Lenders One, under the leadership of Justin Demola, CMB, is a national cooperative dedicated to empowering its members—comprising independent mortgage bankers, banks, and credit unions—through innovative solutions that reduce costs and improve efficiencies. Building on the success of its credit reporting service, Lenders One has also launched L1 Insurance. This initiative is designed to streamline the insurance process for members’ borrowers, offering competitive quotes from a pool of 30 to 40 underwriters. With insurance quotes provided by CastleLine Risk and Insurance Services, LLC, an Altisource business unit, in collaboration with Policygenius LLC, Lenders One ensures that borrowers receive multiple quotes, helping to lower their mortgage payments through reduced insurance costs. This not only benefits the borrowers but also enhances the member’s value proposition, creating a more efficient and seamless experience. As it celebrates its 25th anniversary, the Cooperative remains at the forefront of the industry, providing essential tools and resources for competitive success.
[David] Listeners, welcome to another podcast. We’ve got Justin Demola. He’s a CMB, President of Lenders One and Senior Vice President of Origination Solutions for AltiSource. Justin, good to have you on the podcast. [Justin] Thanks for having me, David. [David] It’s an honor. First of all, I want to say how blessed and honored we are to be a member of Lenders One. It’s an outstanding organization under your leadership, it has grown tremendously through these turbulent times. You’re doing a great job and it’s good to have you here. And I’m really interested in getting an update about the happenings at Lenders One. And probably the best place to start, Justin, is talk about the unique value that Lender One brings to its members. [Justin] Well, David, obviously you, as a provider, you see the value that we provide to the providers. But our whole mission is to create value for our members as well as our providers and our homegrown solutions. But realistically, when we look at everything that we do at Lenders One, it’s all, member centric and it is designed the philosophy is to help our members compete every day against the better, capitalized mortgage companies that are out there by reducing costs, improving profitability, improving efficiencies and improving top line revenue. But we look at all the solutions that we try to bring on. We’re really trying to listen to our members to see what they need, how they need it in any particular time. We have such a wide variety of members, our smallest member closes half a billion dollars a year. Our largest member is in the high teens, low twenties, everyone finds different value in what we offer and how we offer it. It’s our job and we’re tasked to essentially find the best solutions for our members at any given day or cycle in this industry that we are in. [David] Yeah. And that’s the thing that’s probably unique. You guys are really bringing solutions in going out and aggregating the power of the membership and bringing more cost affordable solutions. I know we’re going to get into that, but I’m really interested in hearing what your team is hearing as they talk to all the various members, especially when we’re in this climate that we’re in, what are you hearing from them as far as the things that they’re facing and what are some of the solutions you’re bringing to help them? [Justin] It’s a little bit of everything, right? I think the hot topic today is still credit reporting fees, right? And third party fees to manufacture a loan. When we look at that, those prices have skyrocketed over the past few years. And to everyone’s credit, for our providers of data, they’re publicly traded entities, they have shareholders, they have to answer their shareholders as well, right? And have to have a return on investment. The industry is going through downturn for some time now, and I think everyone is looking at that and understanding where we are and hoping that the light at the tunnel is coming soon. When we look at the product, I think the number one product we’re offering right now for our members is our full service credit reporting agency. And we’re saving our members significant amounts of money. [David] How does that work? get a little more into that so that they understand how this differs in the way it functions and how the savings is realized. [Justin] Yeah. When we look at the whole credit reporting agency that we started just about two years ago, it’s not our only line of business. It’s not our only source of revenue, right? We’re relatively diversified on the origination side of this business. And, from our title group to our appraisal group to our insurance group to all the products and services that we’re offering into capital markets. When we look at the credit reporting agency that we started 2 years ago. We were the first mortgage credit reporting agency approved by the credit repositories in about seven or eight years. So there was no new entrance to the market and mostly because, when you look at the barriers to entry, they’re relatively high. You need a strong compliance management program and a strong InfoSec program. Thankfully at AltiSource as a publicly traded entity, we have that. So, we were approved and we’re coming into the market as a little bit of a disruptor, right? So we come in and, we don’t need to have the typical industry margins across the board for our members, we can reduce margins and offer savings to our members, or we can work with them to order different products and services, whatever it is, we’re doing a full analysis for our members and really taking their current invoices line by line their loan manufacturing process is into account to figure out, what is the best solution for them? Is it different products? Is it just overall lower cost? and we’re seeing significant savings to our members. I get percentages. It’s 10% to 25%. If I look at raw dollars, it’s $100 to half a million dollars a year if not more, for some of our larger clients that we’ve proposed credit savings for. I’m really thankful that the membership is loyal to the products and services we bring to them. [David] It does cost savings. Yeah. It makes sense. [Justin] Yeah. It becomes a no brainer, right? In a lot of cases, it becomes a no brainer, but again, similar to the LOS’s out there, credit is a big thing to move, right? Because your supplements and your customer service and the unknown. So, I think, what we’ve done in the past two years is really significant, of the top of the 33 mortgage credit reporting agencies out there, we’re probably number 11 or 12 in just a two year period. And we owe that to the members. They trusted us with their products and services in their businesses, when we look at it, we’ll never be a top 5 credit reporting agency because we don’t deal with mortgage brokers. So it allows us to give white glove service to our defined number of members and we can grow the business that way. I think we’re onboarding something like 12 or 13 new members this month over the next 60 days into our credit space. So, we’re really excited about the credit business, but that’s just one way we can save our members money. [David] because you also have L1Insurance. [Justin] That’s a new launch, right? and that’s designed for a couple of things and the insurance program, we have a technology partner Policy Genius on the backend and realistically we’re integrating into their LOS systems. We’re taking that data and we’re reaching out at Policy Genius Group. Our agents Castle Line, our property and casualty insurance here. I run that as well. We’re reaching out to our members borrowers and trying to streamline the process for them, give them some geographic regions were given them. We have access to 30 or 40 different underwriters, insurance underwriters, and we’re giving them three, four or five quotes. But more importantly it’s designed to help them become more efficient, allow borrowers to lower their mortgage payments, lower, by having a lower insurance and streamline the process. So, there’s less back and forth between agents and the members. And then there’s a small revenue opportunity for the members as well. [David] Good, but you also have flood insurance. Is that less use basis, but it can be significant in the markets where that is. [Justin] Yeah. Obviously you have your NFIP program versus your private rates are pretty statutory. Because the NFIP is what the rates are, but we have the ability to offer it. And there’s some private market there as well which can benefit the borrowers in some circumstances. But as we know, flood costs are rising. All insurance costs are rising, flood insurance especially. At the end of the day, we just try to offer a competitive product to our members, borrowers to make our members look good, create value, to create stickiness, to take some stress off of the origination process and make it go a little more smoothly with an option or the ability for a small revenue game for the members as well. [David] Yeah. I want to shift over to the summit that we were all at in LA and back in March. It was one of the best conferences I had been to recently. The sessions were so compelling. One of those sessions, it’s hard to choose. There’s some conference to go through I’m not interested in any of these sessions. I wanted to be at every one of them. [Justin] I love hearing that. I love hearing that. [David] Yeah. It really was whoever’s selected the programs and bringing together and organizing it. It was like, I want to be in this one, but I want to, who’s recording the other one, I want to hear them all. [Justin] It’s funny, David. That’s why we tell our members, right? Bring a few attendees, divide and conquer because there’s a lot of really good sessions with a lot of great subject matter experts. I owe it to the team, right? It’s the marketing and events team, as well as the sales team. And we go out there and try to understand from the input from our members, what the hot topics are, what their pain points are and how we can find the best of the best to come in and educate on. [David] Yeah. One of the things that there was a real buzz about was the L1 credit report. That was a big topic there and we kept hearing about it. What is it that makes the L1 credit different from how members benefit? You’ve touched on it, but go a little bit deeper into that. [Justin] Yeah. It’s a bunch of different things. It’s number one, relationship. Our members are owners of the cooperative, right? So they have a vested interest for the success of the organization, but it’s a deep rooted relationships we have with our members at the decision making levels, right? So you start there. We offer them a very good economic savings which helps and again, varies depending on the member’s eyes. And then the customer service through the relationships, right? You’re not calling a call center with 300 random people, if they need to get in touch with me or Tricia or the regional director or Tracy who runs credit, to create a customer service group for us, at the end of the day, they have people that they can call at the highest level and they’re not just a number. And they’re not competing like I said, with 3,000 mortgage brokers trying to get their supplements done either. So we’re really trying to consistently improve the customer service there. To me, that’s important. The communication, right? So when a member puts a customer service request in and it’s touched once or waiting on the borrower for call back so they can call American express or whomever, we’re really over communicating as much as we can. And I think that’s keeping people happy. At the end of the day it’s tough, right? When you look at turn times in a customer service call center for the most part and you’re depending on third parties such as borrowers and creditors, you got to get everyone together. Sometimes you can’t get a borrower on the phone till after hours or two days later or three days later. And we really try to work with our members. So they understand. Hey, we reached out to the borrower. No call or reach out again. No call, whatever it is, because ultimately it’s important that the borrowers get back to us so we can keep the turn times down their efficient closing dates, etcetera. So we try to over communicate as much as possible, but we’re not just sitting idle. We’re making improvements everyday. We’re looking at what percentage of calls go to voicemail. If they go to voicemail, the time they returned, how long people are on hold. And we’re really just trying to look at the metrics. Run it as a big business, again, AltiSource history behind it and some call center structures that have been in this organization over the past 12 or so years, we’re using what we’ve learned a long time ago. Running different types of businesses for the organization and translating that to the credit space. [David] Back to the L1 insurance. How did this come about? A lot of people wondering the structure and how you pull this together. Very innovative that you’re using the leverage of the membership, but how did this come about? [Justin] One of the best things about working for a company like AltiSource is I have the ability to control my own destiny and really help the members out and when I took over the origination side of the business I guess it was almost three years ago now. It’s been a while. We were looking at ways we can develop new products and services. And our goal is to launch at least two new products, direct products to our members each year. And we started our credit last year. This year it’s homeowners and flood. But we always have stuff on our roadmap, new products and services roughly a year or two out. And we’re trying to get two new launches a year. [David] Two launches a year, that’s pretty aggressive. [Justin] Two launches a year, so like I said, this year was homeowners insurance and then the flood certification program. Next year we’ll tell you soon, but we have two good products coming out next year. And then we’re already looking into 2027. [David] When you’re looking at products, you’re bringing to market. What are some of the factors that go into what you’re deciding to bring out and when? [Justin] Yeah, it’s s ome pain points from the members and our advisory council, right? A lot of feedback from the advisory council. [David] That’s what I wanted to get to is your advisory council, because that drives so much of what the co-op does. [Justin] Yeah. It’s a think tank for us. So when we look at it, we will rate opportunities and rate needs and we’ll say, okay, what is the barrier to entry for us? What does the cost enter? What does regulatory environment look like, et cetera. So we’ll do an analysis internally on our end. And then. We’ll go and say, okay, what is the ease of use or onboarding for the member and what is the need for the member? And then what is the economic advantage to the member? Obviously we look at our economics as well But again, what is the economic advantage number? so we really take a measured approach on how we’re launching new products and services and we have a great team in the organization that really works with us and gives us the metrics and we go through it and we do our proformas and say, okay, is the juice worth the squeeze per se? And how do we get it launched? And then we have a go to marketing plan, it’s pretty measured. And again, we’re fine tuning it every day. We want to make sure that we’re always, innovative and thinking outside the box and trying to make sure that whatever we’re going to do, we’ll have a highest chance of success. Obviously some things may not be great or successful as we believe, but, we’re trying to make sure that we have the highest chance of success and if we can systematize it, that’s coming from the top of the house here, it’s systematize it so it’s just change the product and work on the marketing plans and the performance. So again, a couple of years ago, we started talking about insurance and we have the LOLA technology, the Lenders One Loan Automation system and that’s really expanding, right? All of our continuing education goes through that. We’ll be launching billing through that and statements and an account center through that for our members in the coming months. It’s not just loan manufacturing. That’s inside a Lola. And it was okay. We get all this data. We have all this data. How can we monetize this with the permission of the members, share the data with us and how can they monetize it and create value? Homeowner’s insurance is a need, right? So when we look at it, it creates an annuity for the organization. It creates value. We’ve had 50 state licenses in property and casualty now for 12 years. We’re on all those states. Forever we’ve had these property casualty licenses and we just never used them. They were sitting on the shelf. We were using them for the loan manufacturing risk insurance stuff because we needed the property and casualty in order to get the surplus lines a uthority. We’ve had them here. Okay how do we use them? What do we do with them? we can go to property and casualty. So it’s not just homeowners insurance. It’s auto as well. So we have the ability to offer that the members will be launching life. Hopefully by the end of the year, just licensing thing, we’ll be watching life soon. We’re trying to really have a complete product offering as much as we can to help our members borrowers create value for the members and give them a distinctive advantage against their competitors. So the borrowers are loyal to them and trust them. [David] Yeah. Ultimately it’s got to be affordable to the borrowers because that’s our customer. So your pricing and I already know this, but I’m going to ask it, what do you hear as far as it relates to the competitive prices to the consumer that are actually… [Justin] Again, when you’re looking at the large insurers, right? It’s Traveller, it’s Progressive, Chubb, right? And you’re looking, at all the large insurers, we have them all, right? So they’re underwriting all. So you can use Logic and say, okay, you know what? If you’re shopping this policy out to 30 different underwriters, you’re going to have a very competitive quote. It’s a good product. It’s a consistent product. Again certain areas, insurance is just expensive. Your competitive quote is going to be competitive, but it’s still a high number. We had a member that priced out their own insurance in the Louisiana area. We saved them $2,000 off their personal policy. It was a significant savings to them. [David] And your members made money and as well as the co-op made money in the process. [Justin] Again, it’s not a rev share, right? You can’t get paid on insurance if you don’t have insurance licenses. There’s a revenue model there for the members, but it’s not tied to written policies et cetera. [David] That’s right. That’s right. There is some regulation around that. You know what? It’s hard to believe that Lenders One has been around for 25 years. That’s a long time. And you’ve been at the helm now for how long? couple of years, three years? [Justin] I’ve been with the organization for five. it might be three and a half. [David] Yeah, that’s outstanding. What’s in store for the future. Give us some insights into where you think this is all going. [Justin] Like I said previously, we’re trying to constantly innovate, right? We don’t want to remain stale. We have a strong financial institution behind us with AltiSource. We have access to capital markets, so we’re just looking to see what we can launch, what’s going to be effective, what the members are going to want, but we also like, at the end of the day, we have bandwidth issues as well, right? We want to make sure we’re concentrating on the things that are going to make us money. We don’t have a ton of employees that can go out and launch six new things at the same time, but more importantly, what we’re seeing with our members is they don’t have the bandwidth either. Right? they can only launch one thing at a time right now because their staffing is down as well. So they don’t have the extra people that are onboarding new products and services and we see that in credit, right? We’ll launch credit or we’ll launch verifications of income and employment, and they’ll only do one of the two. And then once that one is completely launched, then they’ll move on to the next. So again, even with credit and homeowners and fraud, it’s okay it’s a linear path. We’re not running parallel paths with our with most of the members. They just don’t have the bandwidth. They want to save the money as quickly as possible or generate the additional revenue. But they don’t have the extra bandwidth to be able to have an effective launch. So we’re cognizant of that as well, right? We don’t want to overwhelm the members with too many choices or too much going on because that’d be a paralyzed their decision making or their launches. [David] You look at what you guys have achieved and you wonder how much more can you achieve, but there’s a lot of opportunity when you look at the diversity of this market and this market is changing so rapidly. What’s your take on, and the members feedback on AI, AI is just a leading conversation, what are you hearing in your council sessions or your meetings with the members? [Justin] What’s the definition of AI is the first question, right? There’s so many varying definitions of AI. I think everyone understands that it’s coming. We don’t know in what capacity. We don’t know if there’s going to be discriminatory biases in there, right? There’s a lot of different things that AI is going to be able to help us with. I think there’s a lot of companies that are working on it to try to figure out, all this great stuff. I still think it’s probably a little too early. And what segment is this going to start? Like we’re seeing it on the front end of the business. I think we’re seeing it a little bit on the back end of the business, but on the more manufacturing side of the business, it’s still tough. Again, we’re talking about members that are losing money per loan, In order to implement AI, they’re gonna have to spend more money per loan to start. So everyone’s again, delaying if it’s interesting. I equate it to the last financial crisis, right? You came out of the last financial crisis. People were hurting for money. Didn’t have money. Companies were out of business and we saw this great tech innovation, 2012, 2014, 15 in all other industries outside the mortgage, right? No tech companies want them to come in mortgage because they didn’t know what to expect. No mortgage companies want them to start it because they didn’t have the money. And now we’re back in that a little bit, when I look at it, there’s a lot of need. We know there’s a need, but there’s not a lot of companies, great companies coming in and saying, we can transfer, transform your business into XYZ, and then you don’t have a lot of mortgage companies that are saying, Hey, I’m going to dedicate 10 million, 20 million to go create this. You took rockets talking about it, UWM is talking about it, but they haven’t really come up with anything that’s that spectacular either, right? Because unfortunately in our business, we still need verification documents. We study the income and assets. And appraisals. So you’re still relying on third parties. [David] Yeah. This is where some of your partners come in and provide really great value. [Justin] Yeah, we have every verification of employment pretty much out there, right? We waterfall it, we can put it through, you can go the consumer permission base and go instant. So we have all that for our members. And that’s to me the first part of AI, but then when you get that document returned, what do you do with it? How do you analyze it? I think that’s where we need to go. But I also think that at the end of the day, we need to make sure that we’re educating our consumers that it’s important that they put their credentials into their payroll system or for their banking system. We’re not going to steal it. We’re not going to touch it. But that will create much more efficiencies in the loan process. I do think that both, the payroll systems as well as the financial institutions on the banking side really need to come out with, read only credentials that expire. Because you know what? I’m applying for a mortgage. David, here’s a password for you, right? Justin Damela, David123, and it’s good for five days. And it’s read only. You can go in, you can see everything, but you can’t touch it or change it or do anything. And I think once we get to that point, You’ll see a big uptick in the day one certainty products, the single source validation products and a strong increase in customer survey ratings, as well as a decrease in loan process types. But it’s going to take us time to get there. It’s reeducating the end consumer. [David] All right. At the end of the day, it is, we could go on and on about all the great things you’re doing and what you’ve got planned, but one of the biggest things I benefit from that I’m so grateful for is us getting together face to face again, kudos on an amazing conference in LA in March. I don’t think you guys could do better and you keep upping the games, but next year you are majorly up in the game. Talk about where we’re going. And about that event. [Justin] So everyone thought I was joking when I said, what do you think about going to Mexico? They’re like wait, we’re going out of the country? Wait, we’ve never gone out of the country. What are you doing here? And it’s our 25th anniversary. We pulled the advisory council. The registration, granted, we started it much earlier, but the registration numbers are well ahead of where we were this time last year for LA. We have, really a lot of excitement around it. It’s going to be a fun, fun event. It’s going to be super valuable in terms of the content as well. And we’re telling our members, bring your families. Come spend an extra day or two. You’ve been to our conferences we corral everyone and we were altogether the whole time from Sunday to Monday, Wednesday, but Monday night, we usually go off site, we’re not going off site. We’re staying at the resort. We’re doing a lot of fun [David] For understandable reasons. Yeah. [Justin] Yeah, of course. And we’re allowed to do a lot of great fun things at the resort. And it’s gonna be absolutely spectacular. [David] And it’s gonna be in Cancun. What resort again? [Justin] It’s at the new Hilton. It’s only been open for about a year, It’s a beautiful resort. we’re gonna have a ton of fun. We really are. [David] Yeah. I am very excited about being there. Thanks so much for coming on and joining us on the podcast today. It is again, kudos to the growth under your leadership and what you’re doing there. Very excited to be a member. And again, I love all aspects of it, but the conferences are the best. it’s a getting together with everyone, seeing everyone. It becomes like family after a while and everyone says, yeah, but is it easy to get in, start making the number of new first timers that were at the conference in March, there was a lot of first timers there and they all walked away with the same thing. I feel like I’ve been a part of this thing all of my life. I’ve seen people I’ve known, but now getting in deeper conversations. So it’s really powerful. Kudos to you. [Justin] Thank you. I started as a member, right? [David] I know. I remember that. [Justin] I experienced the value. I know what the value is and I always admired the organization. So when the opportunity came, I was not going to say no. [David] Yeah. I advocated for you to get in there going from member to the get inside, [Justin] I appreciate it. All the kind words you always give. So thank you. [David] You’re doing a great job. Keep it up. Good to have you with us. And then Look forward to seeing you in Cancun. If not sooner, I will see you at the MBA Annual I know that. [Justin] Yessir. By the way, we’re having a party at Sunday night is our standard slot. So we’ll be hosting a party, more details to come, but we’re finalizing it all now and it’d be another great event. [David] It’d be a wonderful time. Good to see you. Congratulations to your whole organization. Great group of people. Truly appreciate it. [Justin] Thank you, sir. Be well. Bye bye.Important Links
Justin Demola, CMB, is President of Lenders One and Senior Vice President, Origination Solutions, for Altisource.
As president of Lenders One Cooperative, Justin leads its day-to-day operations and strategic execution. With nearly 30 years of mortgage, consulting and business development experience, he brings extensive leadership know-how to the role. He joined the organization in 2019 as Vice President, Sales and most recently served as Managing Director.
Before that, Justin served in prominent positions at several independent mortgage banks, including Chief Operating Officer of MLB Residential Lending, LLC and President of The Hills Mortgage and Finance Company, LLC. He is a licensed mortgage loan originator and Certified Mortgage Banker (CMB). In addition to his responsibilities at Lenders One, Justin serves as resident CMB instructor for the Mortgage Bankers Association (MBA)’s CMB Final Prep Course, where he shares his insight and support with current students. Justin serves on the Mortgage Bankers Association of New Jersey Board of Directors and is a member of the MBA MORPAC Committee.