s just like the press releases in our industry. Everyone’s the best lead industry leading, and I get it from the vendor side. I’ve been a vendor for many years and you want to catch the eye, get the attention, create excitement, but not everyone is AI. Just because you may have a text field, that you can use AI to help. It doesn’t mean you’re an AI platform. So, I think we need to be better as vendors and we’re going to talk about that in a moment. Hopefully I answered your question, David and Marc.

[David] So let’s get into your update. Yes.

[Allen] A couple of cool things. One, I wanted to mention that Spotify. So a lot of us used to be the days of the office, but when we’re working and trying to get stuff done and not get distracted from emails, we use Spotify, YouTube music and these other things. They just came out with what they call AI playlists.  It’s going into beta or it’s in beta in the UK and Australia, but you can actually refine and create playlists off of nothing more than text prompts. So you can say, Hey, I’d love to hear some jazz music that focuses heavy on the saxophone and has so and so sound to it. And it will create a playlist for you with exactly that. So coming soon to a app near you, Spotify’s AI playlist sounds pretty cool. Those are the things, David, where AI truly is unique and can do such great things.  All right, I want to get into fraud just for one quick second, but we’ve got more exciting things to talk about. There is a finance worker. He’s at a multinational firm. Get this. He was tricked into paying 25 million to fraudsters. And this is extremely important so pay attention  using deep fake technology to pose as the company’s Chief Financial Officer. They sent this gentleman a video conference call  and in the conference call, they deep faked all the people that work at the company that they said to be on the call. And they requested for him to send the money ASAP that they were all traveling, et cetera, et cetera. There’s a big article on it. You can just Google 25 million defraudsters, but anyways, deep fake is real. You don’t think it can happen to you. They can record your voice. They can record your video. As the election period starts to heat up in the next 6 months, it’s going to become more and more, especially on social media with people not really saying things that you see, but deep fakes are a really big thing. We don’t want to see a world where we have deep fakes occurring and people are wiring their down payment money to somebody that they shouldn’t be. So, let’s be very careful. Let’s be, on our toes and let’s work with our borrowers and let’s keep them in the know by the way, the same goes with vendor payments, right? Lenders pay a lot of money to vendors. They pay upfront money. They have guaranteed contracts. So, this can happen anywhere. Now, with that being said, David, check this out in California. And they’re talking in Alice, I’m sure maybe this will be a great topic for you to touch on next week, 20 to 25 percent of residential lending. It happens in California, and what they’re talking about is a bill to give consumers the right to opt out of automated underwriting tools. I don’t even know where this would occur. A loan officer would even tell a borrower you have the option, right? A borrower wants to be qualified quick, they want to get a commitment letter out, they want to know what they can afford. Could you imagine as a lender having to manually underwrite or go down an alternative path because the state created a regulation where borrowers can opt out of automated underwriting?

[David] Yeah, we talked about that last week briefly, and it’s one of those ones where it starts a process where, we keep, could it happen? Yes. Could it come go nationwide? It’s being floated in California. It could be concerned.

[Allen] Yep. And back to your question about technology. These are areas where technology is critical to the cost and the overhead and what it actually takes to move a loan through the process. All right, David, here’s another great item. So we had the mortgage innovators conference going on this week. My good friend, Paul Gelati, I was a couple other folks put that together. It’s their third annual. They’re very excited. I think it kicks off today or tomorrow. So good luck to those folks. And there’s a good lineup of speakers. So if you’re headed out there or you’re listening to this after, I’m hopeful for the results and the feedback of being a lot of great content about how to move our industry forward.  All right. Now, David, let’s talk about Sue Woodard, from Strathmore group. So Sue posted an article on LinkedIn, and I reached out to her for permission to talk about this. So thank you, Sue. And we’re also David, you and I are coordinating to speak with her for a technology interview. But what she basically said she put this great comment out there. She said straight talk from a recent Strathmore technology group meeting.  They said to the lenders, tell us your pain points without the vendor knowing or being here. What is it you wish vendors would say? And these are great ones. Listen to this, quit telling me about your roadmap and be honest about the road you were on today. Just tell me what we can realistically expect. You ready for this one? Show me the real system, not vaporware. Then she gets into a few more. I won’t read them all. We’re going to save some for the conversation with Sue, but one or two other great ones are help me better support what I have before you try to sell me something new  and this one’s great. Oh, there’s two more. I really got to bring both of these in. There’s a bigger list. Fix existing problems before you tell me about new features. Help me help you. And then the last one I’ll bring up today is if you have to lay off employees, don’t lay off the people who know the industry.  So there’s a lot of great feedback Sue tees off a bunch of more topics as well as if you’re a technology provider. She has an article where she’s talked about going to therapy, lenders and vendors. Back, it’s funny back to the comment about, is technology hurting us or not? I think we all need to do a better job. I think we need more transparency and clarity in what we’re paying for. Places like The Mortgage Collaborative, those are fantastic places to speak to vendors and be real and open. David Kittle, you probably have had some of these similar comments and points of feedback with your technology providers, but in the end, we need to work better together, we need to try and stop as a vendor doing everything and understand that lender needs to break their risk apart. They need different options on different types of channels or loans. They it’s not a one for all in all for one. And we need to work together as an industry, especially with the costs being higher. So I’ll end on that positive note, David, we have awesome technology solutions. We have great vendors, great lenders. We just need to do better.

[David] Yeah. A lot of room for improvement. I like that one. Could you just make what’s there, what you sold me last time?

[Allen] And shout out to Sue for putting that together. We appreciate the letting us use that.

[David] She’s a good friend.  That’s a good friend. Looking forward to seeing her at the Total Expert conference later this next month. And so good. Appreciate it. Look for that interview with her.

Article about employee defrauded by $25 Million

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Allen Pollack, Chief Operating Officer, Tech Consultant

Allen Pollack, a Mortgage & Financial Services Technology Advisor, is a subject matter expert in the mortgage origination process along with software product management and software development.

In today’s financial services push to all things Digital, Allen has been helping lenders and financial services solution providers align their digital transformation and technology strategies by removing the human element of risk, and automating processes that drive efficiencies and margins into profits.

Over the course of his career, Allen has co-created and developed technology business models that have birthed highly successful, innovative solutions and companies.

Allen co-founded and served as CTO of New York Loan Exchange (NYLX), a loan product eligibility and pricing engine (PPE) that made an immediate impact on the industry, scaling the company quickly and forming partnerships with multiple mortgage and financial lending companies. In 2012, Allen was a co-founder of a merger between NYLX and Aklero Risk Analytics that created LoanLogics, A Mortgage Loan Quality and Performance Analytics company. Allen served as CTO where he continued to bring new and innovative product solutions to the market that made a significant impact to mortgage lenders that reduced risk, scaled business channels, and grew profits in a very competitive and highly regulated market.

Allen is also is mortgage and finance technology contributor on a weekly live industry podcast, Lykken on Lending, and is launching a new podcast soon to be released, TechStack Radio, dedicated to technology and innovation in Financial Services.