Lykken on Lending

In this day and age, technology is not anymore just about scaling a business. It is about the return on investment or value add it can provide. In the lending space, this means finding the technology that can make you efficient and scale through the amount of deal flow—a much-needed tool in this tight market. Dan Catinella has 20 years of experience in mortgage technology, focused on driving digital transformation through all lending channels. He joins David Lykken to share his insights on lenders leaning on technology, whether on a crutch or to be successful, given the current market conditions. As the Chief Lending Officer of Total Expert, Dan develops high-impact innovation strategies that align with the company’s business goals and growth priorities. He dives deep into some of those, giving a glimpse of how they invest in customer intelligence and data mining. Plus, Dan also gives his advice to lenders on where to focus right now and how to break through the negativity with the ups and downs in the industry.

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Watch the episode here

Driving Deal Flow During A Tight Market With Dan Catinella Of Total Expert

Dan Catinella is here with Total Expert. He’s the Chief Lending Officer. I’ve got to get some insights into why a tech company has a Chief Lending Officer, but this guy knows his stuff. I’m excited to have him join me on the show. He’s known by many of you. You are going to enjoy this interview. Dan, it’s good to have you here.

You as well, David. I’m glad to be here. I’m happy to be here.

I’m looking forward to the opportunity to talk to you. More importantly, there’s so much that Total Expert is doing, and then what you are doing. I’m interested in getting into that. First, Dan, I want to start by letting our audience get to know you, those that may not know you. Tell us a little bit about yourself, your background, and something memorable if you could.

I will start by saying I grew up in the mortgage tech space. I was three weeks out of college, thrown into a small and a medium-sized lender, and became passionate about the industry. I thought it was going to be a short-time gig until I found a real job after college. The next thing I know, I’m twenty years in. I started my career off in software development, and grew through the ranks through that lender. I had an opportunity to help build out Finance of America.

You were there for how long?

 

 

Since inception, seven years in total. I had a lot of different senior positions over there. My last position was as the Chief Digital Officer of Finance of America. Where I was focused was any of the business-facing technology, building out the strategy around technology, and how we were creating business value through our technology initiatives.

One of the things that I had an opportunity to do through that role was being a partner with Total Expert. We selected Total Expert through an evaluation process at the time because Finance of America was built through an acquisition strategy. We had seven different CRMs and marketing tools throughout the environment, not to mention all the other different sales tools and widgets that were hanging off of those different marketing CRM platforms. My first duty was, “Dan, figure out which is the best of breeds platform that aligns with our strategy. Ultimately, you go solve it, bring it all together, sell it to the sales force, and figure how it’s all going to work.” That was literally week one of the Chief Digital Officer role.

You inherited seven CRMs, and then consolidated all of that down. That’s pretty notable. What do you like doing in your private time? What are some of the things you enjoy?

I like to work out. I love skiing in the winter. I like to scuba dive and enjoy some summer fun as well. I like to boat, get out into the water, and drop these devices that we all carry around. Get out into the world a little bit and forget all about technology sometimes.

You are hitting on two of my favorite things, snow skiing, water skiing as well, and scuba diving. I love doing that. When you look at where the industry is at now, how do you see lenders leaning on technology, especially given the current market conditions? Leaning can have two connotations, leaning on in the form of a crutch and leaning on to be successful. Talk about that.

I always looked at technology as how we can provide value to our sales and operations force and almost elevate them to focus on more highly skilled areas and alleviate the mundane day-to-day work that automation and technology can ultimately solve. To me, it has never been about removing the human element. The transaction of a mortgage is one of the most important things and assets. Owning a home is one of the most important assets that every customer should take and understand. Having solid advice that is humanized and personalized by an individual, not just through pure technology, is an important stature.

I’ve always tried to figure out ways that technology can enhance that process and elevate the salespeople to focus more on growing their business, business development, relationship building, bringing in more business, and not necessarily managing pipelines, nurturing prospects, and things of that nature where technology can play a role.

 

 

In this environment, everything is about Return On Investment ROI. I don’t think there’s probably a CEO out there at a lender that hasn’t tasked their technology and marketing executive team that define the return on investment that each of their technology platforms is providing their organization. It’s all about ROI this day in this market as lenders all try to reduce their costs and provide their sales force with the most valuable tools. I was reading an article saying that we are about a 60% drop off in volume year-over-year from 2021 and month-over-month.

It’s not necessarily about scale now. It’s how technology can make you as efficient and scale. It’s more about finding the right tools, and the right value-adds that ultimately will create deal volume and deal flow. What tools are creating customers to come back to us or referral partners to engage in and find valuable that, ultimately, you are going to bring us the next deal? A lot of it has transitioned from scale and efficiency over to, “Which one is providing me new deal flow now?”

You hit on a couple of points. Volume is down 60%, sometimes 70% or 75% for some lenders out there. When you say these ups and downs, it seems like it’s mostly down these days. When you see these things going on, what would you advise lenders to focus on now?

First and foremost is educating and advising. It’s being at the forefront of being the educator, showing everybody, not just consumers, but also your referral partners, that you are the expert in the space. To me, it always starts with educating and advising in a downturn market like this because you’ve got to put yourself out there. You can’t crawl into a hole and be scared of it. You’ve got to get a little gritty. You’ve got to get out there and show yourself, whether that’s on social media, in-person, or at lunch and learn with your referral partners. Get out there any way you can and educate and advise.

Ultimately, you’ve got to combat the media. The media is always going to be filled with negativity. The housing market is in a crisis. It’s a major downturn. There’s so much negativity day in and day out that consumers are seeing. You’ve got to get out there in front of it and educate and advise both consumers and referral partners.

I talked to a group of loan officers with one of our clients on a large Zoom call. They are all dialed in from all over. That was the number one thing. We need to zero in and become product experts. We need to be the go-to source of that. I like what you said, but you also touched on another thing, which is noise in the headlines. It’s all negative. It is easy to get caught up in that negativity. How do you recommend people break through to get away from the negativity?

I use the word gritty. That’s the word that makes the most sense to me. In this market, there are people that are going to be forced to retire. We know we have an aging population in the originator community. They may take this opportunity to exit the industry as a whole. The people that will be around have to get gritty. They have to know that they are going to have to do more in this market downturn. The guys that are seasoned that have been through these cycles before know that this business is no longer falling out of the sky.

The people that will be around have to get gritty. They have to know that they will have to do more in this market downturn. Share on X

You’ve got to get gritty. You’ve got to get out there. You are going to have to do more than last year to get even close to the level of business that you did. There’s no silver bullet out there. If you think that there’s some technology or the grass is greener at some other lender that’s going to provide you this silver bullet, there is no silver bullet in a market like this. You’ve got to get gritty, get out there, educate your consumers, and educate your referral partners.

Gritty and dirty. You’ve got to start getting in and digging, which gets to the next point. Before, I heard you talk about it. You and I first met in person at the Accelerate 2022 conference there in Nashville. We are going to be back in Nashville. Everyone is talking about what they need to do. It gets into something you talk about, which I love, and it’s mining your current databases, data mining. Talk about that.

We use a phrase at Total Expert called Customer Intelligence. I will say from all the data we’ve looked at from some of our customers that are already using our platform, to simplify it, for every 1,000 customers that you have in your past client database, you should have about 10 warm opportunities per month. They are not all going to convert into applications. For every 1,000 customers, that should create about 10 meaningful conversations a month. Some of these originators have 5,000 or 10,000 customers in their database over the span of their business. It’s impossible to do things like, “Let me have an annual mortgage review with 10,000 customers every year.” It’s not scalable and possible.

How do you use data and insights to ultimately understand where the customer is in their financial journey and when the right time is to engage them with a meaningful conversation? At Total Expert, we are putting a tremendous amount of investment into customer intelligence and building this out. Things like, “My customer’s credit was pulled in another lender. They listed their home. They have a massive amount of equity in their home now that they can tap into.”

As we continue to make these investments, we are also not just looking at it as a point-in-time insight or alert like a credit pull, but it’s how we enrich the customer profile. You are going to build this customer profile when you first acquire that customer through the first transaction. That’s going to be stale 30 days after you fund that transaction.

It’s not just about using that original data, but also about enriching that profile. Make sure that you are constantly updating home values in that profile. How much has the home been worth three years after they transacted? That’s valuable. How has their credit profile changed? Maybe they got married or had a child. Maybe they got a divorce. All of those ultimately contribute to having meaningful conversations and an opportunity to try to get to the point where you are predicting the next way you can serve that consumer.

It’s important that you’re able to realize life events. You have some wonderful features inside Total Expert that helps you do that, including some monitoring tools. Let’s get into some specifics of how the Total Expert system helps your customers that are using your system effectively. What are some of the features that they can use to do some good data mining?

Let me set the stage a little further before I jump right into that. A first-time home buyer, if we look at some data points, the average first-time home buyer will ultimately have ten transactions through their life cycle. Somewhere around ten is what the statistics have shown. Couple that with an industry average, and our industry is somewhat embarrassed by the fact that we are still floating around a 22% customer retention rate. There are a whole bunch of reasons why that is. Our customer intelligence platform has been proven now to double the industry average customer retention rate.

 

The way we do it is that we have our core four alerts that are operational. Those are things like credit triggers. My customer went and pulled their credit. It is equity. The customer has hit a certain threshold of the capital equity in their home since they’ve originated with the originator on the first transaction, or they’ve listed their home on the market, or the rate is now significantly better that it makes sense to talk about some refinance transaction. Those are what we are calling our starter package or our core alert system. That will scale out over time as we continue to make investments in this.

We are the only turnkey solution on the marketplace now. Not only are we providing those insights and alerts, but we are also giving all of our lender partners a complete journey automation workflow out of the box that we hand to them based on the best practices that we’ve seen lenders implement through our system.

You get the data. You get a complete journey automation workflow that is communications after your customer, whether you want to use email, SMS, or potentially even launch digital retargeting ads that are all super relevant based on that data insight and alert. You get the entire journey workflow that also includes notifying your LOs so that they can immediately engage that consumer, and a complete dashboard so that they can prioritize which customers are closest to the dollar so that they can prioritize their work accordingly each day.

You talked a little bit about retargeting. Talk about how your system effectively does that.

We have a partner relationship with a couple of digital ad companies. What happens through our journey automation tool is that you can add them into a group at a certain point that you decide. Let’s say a credit insight or a listing insight alert came in because a consumer listed their home. That follows along the journey. You could decide at what point you want to start retargeting them on Facebook.

You retarget it through all the different means, communication, social media, texting, and email.

They go onto their Facebook page and now see a super relevant ad that ultimately will bring them back to you as the originator on the file. It is a completely turnkey solution, but each lender has their own way that they can customize as they could take our canvas, our no-code solution. They could decide if they want to do something more creative or not with our solution.

What are you seeing that’s working for some lenders? Give us some examples. We had Jesse on the show here, a great interview. What are some examples of lenders that are using this effectively? You are a Chief Lending Officer. We’ve got to understand what a Chief Lending Officer is. Is the role that you have is helping them effectively use the system? Is that it?

It’s a combination. One, we wanted to make sure that all of our clients understood our continued commitment to the mortgage and lending industry. With my many years of experience working inside of a lender, I can understand and appreciate what lenders go through, especially in a market like this. It’s also making sure that our product teams are well educated on what a cycle downturn even means to them, and ultimately how we can provide the most value on things that we are making investments in that are relevant to the market conditions.

Spanning across the entire organization, highly focused on product, highly focused on building out our mortgage strategy to make sure we are hitting the mark as far as what we are delivering is relevant to the market, and ultimately providing the most value for our customers. It’s always about our customers in our minds. Collaborating with customers, determining what’s working and what’s not working, where we can get better and where we can improve, and ultimately with my twenty years in lending, being able to inject that into the Total Expert organization and help accelerate our roadmap and deliver more value at a faster pace.

 

 

When you are beginning to answer, I want to go back and make sure we get all the points that you wanted to make about the ups and downs in the industry and where you would advise lenders to focus now.

One of the things that are important is to make sure that each originator can formalize and build strategies around how to win in this market, things like do you have a product differentiator that you can help from an affordability standpoint or get consumers into the home? Do you have a strategy around a 2-1 buydown and how that can play into some of the affordability over the next several years, as interest rates are much higher than consumers are used to? Do you have a good plan to present a rent versus buy scenario to a consumer to try to get those potential buyers that are currently renting over the hump to purchase that home even in a rising interest rate environment?

Are you using a cost of waiting so you could show a consumer, “Over the next five years, this home is going to appreciate X. The more you wait, the higher the cost of that home good purchase will be?” Those are all super important that each originator is armed with simple ways to tell that story. Not only to consumers but also to the referral partners. They are the experts in the space. They need to be able to tell those stories.

The other thing is that I’m seeing a lot of lenders and originators, especially top producers, focus on creating and enhancing their digital presence. That doesn’t stop at content creation, but that’s certainly where it starts. Being consistent in social media outlets, you can communicate and get educational content out at scale on social media. Other than time, there’s no cost to doing that.

A lot of lenders and originators, especially top producers, focus on creating and enhancing their digital presence. Share on X

It doesn’t have to be a polished video. The three things that every originator is going to bring up are, “I don’t like how I look.” Sorry, but that’s how you look. You’ve got to get over that one. “I don’t have the time,” which is pure BS. Everybody has 10 to 15 minutes to record a quick video. “I don’t know what to say.” Any lender should be talking about, “How can we get originators over those three humps so that we can ultimately help them build their personal brand, be the experts in the space, and be out there?” It will come back tenfold into those lender companies from the business they bring in.

It takes time to build your digital presence. What you do now, you may not reap the benefits for a quarter or two. That’s the reality. Being consistent, staying at it. Look at some of the top producers. You will see what they are doing on their social content. It will give you some great ideas. It’s just not about the content. You’ve got to have a good reputation. If you don’t think consumers are googling you these days, you are dead wrong. Probably one of the first things every consumer will do is, “Let me see how this guy shows up in Google,” and they are going to google you.

If you don’t have reviews, if you don’t have digital credibility and reputation that proceeds itself, you are going to lose deals through that. That is important. When was the last time you bought something online that you didn’t look at a review first, and that was a big indicator of whether you were going to purchase or not? Consumers are on the internet. You’ve got to be there too.

You also have a good partnership with BombBomb. Talk a little bit about that. They had a big presence there and spoke at Accelerate 2022. They had some great things. You are also handing out their books. They’re a great partner to have and a great celebration of what you are doing. Talk a little bit about that.

BombBomb has always been a strategic partner for us. We are releasing a complete enhancement to our BombBomb integration. Now more than ever before, it’s a completely integrated solution into our platform. That’s going beyond sending communication and broadcast communication out. Video is super important. If you look at the statistics, 65% more people will open your email if it’s a video over a flat email and text.

Video is impactful. Beyond sending out a broadcast of educational content to referral partners or consumers, we are seeing a lot of originators start to do personalized things inside their journey. Think about giving them a personalized dos and don’ts list as they are nurturing that prospect through their shopping process. “Don’t go buy a car. Here’s what you need to do to improve your credit,” and things of that nature.

Imagine how much more impactful that is versus a text email when they see David’s face on that email, “It’s real content. This is the expert I’m dealing with.” It gives you a trust factor that you are not going to get through text or email. You could completely personalize through video content on our platform now. We are seeing a lot of originators and lenders take advantage of that.

What are some of the top-performing mortgage loan originators and lenders doing out there differently to succeed in this market? You guys have a unique perspective on this. You are seeing those that are doing better at some things than others. What are those?

I’m going to start by saying that traditionally, when I would talk to originators, I would ask them, “Tell me how you are getting your business. How many agents are you working with?” I get 90% to 95% of my business from between 5 to 10 real estate agents. That’s not cutting it in this market. A lot of their focus and where top producers are winning is expanding that net. How can I attract new agents? I use this phrase, “When you are trying to attract new agents, you’ve got to define what your X factor is.” Your X factor is your differentiator. It could be your lender’s differentiator or your own personal differentiator.

 

It doesn’t matter what it is, but you better hell know what the heck it is so you can go out there and sell it and attract new agents and get a foot in the door. Sometimes it’s about getting a foot in the door, even if it’s a piece of technology that you know they are never going to use. It gets you a foot in the door of brokers’ conversation so that you can start a relationship there. You’ve got to be able to have some referral partner pitch deck. Lenders should be helping their originators do that. Originators typically are not all fantastic about building a PowerPoint deck that helps them sell that. Lenders should be helping their originators with those types of things and helping them define what their X factor is.

It could be a product differentiator. Offer reverse mortgages. It’s a great opportunity now, especially since the Baby Boomers are all coming. There are 10,000 reverse-eligible people every single day. If you’re not selling reverses, you probably should talk to your lender about that opportunity. You’ve got to stretch your product knowledge and product portfolio. You are not selling standard conventional stuff.

The top producers know all the products and the guidelines. They have a good way to articulate their X factor. Part of your X factor could be self-service capabilities. An agent can generate their own preapprovals on a Saturday when you may be at a soccer game with your kid, and they don’t have to wait for you.

Maybe it’s being able to generate their own open house flyers, so they don’t have to rely on their originator to do that. It could be co-branding differentiators. Real estate agents historically are not good at following up with their consumers. Most of them will admit that to you. The sticky magnets with the agent’s pictures on it that go on your refrigerator, you could probably do better than that these days. Whether it’s things like Homebot, Percy.ai, Milestones or ComeHome, looking at those tools and determining, “Do they give me an edge in the market to be able to offer and broker a conversation with an agent?” Those are some great co-branding differentiators that you could bring to market.

I love what Milestones is doing. It’s one of the ones that stand out in my mind. You guys have a co-partnership with them as well. Full disclosure, I’m invested in the company, so I think highly of the company. I select carefully where I put my money and my time.

They are doing some cool stuff.

Dustin and the company are doing some outstanding things there. I encourage anyone reading to check that out. Dan, I want to underline again what you said about the X factor, which is the differentiator each of us has, and people need to find that. That’s why a partnership with a company like Total Expert that focuses on that is important. Also, I encourage our readers to read on Dr. Cindy McGovern’s episode. It’s an important part. What are some tips that you would say for helping people discover that factor of their uniqueness? What are some of the things that stand out in your mind?

It’s understanding your competitors.

That’s a competitive factor. It’s understanding your competitors and your product.

It’s where you can set yourself apart.

There’s no one that has a personality like yours. No one has your fingerprint or your iris or anything like that. We all have something unique and different about us. Oftentimes, there’s a shame factor that people associate with that difference because they are trying to be somebody else. They don’t have to be. That’s what I love about you, Dan. You are so authentically Dan Catinella. There is not another one around. That’s why I encourage people to get to know you.

You’ve got a lot of wisdom and great experience, especially sorting through all those different CRMs that you had to consolidate down to one when you were at Finance of America. Great company, by the way, and a lot of changes in the marketplace that’s happened to them. I’m glad you are at this company because I am excited about what Total Expert can do for companies that are struggling in this market. Final words you have for our audience?

I encourage anybody to reach out that wants to learn more about my role at Total Expert and Total Expert. We love collaborating with customers and understanding what challenges you are facing in the market. If it’s a conversation of, “We are not in the market for a new marketing automation or CRM tool,” but you want to have a discussion and chat, I love that. I always have loved collaborating with my peers. It’s one of the things that I love about being at Total Expert because now I get to do that at scale. Reach out. I love to have a conversation. I will be at MBA Annual for anybody that’s going to be there as well. I’m looking forward to that.

What’s the best way for people to reach you?

LinkedIn is probably the best.

LinkedIn is such a powerful tool. Readers, go read the episode we released with Jesse. He did an outstanding job. He’s someone that’s using the product as a lender and the successes you are having. Dan, thank you so much for taking the time to be here with me. It’s a good interview.

It was a lot of fun. Thanks, David.

Thank you.

 

Important Links

• Total Expert
• Jesse Lopez – Past episode
• BombBomb
• Percy.ai
• Milestones
• ComeHome
• Dr. Cindy McGovern – Past Episode
• Dan Catinella on LinkedIn

 

About Dan Catinella

With 20 years of experience in mortgage technology, Dan Catinella is a seasoned technology executive focused on driving digital transformation through all channels of lending. In an ever-changing digital landscape, Dan keeps a constant pulse on the next innovation that could change the way business is conducted. As Chief Lending Officer for Total Expert, Catinella identifies and develops high-impact innovation strategies that align with the company’s business goals and growth priorities. He works with Total Expert’s customers to dig into the problems they’re looking to solve and aligns Total Expert’s innovation strategy with their business goals.