Lykken on Lending

Buying and selling a home can be exciting and stressful. It’s a different experience every time. And who you work with plays an important role in how smooth and fast the process is going to take. On the show today, David Lykken and co-host Jack Nunnery are joined by Jeremy Foster, Chandra Srivastava, Jim Black, and Aaron Kirchner—a team of collaborative professionals who are here to talk about Calque and how its unique product model allows lenders and realtors to work in a more efficient capacity while providing homeowners a custom solution that enables them to make offers and buy and move into a new home before they sell their current one. Tune in and find out more about the buy-first solution.

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Calque, Inc: The Homeowner’s Buy First Solution With Jeremy Foster, Chandra Srivastava, Jim Black, Aaron Kirchner, And Jack Nunnery

I’m excited to have this episode because we’re always talking about innovation in this show. We’re looking for innovative ideas that help you, the lender, to be successful in the marketplace. We’re all needing more tools in our toolkit. I’m excited to have joining us on this episode, our group from a company called Calque and others that are affiliated with them in some way, shape, or form. We’re getting excited about this. Let’s get started with each one of the introductions. Let’s start with you, Chandra. If you could introduce yourself to our audience. Tell us a little bit about yourself and your background.

Thanks for the introduction, David. I’m Chandra Srivastava. I am Head of Marketing at Calque. I have a background in marketing communications and industry. I went and got my Ph.D. in marketing strategy at the University of Texas. It was a fun experience and now I’m working on our digital and other marketing efforts at Calque.

Also joining us is Jim Black from Northern California. Jim, it’s good to have you on the show. Tell our audience a little bit about yourself.

Thanks for having me on. I appreciate being here. My name is Jim Black. I’m the Chief Lending Officer of InstaMortgage. We are an independent mortgage bank. It’s privately owned and we’re in 27 states. I’m a proud partner at Calque and I’m looking forward to being on this show.

Also joining us is Aaron Kirchner. Aaron, it’s good to have you on the show. Tell us a little bit about yourself.

 

 

Thanks, David. I appreciate it. It’s an honor to be on your show. I’m Aaron Kirchner. I’m a Broker/Partner with Calque, but I’ve been in the industry for over 27 years. I’m an entrepreneur. I own several real estate companies. We have luxury homes in Tennessee and soon-to-be in Texas and Florida.

Jeremy Foster is here. Jeremy has been a longstanding friend and I admire him for many reasons. Jeremy, tell our audience a little bit about yourself.

I’m Jeremy Foster. I’ve got twenty-plus years of experience in banking and financial technology. I was a CFO for a big FinTech 100 firm called Kasasa that was focused on helping community banks and credit unions compete against mega banks. I was CFO of a startup that has grown pretty successfully in the space called Homeward. I’m excited to be part of the Calque team.

We’re excited to have you here. Jim, let’s start with you. Can you discuss a little bit about what you’re seeing as trends that you’re seeing in the current purchase marketplace?

Right now, I have a pretty good sample across the country, being in 27 different states and markets. We are seeing higher interest rates. We are towards the end of 2022 and we’ve seen rates almost double in the past 120 days or so. With that interest rate increase, affordability has gone down by about 25% for most consumers who need financing.

That has been a challenge for people that were looking to buy with lower inventory towards the beginning of the year. Now, we’re seeing an increase in supply, which should helpfully smooth out some of those situations that people could not afford. What we’re seeing with that, coupled with inflation and some uncertainties in the economy, is the fact that it might take longer for homes to sell.

We’re trying to find innovative products that allow someone to be able to move or be comfortable with their move prior to selling or moving where they currently live. We’re seeing things like contingent contracts, seller financing, or bridge loans be more popular. Unfortunately, a lot of those are a little bit more complex and more expensive for the consumer. We see a lot of different innovations happening through property tech that are disruptors. Some tools are very helpful to the consumer. Some tools, we’re finding out, are a lot more expensive and less optimistic and right for the consumer.

It’s important to know and do your homework on the various tools and how it impacts the consumer. Let’s go over to your Chandra because you look at how the market is and how consumers are impacted by this. How does Calque benefit the average consumer? Is there a specific consumer you impact?

That’s a great question. Calque is built specifically for homeowners who are looking to buy and move into a new home. I would like to step back and say that our trade and mortgage were designed for people and consumers to have the best experience possible. The process wasn’t optimized for them before. It was optimized for other parties like lenders and risk mitigation, but this is really for consumers. We help at so many points in the purchase process that I like to break it out into two buckets.

The first bucket that we help with is we have created a process that is so much simpler, easier and far less stressful for someone who owns a home trying to buy and move into a new home. The way we do this is that consumers can have the equity in their current home to buy their next home before they sell. Anyone who has gone through this process knows that it can help in a number of ways. One, you’re able to put non-contingent offers on a new home. That means you’re four times more likely to get that offer accepted. You then get to move your family into that new home. Once you’re out of the house, then your real estate agent can help you repair and stage it.

You don’t have to try to schedule a Zoom meeting, have your kids at home, and have the house showing. It’s way less stressful for consumers. The other big way we help is on the financial front. Calque, compared to other buy-first solutions that are out there like Knock, Orchard or Opendoor, enables consumers to have the benefits or the buy-first experience for a fraction of the cost. Compared to other companies we’ve seen, they have consumers willing to pay sometimes $15,000 to about $40,000 to go from a $300,000 to a $400,000 house. We are able to help them do that for about $6,700. It’s a big cost saving there for them.

I love to have you expand on the buy before you sell concept because that’s the space you’re in. You mentioned several other competitors. We don’t have to get into them other than the fact that you’re better, faster, and cheaper. It sounds like that’s what you’re talking about, Chandra, right?

Buy-before-you-sell solutions allow you to buy your new home, move in, and then get to sell your old home. Share on X

Yeah. I guess we’ve been in this space so long that buy before you sell is all I can talk about. I’ll take a step back.

Help our readers connect with what we are talking about when you say the concept of buy before you sell, but you raced through that pretty quickly. I want to make sure we anchor that with our readers.

The traditional process for a lot of homeowners who are currently in a house is they either have to sell their house, move into a short-term rental or couch-surf with a friend and then start looking for their new home. You have no idea how long you’re going to be in that rental and how much it’s going to cost. You also run the risk of being homeless on the market if you can’t get a new home. Buy before you sell solutions allow you to buy your new home, move in, and then you get to sell your old home.

 

We have competitors who are doing it in different ways. In other models, it often involves purchasing and selling one of those homes twice, so they pass on a lot of duplicate closing costs. We don’t do that. We’ve created a process that fixes the loan underwriting process. We offer a lot of the same benefits. You get to buy before you sell but that’s how we’re able to do it more efficiently.

Calque’s process fixes the loan underwriting process. Share on X

Jeremy, she started touching on a couple of areas that I want to talk to you about because you’ve been instrumental and seeing where the market has been for some time. Are there other solutions in the market? Chandra just touched on that. How do they compare to Calque in a more detailed way? Talk about that. What should lenders be aware of as they’re looking at the various solutions out there or the buy before you sell solutions?

There are a lot of different solutions that have some slight differences in a couple of major models. The first major model is the one that Opendoor kicked off, which is pretty much home flipping. They’re buying your old home from you on demand. Because they buy that home on demand, you have more control over the timing of the process.

The problem with that is, as Chandra mentioned, they’re going to then turn around and resell that. Home flipping is not a cheap process. You have additional transaction expenses. You have carrying costs, and they have to pass those costs onto the consumer. Opendoor is a pretty expensive process that costs consumers a lot of the equity that they had in their homes. The second big wave is something we refer to as power buyers. What they’re doing is they’re buying the next home on your behalf, letting you move in, and then leasing it to you for some period of time. When your first home sells, they sell the next home back to you.

It also duplicates closing and carrying costs. It’s a little more predictable and probably more efficient than the Opendoor model because you already have a built-in buyer for it, so you can coordinate the schedule a little bit more. What Calque is doing is we’ve solved it with a loan product. Part of what that means is you can eliminate a lot of that extra expense and you can pass a lot of that savings onto the consumer.

For lenders, the reason this is so important is that most of the major players in those other two models, to try to subsidize their expenses and try to get it a little cheaper for the consumer, have either become mortgage companies or formed mortgage companies. They’re going after purchase business right at the time when refi has completely dried up, and lenders need all the purchase business they can get their hands on.

It’s almost setting up more of a competitive conflict if you’re a lender out there working with one of those other solutions. Aaron, let’s talk about loan originators leveraging this offering to better partner with the realtors. You have a unique perspective as a realtor out there owning a real estate firm. Talk about this.

I can say with a resounding yes, that this offer is a creative solution that you don’t ever usually get in this capacity. What it does for realtors is it takes some pressure off and it gives them an opportunity to service their clients. In other words, I can have my client find the home that they want to find and get it and move into it. Now, it gives the realtor a chance to market their home with them and not in it properly. I can do many things as far as the stage it and market it better. It gives me time. It gives time back, which is a huge factor in the sales process, as you know.

I can get that. Anytime you get some time back, that’s worth it. Jim, back to you. As a mortgage lender, what does the mortgage lender have to do with facilitating this process?

 

I want to go back to Jeremy’s comment regarding competitors. I am very excited that Calque is a partner to us as a mortgage company. They are a partner to us as a real estate company. They are not looking to take a commission or revenue share, or get in the pockets of either one of the partners. What they do is help us make our job easier by having a robust backend system that makes it very simple for the consumer to get qualified for their new property.

As a lender and as a bank, we have to always look at the ability to repay. We’re working hand in hand with Calque to make sure that we provide that customer with the best custom solution. I like the fact that they are supporting the local professionals in the markets that Calque has offered. They are not a competitor. They’re not coming in to disrupt. They are helping enhance my job and Aaron’s job to be more relevant to the consumer and give them tools that they need to make a great decision for one of the life events that we have financially that’s very significant, as we know.

As I hear you talking, this has got to help your business in a downturn like we’re in. This has got to be giving you some life and lift to your business, Jim.

We like to work with everybody. We are collaborators. If I can offer a realtor partner, a financial planner, a wealth advisor, or a builder another opportunity to help a client and get off the fence about making something happen, we love that. This is a fantastic way to work from the local market where it matters. We get to look at the client face-to-face and make sure they understand that this is a solution that will benefit them.

A lot of those online companies that use portals, unfortunately, you’re not talking to someone who’s a professional in the market. I would trust Aaron in his markets if I was a seller. I would have a harder time trusting an online call center that doesn’t know the relative things that are important in the community. It’s a great tool that partners do not compete.

Aaron, I want to come back to you when you’re working with a lender that is participating or partnering with a program like this, give us your perspective. Do you find yourself partnering with it? I’m trying to get to the question of who should be trying to partner with Calque. Is it both the lender and the realtor?

Yes, I agree.

It seemed like the ideal.

It is both because often we forget that this is a team effort and we all have the same client. The beauty of this is that we’re all working towards the same end goal, and that’s servicing our clients and doing what’s best for them. If we can offer them a creative product, whether it’s a loan officer or a realtor, if we’re working on a product or tools that are a solution together, it’s how it should be. That’s how I’ve always believed the transaction process needs to be. It needs to be a uniform front, and this enables that to happen.

Calque creates a transaction process that has a uniform front. Share on X

We have a fair number of realtors that listen to the podcast but it’s largest lenders. I’m assuming, Aaron, that you didn’t know Jim. He’s knocking on your door trying to get some business out of you and get a relationship going. Jim says, “I got this cool program with this Calque company.” That has got to give Jim an advantage going in there. It’s a rhetorical question but talks about that.

It does. He would have me remove the contingency and that’s what it does. It helps the realtors as well so it is one of those things that you don’t always get and not knocking lenders or loan officers. Sometimes they only have a bag of repertoire that they have. This gives them something unique. As a user ourselves and speaking from actual clients, it is a win all the way around.

It seems so obvious, but I want to drive home the obvious and not overlook that. Jeremy, talk to me about what a lender would look for in a partner such as this. There has got to be a lot of issues with compliance and data scam. There are a lot of issues that this opens up.

I’ll talk about a couple of items. One is anytime, you’re talking about trust, the question is can someone do what they say? Will someone do what they say? You want to be able to check out both of those questions. To talk to competitors in the space, I would say a few things. First, to Jim’s point, Calque is a partner from the get-go in its DNA. Five of the senior advisors in the company are all coming from organizations that have focused on enabling lenders over the years. That’s different from the DNA of a lot of the other companies that are out there who are looking at how they build a mouse trap to take customers away from lenders.

A lot of folks are going to keep their mortgage companies and operations and continue to compete directly with lenders. As mortgage gets tougher and tougher to make a bot in the mortgage, some of Calque’s competitors are going to spin out their mortgage operations and pretend to be friends. If they went to your business when business was good, do you want to give them all of your data and build up all of the customer relationships with them when times are hard, knowing that when times are good again, they’re probably going to come right back after your business? That’s one key question.

 

The other one is when you do talk about compliance, all the lenders reading this know that there is a whole different world of complexity when you start talking about loan products versus the complexity of flipping a home. We’ve just seen one pretty significant fine. Opendoor was fined $62 million from the FTC essentially for deceptive marketing practices. When you think about the FTC versus the CFPB and the OCC, the FTC is a pussycat from a compliance perspective. They lie.

The other big question for a lot of folks as they look at this is, “Can you, as the lender, trust them with your data?” Can you trust them to help you navigate a complicated compliance environment and deal with truth and lending and Reg B? A number of competitors are going to get smacked in the near future for violating the anti-steering provisions of RESPA Section 8. You need a partner that’s good at what they do, compliant, and a true partner.

You need a partner that's good at what they do, compliant, and true. Share on X

I think a lot of our competitors are going to find themselves on the wrong side of RESPA Section 8 and the anti-steering provisions there. Calque is neither a realtor nor a lender. It’s an enabler and it’s a partner. Everything from the ground up has been oriented to work with lenders and realtors. As a result, you don’t have to worry about any of those RESPA violations.

Those are great points. I want to dive into a couple of those a little bit better because they’re more important. I want to also say that Jack Nunnery, my cohost, was able to join in on the interview, Jack. It’s good to have you here.

Thank you, David. It’s good to be here. Jeremy, as a follow-up on that question, have you received your SOC certification?

Calque is not only SOC 2-compliant. We’ve completed Type 1 audits, and have our attestation and that’s another key differentiator. Most of the players in the space are not even SOC 2-compliant. One question is, what are they going to do with your customer data when they get it? The other question is, can other people get your customer’s data when they get it?

As a lender partner in this thing, you’re complicit in this whole process if you have brought them in. I think this is a huge issue when you’re looking at who you’re partnering with on the buy before you sell.

David, that’s a very important point that you made. Financial institutions and independent mortgage bankers have to have a robust vendor oversight vendor management program. As part of vendor oversight, the IMB or the financial institution has to be checked to determine whether or not a vendor is SOC 2-compliant.

When you send your consumer data to a third party and they’re not SOC 2-compliant and there is a breach, the financial regulators are going to point at you because you released the information to a non-compliant vendor without doing the proper oversight. I think that’s significant, David. Jeremy, congratulations on getting your SOC 2-compliant certification.

Thank you very much. We have a great team.

I have a question for Aaron. From the optics of the realtor, do you have to be certified to use the trade-in mortgage product? As an extension to that question, do other solutions require some level of exclusivity to work with them? Could you answer that Aaron?

For one, it’s very easy to partner up in this product and secondly, there is no exclusivity, so you don’t have that to worry about as a realtor.

Your time in banking and the former company you worked with, which I also had as a client, is very sensitive to these things, so it’s not surprising that you would cross the T’s and dot the I’s. Chandra, we could go on and on here with this interview. It has been great to have Jim and Aaron on this. Also, Jeremy and Jack have joined in here. Chandra, for those folks that want to learn more. They see this as a real advantage. It’s something that they go, “I want this on my tool kit.” How can they learn more? Where would you point them and how can they start having conversations with who and how?

I would route everyone first to TradeInMortgage.com. We have pages set up there for lenders, realtors and consumers, so you’ll be able to get the information that you need. In addition, we have social media outlets that consumers or any party can connect with us, like LinkedIn and Facebook. That’s probably the best place to start. From our website, you’ll be able to reach out to us. We’ll have contact information and ways to reach out like email, phone, etc.

 

We’ll open it up for the audience. You can talk to each one of these individuals. Jack and I were excited. We have been involved. We serve on an advisory board. Jack and I both do, so full disclosure on that. We’re doing this not just because of that. What I said at the beginning of the show is we’re here to make you aware of innovative tools that will help you originate more and help the consumer. That’s what this is all about. Let’s get consumers into homes. Let’s get them into homes in a manner in which they can stay in those homes and do so successfully.

The market started backing off a little bit. It’s not quite as hot and frothy as it is, but rates are starting to show us signs of going down again. We’ll find out what the Feds do. Bottom line, having a buy before you sell program gives you so many tools in your tool chest. The bigger part of that is then, who do you do it with? Find a company that checked the boxes. These guys have been as conscientious on this. Jack, I’ll let you add some party comments on this.

David, it’s always good to be part of a discussion that finds solutions to challenges in our industry. Given the market conditions right now, if you could eliminate contingent contracts, I think it’s a big step forward for the purchase process. We always talk about mortgage loan officers being able to bring solutions to the realtor community. I think this is a great way for LOs to partner even deeper with our realtor community and the mortgage space. This was a two-thumbs-up solution. I’m excited.

I am too and the best part of it is you don’t have to worry about if they cross the T’s and think about everything. Jim, I’m thrilled that you’re on here because, as a lender, you’re willing to share this with your broker mortgage brothers and sisters out there. You’re not trying to keep it all just for yourself. Way to go.

Transparency is great. We all win together when we have better products to help consumers. It’s great and I’m excited about bringing this opportunity to other lenders and bankers that have similar setups. Thank you again for having me on.

Folks, it has been great to have this team on and get ahold of them. Chandra, what is the website again that you want to direct them to?

It’s TradeInMortgage.com. I would love to circle back to something Jack said. For our loan officers, we’ve created marketing materials that can be branded or co-branded for your company. You get to fill in your individualized information. They’re helpful in both reaching out to homeowners and also reaching to realtors. We’re going to help you in your marketing efforts and help you get the word out.

I didn’t know you were a doctor so we’re going to start to refer you as Dr. Chandra from there on. It’s important to have that. You guys have made it so easy. You’ve created a market material. All they have to do is put their branding on there and then get it out. That’s outstanding.

We can put your branding on there for you. You only have to type in your personal information. That’s it.

Chandra, Jim, Aaron, Jeremy, and of course, Jack, thank you so much for joining in on this interview. I’m excited about sharing this with our audience. Blessings to you all. Have a great rest of your day.

Thank you. We appreciate it.

 

Important Links

• Calque
• InstaMortgage
• LinkedIn – Calque, Inc.
• Facebook – Calque

 

About Jeremy Foster

Jeremy Foster is a financial technology expert with more than 15 years of c-suite experience and deep expertise in the real estate and financial sectors. In the banking space, he guided product strategy for a $25 billion deposit product portfolio and led the successful development of analytics and industry solutions deployed through more than 1,000 banks and credit unions.

As a collaborative and data-driven leader, Jeremy has served as the Chief Financial Officer and Chief Operating Officer at three Inc5000 companies, including one of the first hybrid iBuyer solutions in the real estate technology sector. When asked why he founded Calque, Jeremy says, “Choice and competition are good for consumers and for the economy.  As large, PE-backed property-tech companies began using bridge ownership programs to consolidate the mortgage market, we realized that if we designed and powered the right product, mortgage lenders could use their experience to provide superior customer service at a more competitive price.”

 

About Chandra Srivastava

Chandra Srivastava has 15 years of experience as a data-driven marketer with deep expertise in research, analytics, and predictive modeling. Chandra began her career conducting primary research to help clients manage unfolding crises and long-term corporate reputations, including Fortune 50 financial firms recovering from the 2008 financial crisis.

She went on to receive her Ph.D. in marketing strategy from The University of Texas at Austin with an emphasis on social media and empirical modeling and is currently faculty at St. Edward’s University. When asked why she joined Calque, Chandra says, “I’m inspired to work on products that make life better and fairer for everyday consumers. It’s exciting to work on a mortgage solution that will allow many homeowners to buy a new home with the same ease and simplicity that used to be financially out-of-reach for most Americans.”

 

About Jim Black

Jim Black is a 20-year veteran in Mortgage Loan Originations as a producing independent owner. Jim also specializes in purchase funding and bridge loan solutions and has consistently been ranked in the top 100 Mortgage Loan Officers nationally. Jim brings a marketing and strategic perspective for integrating mortgage broker and mortgage banking into custom solutions that create opportunities for families and referral partners to create wealth through real estate financing.

When asked why he joined Calque, Jim says, “My passion is to provide the consumer the best-customized solution for their specific situation. What differentiates Calque from the rest of the market is a unique product that creates a simple way for a family to leverage a financial tool to help fulfill a life event, which creates or sustains the dream of homeownership.”

 

About Aaron Kirchner

Aaron Kirchner is Partner/Principal Broker at Luxury Homes Of Tennessee, LLC. A fast-paced growing niche real estate company based in the Nashville, TN market opening additional offices in Texas and Florida later this year. He has close to three decades of experience in the real estate industry and has seen several major growths and retraction periods over the years.

Aaron focuses on integrating technology solutions for improving efficiency in the real estate sales process while maintaining client connection and top shelf-level concierge service. He understands the importance of the role of a real estate professional. He has ownership in additional real estate companies including tech-based Life Real Estate, which is launching a national rollout soon, as well as, Blok Group, a leading real estate solutions provider allowing entrepreneurs the ability to create and operate profitable real estate businesses with economies of scale.

Aaron also owns Commercial Properties Of Tennessee and Kirchner Realty, LLC. In addition to real estate, he is Chief Operating Officer for Equity1 Advisory Corp a business consulting firm facilitating business brokering and mergers & acquisitions. His prior experience includes assisting the executive board in taking a billion-dollar company public early on in his career. Along the way, he has owned a regional chain of health clubs and other fitness-related operations. Aaron has a lifelong passion for business, especially real estate, and is blessed to be able to do what he enjoys!

 

About Jack Nunnery

Jack brings over 38 years of experience in mortgage banking to the team, with expertise in Sales, Operational Fulfillment, Capital Markets, Quality Control, Loan Servicing, Treasury and Liquidity Solutions, and Risk management.

Previously, he had profit and loss and management environments, including a top-tier warehouse lending program, a large correspondent aggregation business, and a leading MSR financing team. Jack also built a top performing, $14 billion residential servicing portfolio. During his tenure, Jack either created or significantly scaled these businesses while constructing a best-in-class risk control environment.