Matthew VanFossen discussed with David Lykken the NAR Lawsuit and how it affects Real Estate Officers and Mortgage Loan Originators. He also discussed their ways on how to get business while the market is off.
Challenges facing real estate officers and loan officers due to ongoing changes in the real estate industry with Matthew VanFossen of Absolute Home Mortgage
Listeners, excited to have Matthew VanFossen. Am I saying that right?
You got it David.
CEO of Absolute Mortgage Corporation, Absolute Automation Technologies has dedicated 20 years to the mortgage industry pioneering the way loan officers utilize Encompass. I can’t wait to hear about this. That’s an older system that’s being replaced by so many new systems, but he’s found a way to make it work. He has developed the big point of sale, a cutting edge web based system. It’s innovations that make him a prime target for the housing wire trendsetter. Also Matthew serves as the Vice President of the Community Home Lenders of America, the National Nonprofit Association for small and mid-side community based mortgage lenders that promotes federal mortgage programs, rules, regulations, which treat the community mortgage bankers and mortgage lenders fairly. So excited to have you here, Matthew, appreciate you being here. And we’ve had some time talking before as I get to know you. Listeners, this guy’s really articulate talking about where the markets are at, love to get another perspective. So welcome to the podcast, Matthew.
Thanks, David excited to be here excited to discuss the trending issues in the industry today. Hopefully we’ll be able to get some solutions for the listeners. What do we got? What are we looking at?
First of all, I for those that do not know you, Matthew, if you could start off by telling us a little bit about yourself and how you got to where you’re at today?
Sure. Thanks, David. I’m a 20 year mortgage industry veteran. I started as a loan officer right out of high school early on in the early 2000s decided to open up my first mortgage brokerage, built that business up sawed through the 2008 crisis. We then merged with Absolute Home Mortgage, which is an independent mortgage banker, and I started getting into banking. During this whole time, I’ve always loved innovating through technology, technology was always my forte, throughout my education. And I always saw an opportunity in the mortgage industry to mix operations and technology together and innovate. I’ve always loved the mortgage industry because of the opportunity to advance your career and the ability to really help influence others and other businesses, promote advocacy. I get very involved through CHLA and different housing policies. And a lot of people always ask me, dude, how do you do so much? How do you run CHLA? How do you do your New Jersey MBA stuff? How do you do Absolute and then you have the technology company on top of it, I say when all the businesses are reciprocal, the CHLA and Washington stuff helps me keep an ear to the street to what’s going on and what the problems are today are. Absolute lets me be in touch with my loan officers know their challenges on a daily basis. And then a technology company allows me to write solutions for all of it. So it actually becomes pretty simple when you realize that when you’re sitting at the top of all of them, and you can use each one as a benefactor of the other, it actually balances itself out.
I agree with your perspective. And I’m thrilled to see that yeah, that’s balanced, see a lot of moving lights, and it can feel like spinning sticks on a stage. But I think it’s really important that you bring the interactivity of how one serves the other. I think that’s really good. But that gives you a unique perspective on the current state of the mortgage lending industry. And I want to get your perspective, especially from the Community Home Lenders Associations perspective, what you’re seeing and what you’re hearing from them, but also as it relates to the recent lawsuit against National Association of Realtors. And what are some of the industry trends that you see coming out of all this?
Yeah, so there’s a lot going on in the industry, CHLA tries to stay ahead of a lot of it. So, when we’re talking about the NAR issue, we have to really be concerned about this and really monitor it closely. I’ve been on top of this issue for almost a year now since last April, when the lawsuit got certified as a class action. I was raising the red flag and saying, Hey, we need to really look at what’s going on here because what affects buyer agent commission has counterparty risk. Where do loan officers get their business from? They get their business from buyer agents a lot of times so what may affect their commissions has a direct relation to affecting independent mortgage bankers and affecting loan officers. And it was a very cautious thing that we had to take it CHLA of how to navigate and where we really wanted to figure out what policy we wanted to recommend for the industry and go to Washington with, so we said okay, let’s dissect this. Let’s look at a couple of issues here. We believe that if sellers start adapting and they don’t want to pay buyer agent commission anymore, okay, and that’s what a seller of a home is going to say. What then might happen, buyer agent commission may be reduced, that may cause them to look elsewhere to try to fill that gap. One concern that the industry has is if you go back 12 months ago, FHA released a mortgagee letter that lifted something called the proxy, which was the dual comp proxy that a real estate agent could not be a licensed loan officer and a licensed real estate buyer agent on the same transaction. And they came out and said, Hey, we’re in parity with the GSEs. On this, we’re okay with it. Where that relates to the lawsuit and some concerns that we have is that we may see an influx of real estate agents becoming loan officers and doing dual representation. So, when that comes into CHLA policy is we put out some guidance that we said, let’s look at this for a second. There’s two key points around licensing here. One, we don’t think it’s a good idea that a listing agent should represent a buyer’s mortgage. We don’t think that’s good for a consumer, that’s somebody that’s selling a house knows the max affordability, max debt to income, max disposable income and max disposable assets of a person trying to put an offer in the house, that’s a conflict, and right now, there’s no regulatory guardrail that would stop a listing agent from representing a buyer’s mortgage. We have a lot of concern about low to moderate income and underserved areas and how that can be leveraged against certain individuals. So, that’s one thing that we recommended. The other recommendation is that real estate agents have to pass the NMLS test. One way you can get around passing on NMLS test is being an NMLS registrant going working for depository institution, we feel that there needs to be a barrier of entry. If a real estate agents could come into this space and go get their lender license, go get their MLO license, we want them to make sure that they can’t use the NMLS registrant system to bypass the testing requirements. So there’s another recommendation we put it. Just a couple of other provisions we’re working on to David that really puts good consumer protections in place. We’re not really for financing the real estate agent commission, we’re starting to see a lot of lobbying Washington come out that the buyer agents are looking for vehicles for consumers to finance this commission. And we just don’t think that’s a good idea. We think that that’s not good for low to moderate income borrowers, which is who IMB served. We’re the number one servicers of the underserved community. And when we look at the average real estate commission for a buyer agent being about $10,000, we say we don’t think that it’s a good idea to have a vehicle to finance that we’d rather see the free market take its place and let consumers decide what a okay price point to pay a buyer agent is. And there’s a whole bunch of other stuff that they’re working on too. But as far as that NAR lawsuit is concerned, that’s really the policy stuff. Now, what do we hope for, we hope for not much is going to change, I think that this is the most likely outcome, we really think is going to happen is it’s going to be a disclosure issue. That when you go to sell your house, you’re going to be presented with a listing agreement. And it’s going to have two columns, buyer agent commission, listing agent commission, and a seller is going to ask their listing agent, why would I pay the buyer agent commission, the listing agent can simply say you want to sell your house for 400,000. If you don’t do a buyer agent commission, the first offer I get for 400,000, that’s good, I’m going to take it because I did my job. The funny part is sellers, they list for 400. But they really want to 425 or 450. Right, even though it is listing for 400. So, what the listing agent has to say to them is if you want to try to have an opportunity to sell over listing price, you need to offer that 2 or 3% buyer agent commission that’s going to offer more price competition that’s going to get more people into the market for your house, see it more and hopefully get that house over bid. If that happens, and sellers see value in buyer agents still, then I think it’s going to be business as usual. Business as usual, is a good thing for loan officers.
It’s business as usual in the sense that there will still be a buyer’s agent, and there’ll be a seller’s agent in that sense. What would you say to those who would argue why are you advocating we not have that financed in the financing, which is really what we have going on right now. If nothing’s changing, we have both the seller Commission and the buyer commission financed in the deal. Did I understand you correctly you’re saying we’re gonna go to cutting the commission down to 3%. We’ll finance that through the purchase of the home, but not the buyer’s agent. That is not business as usual. It would seem to me, so I want to get clarity and what we’re especially CHLA stands on that currently the financing of the of that especially I know that’s initiative of NARS. So reached out to Fannie Freddie to try to make sure that the buyer agent commission is financeable still, as it has been. It could be argued that it has been.
The argument is that it’s packed into the purchase price of the house. If I sell my house for 400,000. I’m paying a 6% listing fee the buyer agent fee is inside there. Question is to argue against that is a list a seller that’s now paying 3% going to sell their house for 3% less Are they still gonna list it for 400,000, because if they still listed for 400,000, then it’s actually not included in the deal. And that’s why they’re saying the financing is incorporated in. But I have a couple other concerns about financing it, let me explain, it’s not going to be included in the price of the house, it’s going to be a separate line item paid directly by the buyer to the buyer agent with potentially an option to finance I have two problems with the option to finance one is total points and fees. I don’t want to see this real estate agent commission, the historic going down the calculation of high cost of total points and fees of QM because that knocks out the rest of the fees, that’s one concern is that now it’s a fixed cost or even treading into the cost of APR. So we have to be very careful about saying, Oh, we’re going to be financing this commission, because that can come into our fees calculations. The second part of that is straight cost to the consumer, if they’re now financing an additional $10,000 over the life of the loan, that real estate agent fee when you amortize that over a 15 or 30 year mortgage might be three or 4x that they’re paying. And what you’ll have is you’ll have some consumers that are more affluent and financially stable, be able to pay this fee out of pocket. And then you’ll have other consumers that don’t have the out of pocket expense to be able to pay it up front bill to finance it, which puts them at a disadvantage. And I would like to see a more level playing field. So that’s why I’m hoping for business as usual, which would not regard the financing of this feat.
So again, clarity is before the lawsuits, it was financed business as usual moving forward is the buyer agent would be excluded from that. So it’s a slight departure from business as usual, is just get clarity for our listeners. They’re sorting through that Is that am I getting that right?
So business as usual, is know that the seller still pays the 3% fee. Right? The seller sees the value. They’re still building the fee until.
They build it in for the buyer when you’re saying the 3% for the buyer. Yeah, okay. I think that’s what’s being modeled out already up in the Pacific Northwest, already is things have not changed to what many are more and more people are saying it has changed. What really is surprising to me. Matthew is the fact that the National Association of Realtors has not done a blanket settlement on this, which keeps the door open. For more and more lawsuits happening that is befuddling to me. Why would they not race to a blanket settlement, which seems the plaintiffs have all said they would be open to any insights on that?
I think they think they have a great case. And that’s what it is they genuinely believe in the construct of the real estate transaction. And they believe that it’s the most beneficial to buyers, by having this fee packed in and they think that they can win. And that’s why they’re keeping buttoned up on it because they have other pending litigation in the wake of this. They can’t make further public statements, because that could rack up additional liability. And they think that through the appeals court process, that they’re going to be able to get this overruled, and it’s going to stem these other lawsuits, they’re going all in on it.
So they’re really doubling down on we’re right, you’re wrong. So we’re gonna get an appeal done. And so that it gives me some insights. And by the way, I thank you so much for dwelling on this, you’re very articulate on this, you obviously have spent some time studying it. One thing I want to continue on down this line of thought is the dual agency, more and more real estate companies are saying you cannot be the listing agent and the selling age those two cannot be dual agency. And then you add the mix of Realtors having the ability to become a licensed mortgage loan originator MLO. That’s almost like dual it’s like triple agency where you have dual agency. Yeah. If you look at all the opportunities, and there’s lots of opportunities for conflict, which I think is going to open up the doors for more lawsuits in this area. And there’s it’s fraught but I want to just get, again, your perspective and CHLA’s perspective on this the dual agency, where do you think that’s going more and more realtors are moving away from and seems like the Department of Justice is really zeroed in on this dual agency in the sense in addition to dual agency be defined as the listing agent and the selling agent being one of the same. It seems like DOJ is really focused in on that, Thoughts and reflections?
So I think this is funny because it’s actually tied together. But it’s not right. A lot of the real estate community has now been talking about dual agency again, when this has been a highly disputed ethics for the past 15 or 20 years. The agents have been debating this so why is this coming into play when it really wasn’t incorporated in the litigation of the lawsuit? So the only thing I can think of here is maybe they’re using it as a vehicle to protect buyer agent commission. Okay, we’re saying hey, maybe if we give up the dual agency thing we can protect buyer agent commission because what they might be scared of is that savvy seller scenario where the seller goes to the listing agent, hey, I’m gonna pay zero to the buyer agent, right. And this is what I need you as the listing agent to do, I don’t need postcards, I don’t need open houses, I don’t need magazine ads, I need you to take a couple pictures and putting it on the MLs or 3% and you feel the buyers and you do dual agency if you want my listing, and the listing agent is fielding the buyers directly. So, what I’m thinking is going on is the reason that this has been re-entered into debate amongst the real estate community is it makes logical sense that they’re saying okay, we may have to give up one of these two, I’d rather give up dual agency, then give up the whole buyer agent construct system, let’s keep the two sides of the deal separated.
It’s so fast, we could spend a lot of time on this topic because there’s a lot of woulda, coulda, the bottom line is it is yet to be determined. We’ve got the appeal pending and we shall see. I’m probably landing with you more that at the end, after all the dust settles not much is going to change in this and what is going to do is require especially the agent that represents the buyer to up their game on representing what their services are. And then who finances it, how it’s handled, that all remains to be determined. We got to have you back and we’ll continue to monitor this because you obviously got your finger on the pulse of that. Let’s look beyond the immediate impacts of the National Association of Realtors lawsuit. What do lenders and loan originators need to do to succeed in the future, especially given the changing landscape? You again, you as originator? Certainly, have your perspective. But again, collectively, from a CHLA’s perspective, love to get your thoughts.
So I’m gonna actually talk about absolute and how we look at things that are mortgage company from this landscape and you said an important word, change. Historically, originators are not the best to change, right? We have a lot of talk about change management, right, it disrupts the norm of their lives. And we see that it takes us a little bit to adjust. And that’s my best recommendation I can have for an originator and operations employee, or even a senior executive leader is, embrace change. Because now is the time to change. Now’s the time to adapt. If your phones aren’t ringing, and there’s nothing you can do to stir up business. What are you doing wrong? Where can we innovate? Where can we actually say, okay, now’s the time to achieve our goals. Like internally in our company. We’ve revamped, we’ve used this opportunity where we’re not going crazy with loans and underwriting and have 1000 loan backlog of underwriting like we did in 2020 and 2021. And we’re saying, Okay, how do we hone in our systems? How do we revisit our policies and procedures? Where do we find efficiencies, and you have to do this on a daily basis, because the adjustments you made three months ago, need to even be revisited today, you have a lot of changes going on. At a very fast pace, you’re looking at another FICO fee increase 12 months after we just saw one. So we made all of our adjustments over to soft poles last year, and a lot of companies who did with soft pole system, and now they’re in charge of now they’re increasing soft poles by $11 on average, a soft pull credit report, which could see for a midsize IMB a fee increase of over $100,000 a month. So, if you just last quarter, adjust to your business, maybe did some cost cutting measures, immediately at the beginning of the year, in the middle of the winter, when originations are historically down, you’re gonna get hit again. So, you have to keep your finger on the pulse of these industry changes, you have to be overly managing your business, and you have to adapt. Loan officers may have to start asking for credit cards again, when they go pull process credit, everybody’s standoffish. And who’s the first that’s going to do that 10 years ago, that wasn’t that uncommon, that a loan officer asked a consumer for a credit card, and that’s when credit reports were 12 bucks for a trimerge. Now you’re looking at a 50 or $75 trimerge fee. And the other thing, David, that you’re looking at with that credit issue is now it’s 10 to 1 where it used to be four to one, we use a for pre approvals. And for tri merge credit reports resulted in a closed loan, now you’re seeing 10 of those. So 10 opportunities 10 try merge credit reports might only result in one closed transaction because of these inventory shortages. So, it’s stuff like that, that when you’re managing your business, or if you’re a loan officer in the street, you have to embrace these changes, and you have to adapt to the climate because if you can’t do that, then you’re not guaranteed to survive this. And the one thing I can tell you from my experience in the mortgage industry hands down is every time it goes down, it comes right back up afterwards. And what happens is everybody leaves and then they rush to get back in and then they missed the boat because they got to reactivate their licenses and everything. So, if you’re serious about this career, if you’re serious about this industry, hang in there, it’s been 12 to 18 months so far, you probably got another six or eight ahead of you. We already saw some good signs and indicators with rates this week. It’s like Christmas came early. We’re coming over the event horizon now. So, we just got to hang in there, keep embracing change, keep adapting, work harder for less. And I think we’ll see some success.
Yeah, we’re recording this for those listening and saying, Okay, it’s, it did it. When did this happen? What are we recording, as we’re recording this on Friday, December 15. So, we saw a nice rally. And that’s what you’re referring. So I want to put a little time concepts on this. So when we’re listening to this air, we don’t know what’s going to happen. By the time this airs we could see might go the other way. Right? It might have gone the other way. So about make sure everyone understands that one of the things that we have seen is tremendous amount of change what seems like a tremendous amount of change. When you look at measure change in technology, or in the mortgage industry, it moves at the pace of a glacier, it’s just so slow. But we have seen some significant change, constant change coming in the way the business works. What tech do you see being a major game changer in the lending process moving forward?
I think that it’s all about point of sale in the tech game, right. And this is why I decided that was the sector that I wanted to bring my business and my skill set into. And I’ll explain. For years, we looked at our LOs system and compass and we said, oh, let’s go remove every click that we can let’s create as much efficiency that we can in the back office, and we did a phenomenal job. And we have one of the most tweaked Encompasses in the industry. It’s pretty fast for the system. And we have always had a great strategic relationship with LMA and now Ice mortgage technology. But I started to realize about five or six years ago that it was adapting, I looked at as an executive of mortgage company, where do I get my business from? And where does my business live? It comes from my loan officers, our referral partners and our clients. And it just so happens that all three of those individuals live inside of a point of sale system, your front end web interface, like you said, change happens at the speed of a glacier in this industry very slow. But if we go look at one of the biggest changes over the past 10 years, it’s been the adoption of online applications and the online consumer experience. Loan Officers migrating from taking phone applications over to sending their web link and having a borrower apply online. And even if we look at outside of our industry, if we look at our other industries, we look at the airline industry, we look at the fast-food industry, things have moved to self service terminals. When you go check in an airport. Now David, you go up to a kiosk to go and scan your ticket or print your boarding pass, you don’t go to the counter to do it anymore. You go order a sandwich at McDonald’s and you walk in and you order it on a kiosk. So we look at this and we say well, consumers are moving to self-service, they wanted to have more power lenders need more technology to create efficiency. Our referral partners also need this type of technology for us to win over these accounts. And point of sale is what embodies that user experience. You need to invest in really know what is your first impression of your customer like, okay, that’s your first shot, what’s your online questionnaire look like? are you handing them a book report to do to get into your company? Or you handing them a streamline user interface that’s really simple and self explanatory that gives them a whole bunch of options of how they want to apply? Do you want to call me and do a phone app? Do you want to schedule a walk-in appointment? Do you want to do 100% of your application online? This is the type of software and technology that’s being built now. Whereas the first generation of point of sale, it was really impressive just to take an application online. That’s no longer that impressive. Now it needs to be done is, do you have automated self service terminals? Can you go put a kiosk inside of one of your real estate offices? So, when you’re not there, okay, that kiosk is there that’s going to take an application for you and go right to your mobile device. And you can write that preapproval mobile because if you’re out of sight, you’re out of mind to your real estate partners. Are you going to be able to train your real estate partners on new ways of technology for you guys to collaborate inside of the CRM space. Real estate agents haven’t been the best data aggregators and loan officers have to always chase them down for business, where we’re going and especially with the NAR stuff going on, is we’re actually looking at CRM technology that correlates with our point of sale technology that allows loan officers and real estate agents to collaborate on leads together using kiosks for Open House check ins to collect all the leads to replace sign in sheets, giving both loan officer and real estate agent full transparency to each other where they can collaborate and convert those leads together. If we can innovate, and we can design and implement technology like this that’s going to lead to the next generation of mortgage technology and The real estate transaction.
Yeah, I think when you look at kiosks, there’s no question we’re seeing an explosion of those. I did a lot of flying, I still go to the counter, because I’m a preferred flyer at this point. So, I still get that special service, which really goes to the loan officer, the role of the loan officer moving forward. Certainly, buying a house is more significant than buying a burger at a kiosk or getting an airline ticket. What is the role of the loan officer in the future? In light of this technology? Is it going to be more where the loan officer should be working more the relationship side of unless the details side of it? Is that what you’re saying?
Actually, I agree and disagree on that. So, let’s look at this right technology is going to be able to automate and streamline easier transactions. If you have a rate and term refinance 50 LTV with an appraisal waiver, sure the loan officers role is going to be diminished in that transaction, it’s going to be mainly relationship driven, where they’re driving the client to their website, they’ll be able to use day one certainty technology to do pull in their bank statements, pull into their pay stubs, they’ll be able to use systems like Halcyon to validate their tax identity now, and you’ll get day one certainly reps and warrants and you’ll even have an easier underwrite on that. But I still think that the detail role of a loan officer is going to be more prevalent than ever. And the reason I say that is because I’ve spent years coding technology for mortgages, and every single day, I still see new variables that have not been crossed before loan officers are masters, and the best loan officers are the ones that have actually messed up the most amount of deals sometimes because they learn and they say, oh, never gonna make that mistake. Again, when you look at these highly complex transactions, you have a multifamily FHA loan with four borrowers on it, you need that brain behind there. So I think you’re gonna see a segregation of different types of transactions where loan officers roles are a little bit different. They’re definitely going to have to do it by volume. I do see that in the next 10 years, compensation will probably be reduced. As technology continues to automate.
That I hear you say that because I want to underscore that mortgage loan origination compensation will be reduced in the future.
I do believe that over the next decade, yeah, you will see reduction of compensation.
Okay, good. I want to make sure that’s clearly stated somewhere, and I’m gonna duck warmly received that. But certainly that has been one of the biggest factors in the cost originate, we’ve got to reduce it, if we’re reducing on the operational side, correlating the other side of the deal, which we’ve got to focus in on that side of it has to be addressed. So I hope you’re right in the sense that where, where I hope you’re right is technology helps you do more deals, so the income actually goes up. But the cost per commission per deal drops. That’s what I really think is the real deal.
Compensation should increase on a volume basis, because it should be easier for a loan officer close more loans option of technology, but the per transaction compensation may go down just bid driven bond market factors.
So we’re both in agreement, we want loan originators making great money, we’re not advocating that originators make less money, it’s make less money per transaction, but do more transactions and make great money that way.
Same on the real estate side, too, I think that we have real estate agents and loan officers provide tons of value of the transaction. They’re the emotional firewall for our consumers to get these deals closed. And that’s something that technology can never replace.
I agree 100% agree with you that technology, there’s going to always be a relational component about this biggest transaction. At the end of the day, I want to look at the eyeballs of a breathing human tell me that I’m making a good decision, even though their recommendation may be slightly conflicted because there are to be a commission out of I still want to see them say this is a good deal. This is a good loan program for you. Something that you’ve been writing and talking about is something you refer to as the savvy seller, I really want to get into understanding what you mean by that. And there’s a natural evolution that’s happening in the housing market. What did you mean by the word savvy seller? And what does that mean for lenders moving forward?
So savvy seller it goes back to the NAR issue is what if it’s not business as usual? What happens if a seller or a consumer in that regard is influenced by different types of data? I like to make a joke that all it takes is a couple Instagram reels or some Tiktok videos to say hey, did you know when you’re thinking about selling your house, you can save 3%? How do you do that when your listing agent tells you to check the buyer agent commission. Don’t do it because you’re not required to anymore. And all it takes is that to motivate some price conscious consumers to try to save money when they’re selling their house and then that leads to all the trailing counterparty risks that we were discussing earlier. Buyer agent commission gets reduced could cause them to have price competition internally, where when you go look at real estate agents, especially buyer agents, the few have the most amount of transactions, not the many there’s almost 2 million real estate agents over a million of them do zero to one transactions a year. So when you go look at that, and you have a subset of buyer agents that are highly successful, and they’re saying, Well, I’m used to making 3%. And then you have a larger subset of buyer agents that say, Look, I’ll take anything I can get, I’ll do the deal for $2,000. I’ll show you the house and book the deal for you. You might see price competition. And you might see where the savvy seller scenario by them not offering buyer agent commission starts now treading into these buyer agents, it might cause buyer agents to work for less, which then could cause them to tread into that loan officer territory and we get back to dual comp that. So it’s like a big circle.
When you talk about savvy seller, we have a lot of hopefully for a lot of first time homebuyers coming into the market, would you put savvy sellers in that context as well?
No, I think.
In first time homebuyer and are they considered savvy? Right?
It’s not that a first time homebuyer is not considered savvy. It’s the preexisting homeowner that’s maybe done one or two transactions before that underneath there. So they’re going to be more savvy. They’re going to be more savvy, and they’re going to try to look for a cost savings when selling their house. And they might cut out the buyer agent commission to do it.
Good. Yeah, it’s great perspective on this love your perspective. Your great guests. I’m really pleased with the perspective you have. And it’s the last question I’ve got, as we look at the time, it’s, I could sit and visit with you because it’s fun to have the dialogue on and there’s a lot of points I want to go back and revisit. We don’t have time. But I want to finish up with this one. What is the one thing every real estate agent, loan officer and housing consumer should know about the way our industry is evolving, and it is evolving? Finally, one thing what’s Gary Keller wrote, I got Gary Keller’s book up here that it says the one thing it was a great book I like what’s the one thing but there is a concept of what is one thing that we should be focusing on.
Consumers have the choice, you can have the choice to use you or not use you, right, consumers have the choice to pick you to do their mortgage, consumers have the choice to pick you as the buyer agent, consumers have the choice to pick you as the listing agent, you have to now more than ever, your influence, okay, and show that highest level of service standard. If you want to be a true professional. Putting 50% energy in, it’s not going to cut it anymore. Because like you said, everything’s changing. You have to be serious I do you think that the roles of part time agents part time loan officers are going to be getting getting diminished more, because the transactions are so much harder. The industry keeps on changing at such an alarming rate that some people are going to put their hands up and exit and say. You know what, I can’t take it anymore. But the ones that stay, the best shot you have at staying is focusing on your customer, right? Staying in front of them staying on top of them whether they’re a prospect or a closed loan. Do you know how many loan officers miss out on an annual review, you should be on the phone with every person you’ve ever talked to with a mortgage. And that should be discipline every month, you should look at the past 36 months of loans you closed and you should be making let’s say you close five loans a month money on average, that’s 15 phone calls a month you should make just touching base. Hey, it’s Matt from Absolute Mortgage right? Just touching base. It’s been a year or two since you closed, let’s do a financial review what’s going on? Do you know anybody that’s also looking to buy a house you know anybody needs to refi you have to go and extract information out of your database, David because we were in too long, buddy. Our phones were just ringing for two years we pick up and there was a line of people waiting to talk to us. It’s not like that anymore. You gotta go.
I did an interview with Garrett Locklear another top producer like yourself and he says loan officers ran around with a net just the loans are falling out of the sky. That’s not sales, we’re back to the point where we need the professionals that are committed to doing the industry. But we are a boom bust cycle on that from a CHLA perspective. We bust we’re just coming out of a bust cycle with the 10 year dropping as it has today. And we’re hoping that will continue you to at least continue that trend wise move lower. That could mean that we could see ourselves back into some boom business. What’s your perspective on those that are opportunistically coming in? And harvesting like a sharecropper when they come in when it’s harvest time and then they move on to another industry? When it’s not invoked to be in the business? What’s your thoughts? Do we need to regulate them out more? Do we need to set a higher bar, thoughts?
I never opposed to somebody joining the industry right if you choose to go out and come back and that’s your choice. I’m more of a don’t get too high in the high to get don’t get too low on the lows and try to find the median through all of it. That’s my personal choice. I do see some loan officers exit and come back in but they’re going to lose opportunity along the way. Because real estate agents you know what they want in a business partner consistency, David and when you’re coming back in others are coming back in to see You’re gonna lose a lot of opportunity on your ramp. And a lot of times like the last cycle, by the time you get back in six or 10 months has passed, you might only get the end of the transaction. So you got to stay prevalent, right? And when you talk about CHLA, what we’re looking for throughout all these cycles is something very consistent reduction of regulatory burden for independent mortgage bankers. When you go look at an independent mortgage banker, think about how many regulators we have, if my company is licensed in 35 states. So I have 35 state let regulators I got FHA, I got Fannie and Freddie, I got FHFA, I got VA got USDA, right. It just goes on and on. And we might be under 10 consistent audits at any given time. What we’re looking at is saying, Hey, let ISPs do their thing. There is no systemic risk to the banking system with ISPs. If an iamb exits the market, a new one opens up tomorrow and fills the gap. We’re not holding deposits. So we’re constantly in our regulators offices, we’re constantly reminding them, hey, look at who independent mortgage bankers are. They serve the underserved communities, they’re the ones that are lending, right? Let’s not intrude on them and start putting crazy CRA regulations in place. These rabbit holes, let’s let them bob and weave and actually serve the community. And that’s what they’re there for. We don’t need to be over regulating them.
So, as we wrap this up, let’s go in and give you an opportunity to give a shameless plug in for CHLA. We have the Mortgage Collaborative, which is a sponsor of our podcast, we have Lenders One which is a sponsor, both of those are coops. We have the MBA that’s a sponsor for the podcast, so we value all of them. But why should someone also want to join CHLA, or the community Home Lenders Association, CHLA.
First Lenders One, TMC, The Collaborative, they do an amazing job. If you’re looking at great networking, right, you’re looking at really getting good feedback to make sure it’s not too lonely at the top and you share ideas with other executives, these are great organizations. Same with MBA, MBA is a phenomenal advocate for our industry, right? Pete Mills and his team does amazing work. I work closely with them for years, but CHLA is just a little bit different. CHLA is more grassroots, it’s boots on the ground. If you’re somebody that wants to be involved, wants to have your voice heard, you want to go meet these policymakers, you want to walk into FHFA and have your voice be heard. That’s CHLA is. It’s a small group, but it’s definitely has some very aggressive initiatives. It’s fast paced, and fast moving, we can take on a brand new topic. And without kind of multiple layers of approval processes. We can have presented to the membership group and say yeah, this is an initiative we wanted to take on. And within hours, we’re acting on that drafting letters and getting it into policymaker administrative offices, if you’re a doer, if you really believe in this business and you really like to advocate. That’s what I tell you. It’s now somebody to get involved in CHLA because it really makes your voice heard.
Matthew VanFossen, I’m impressed. You are a busy man with all that you have your hands and fingers into. Kudos to you. I love finding professionals that are committed to the level that you are. It’s been great to have you on the podcast. We’d love to have you back. I’m really impressed. We could spend an hour on each one of these different these topics that we went down today.
Whenever you need me back, I am totally down to come back. We just got to find some time in the schedule. But we can talk about any topic around real estate technology or mortgage or regulation. And I haven’t got time.
Great. Have a Merry Christmas, Matthew, I appreciate you being here and Merry Christmas to all of our listeners as well. Thank you.
And listeners, this hot topic would not be possible without our sponsors. I want to say a special thank you to our sponsors Total expert, Finastra, Byte software, Lender homepage, Angel AI, Truv, The Mortgage Bankers Association of America, Lender Home Page, The Mortgage collaborative, iEmergent, Modex, Mobility MMI and knowledge Coop. There’s so many good sponsors here and we’re so grateful for each one of them. Be sure to check out each of those sponsors and their spots on our website Lykken on Lending under the sponsorship page. Thank you.
Matthew VanFossen, CMB, CEO of Absolute Home Mortgage Corporation and Mortgage Automation Technologies, has dedicated 20 years to the mortgage industry, pioneering the way loan officers utilize Encompass. He developed The BIG Point of Sale, a cutting-edge web-based system. His innovations make him a prime candidate for Housing Wire Trend Setter. VanFossen also serves as Vice President of the Community Home Lenders of America. A national non-profit association of small and mid-sized community-based mortgage lenders that promotes federal mortgage programs, rules, and regulations which treat community mortgage lenders fairly.