[David] Technology, Allen, is a big part of what’s going on right now as we’re watching it drive. I love that movie, the AI doc, How I Became an Apocalop- Apoco-optimistist. Optimist. I can’t say it. That’s funny. It was… I thought it was a great It’s a tongue twister as you listen to it. But there’s so much, but it really talks about in technology, we’re in a world where you can form an opinion this, we’re at the end. Which is where that movie started, and then he went in, started talking about to the, optimists, and then he went back and say what is this?” Where’s the balance in that? It was a really fascinating discussion. So I thought of you as I- watching that movie. The AI episodes of- Thank you … are really good. Encourage people to listen to those, by the way. That’s a little-
[Allen]I don’t think we’re at the end. That’s the good thing.
[David] But- I think we’re at the beginning of pr- probably what I think some of the most exciting days. I’m more on the optimistic side. There is no- Absolutely … apocalyptic,
[Allen] Yeah, there’s all, kinds of fun stuff going on Absolutely And as a matter of fact, AI just as we know it’s not perfect. Here’s a funny one. Sam Altman, everyone knows who he is. He asked GPT 5.5 to plan its own launch party. The AI said, ” Hold it on May 5th. Keep speeches short. Have the humans give the toast and do not make me give one myself.” So Altman called it strange. 8,000 people tried to get in. 200 made the cut, chosen by the AI itself, optimized for people who can make the Codex Internet feel real. So the AI planned its own party. Here’s the funny thing, David. Walking around the MBA floor and talking to people Everything is about AI. Even the conversations that aren’t about a tech vendor are about AI. Everyone uses GPT and all the other models, everyone’s comparing them. It’s just a part of our lives now. So I think we have to get over the fact of saying it’s gonna take over, how cool is this, and we start to figure out ways to blend it in with our lives. But the compliance is coming down strong and it’s not gonna last for a, long time, meaning the openness of just everyone and everything taking it and playing with it, right? Everyone’s talking about governance, the ability to truly understand who is the vendor we’re working with, how is the data and the AI being used, and I got a couple points on that that I’ll get through today. But I will tell you back on the last comment right before you came over to my segment, check this out. This was in the Chrisman report on Friday, and it was through Deeded CEO, Reuven Gorsht, if I pronounced his name right, and he said, “Your next borrower may send their AI agent first.” Yeah. And what he said is this exactly. Here’s what no one is talking about. The premise is borrowers are starting to delegate mortgage shopping to personal AI agents like Meta’s Muse, and those agents are building lender shortlists before a loan officer ever even enters the conversation. Wow. So the question this raises to all of us as an industry is who controls which lenders get on that shortlist? Could advertising shape AI recommendations? What does a lender need right now to be a lender that AI agents actually work with? Now, here’s something interesting, and I’m gonna pause for any feedback I recently launched Senzi. We worked with some PR folks. One of them is a gentleman in the mortgage industry, Joe Bowerbank. Joe specifically- Oh, yeah … said that doing old school press releases, which we did, actually helps drive the information that feeds into the AI systems. Forget Google, forget Yahoo, forget all those. You’ve gotta get stuff done that the AI agents are reading. So we flipped everything about SEO on its side, and now the goal is to get into these AI agents. I’ll pause there for a sec.
[David] Yeah. that’s a great point, Allen, because Pavan, who we do the AI updates with, has now been able to confirm the things that we talk about in the AI update make it into the AI engine. So we’re averaging 50 to 70,000 listens per day of our podcast. How much of that is AI listening versus, Right an industry participant? So he tested it, and he put some information out there, and then he went and started searching for it, and it brought up our podcast, that segment, within a very short period of time. Where this is all headed when it comes to what is AI, what is the source of the AI information they’re listening to. Fortunately we put out good content. It’s trustworthy. But Mr. Kittel, you got a thought on that.
[Kittle] So what you’re telling me is we need to develop relationships, but with AI. And if they’re picking it up, how are they validating what they’re hearing out there and putting it into their data is accurate?
[David] Yeah. That, that’s why the interview we did with Bobby Kerr that we just released on LOC8, it’s L-O-C-8, LOC8 your business was really significant on it. And it opened up more questions than I have answers to, but to your point, the agents that are running around out there before a consumer even- … picks up the phone and calls or makes any contact that is something that has got to be- taken into consideration in your marketing and where we’re going with, ’cause the rules are changing. That’s a really good point. Anyone else got- feedback on that for Allen?
[Allen] Okay, let’s Move on to some more fun stuff. By the way, Optimal Blue just acquired a company called Usurpa. And again, talking about borrowers, it’s the single originator command center now, is what they’re saying. So Optimal Blue just acquired this mortgage CRM and marketing automation platform, which is used by many loan officers, real estate professionals, and mortgage companies. And the deal brings the borrower engagement capabilities from Usurpa together with OB’s pricing and eligibility technology, which by the way, in the press release states that it’s used by more than 200,000 originators. Joe Tyrell, who is the CEO of Optimal Blue, stated his vision, “A single originator command center that connects pricing intelligence with borrower engagement.” So pretty cool. Check that out. I didn’t see that at the conference, but I’ll tell you the booths, David, at the conference, we’ve gone from the days of pulling up the fabric and hooking it on the top to, LED crystallized displays and more couches and areas to sit, and the giveaways are better. And I’m making it sound better than it was, but the displays and everything AI is absolutely crazy. As a matter of fact, get this, Addy AI, they had A robot that was there. There was two robots, but there was walking around. It actually had a badge. Its name was Adele, and it walked around talking to people. I actually gave it a high five. I shook its hand which felt like just a rubber m- piece of metal. It was pretty cool. But anyways it was taking pictures with people, and it was doing those… I don’t know if any of you have seen online, Rizbot. It’s all over the streets of New York City where it laughs and talks to people and dances and stuff. Yeah. So anyways Addy AI had the bot there. If those of you that were there definitely saw it because it was right as you were walking into the expo hall. Relationships are everything, David. I won’t mention the name of the company, but I will tell you, I was waiting to walk into the expo area, and I heard a coffee machine. And for those of you that know me, I’m highly addicted to coffee and good beans. And I heard the grinding sound of coffee, and I stuck my head around the corner and stuck it into a room, and I said, ” Oh, can I come in?” And they said, “Sure, come on in.” And after spending a bunch of time with them, they gave me a VIP sticker to come back for freshly ground coffee anytime I wanted. And I’m actually gonna be doing a demo of my technology to a number of people that work there. And it’s all about relationships, and that’s the point I was trying to make about that, is actually connecting, touching people. If you didn’t have a pass, which by the way, that more people didn’t have a pass than had a pass, the events are a place to connect with people. This is one of those industries, folks, where you could just walk up to anyone standing anywhere at this conference, say, “Hi, my name is David Licken, and I would like to tell you about what I do.” And they’re open to have a conversation with you, and that’s how many people in our industry are there. But you should be doing the same thing with customers and borrowers. Vendors should be treating the lenders with the same amount of dignity and respect as you would with a customer, making sure that they understand what you really do and what you really can deliver. That, the reason I just said that is because that was one of the big points. Any lender that I spoke to at the conference stated the same thing. There is so much confusion because everybody is selling everything that their AI is doing. There was some really interesting companies there. I’ll tell you, everyone’s doing OCR. Everyone’s reading data off documents. Everyone’s processing rules. Everyone’s doing underwriting. And everybody is stating the same darn thing.” Loans cost over $10,000 or $12,000 to originate, and we’re bringing the cost down, and we’re speeding it up. You can now originate a file, or you can underwrite a file in one minute compared to six hours.” the message is just- mainstream messaging in our industry is just flooded with everything AI at this point. By the way, I don’t mean to sound negative at all. There were some amazing demos that I saw. There were amazing companies. The features that people are doing are amazing. There’s so much. I found companies that I’ve never even heard of. There was a company called Flex. It was their first time here at the mortgage industry. What they do is they make your mortgage payment on time, they work with servicers. They make your mortgage payment on time as a borrower, but you can pay them in many different types of installment scenarios. So they help people out who don’t have a constant stream or a different kind of stream of money coming in. They work in, with a lot of credit unions and banks in the auto lending. What a great idea. There’s a company called Jerry that’s out there, and they’re doing a home insurance marketplace, which is not new to our industry, folks, but there haven’t been a lot of those companies doing that. Wow. There was another one. There’s another company called Mosaic View that is out there, and they’re doing this really interesting stuff with properties where they can do with AI, do a full virtual look at the… They can take a picture of the real estate listing, and they can revalue the house based on what the AI can see. There was all kinds of crazy stuff, folks. So besides the standard stuff we see every day, many companies are building their own AI, many companies are talking about building with their own AI. I can tell you right now there was another company this was in the Chrisman report, but I also heard from somebody else. Highlands Residential Mortgage, they built their own internal API platform called Base Camp, and basically what it does is, this is the only sentence from what I learned about them that I’m gonna mention, because I know 50% of the lenders on this phone call are already doing this or thinking about it. Their own AI is getting information from Encompass, their CRM, Outlook, and Teams, and low-level documents in one connected AI workspace, and it’s helping their originators and their staff with what the daily priorities should be, what closings are coming up, what borrower follow-ups are needed, you name it. So folks are starting to leverage that. But with that comes a lot of confusion, and what I heard on the airplane, David, which was hysterical… So one is I walk out of my hotel room and in the hallway of my hotel room was a gentleman on the elevator. I said, “Oh, are you from the mortgage conference?” He said, “Yeah.” We started talking. “Oh, yeah, nice to meet you.” All that great stuff. Then I saw him again downstairs in the lobby like three hours later. Then I saw him on my plane sitting right next to me, across the aisle. So we were talking. We have a lot of common friends. Anyways, behind me were two people from Chase Bank talking. I did not introduce myself to them. Most of the plane, like all of us know, when you’re leaving an area where you had, thousands of people, we’re all kinda- Yeah … taking off to the same place. But anyways, they were like, “Oh, do you use GPT?” “I do, I use Claude.” And they were going back and forth. And then the one guy goes, ” We built a CRM all by ourselves. We’re tired of the big systems and all the buttons and features.” And I keep hearing this, so I know a lot of you are doing this, but I’m gonna end with this, David a gentleman named Ryan Kolkitt. I saw this on LinkedIn. So Ryan he’s head of product at Wilco. Great post. He wrote this. He goes, “Back from MBA annual, the highlights. Good coffee.” I would only agree if you found those custom ground coffee that I found. But anyways, he goes, “Good coffee, better conversations,” and he counted a dozen or so people in hallways, bars, and an elevator describing the thing they vibe coded last month. All right, so we’re all talking about the same thing. He goes, “A POS, a CRM, a pricing engine, a pre-approval bot.” He goes, “One guy even had a pipeline dashboard that basically replaces his LOS.” MBA even had a session on the agenda called AI Lab Vibe Coding for Loan Originators, It’s not a fringe thing. But here’s what Ryan brought up. Five quick points, I’m not gonna read the whole points to save everybody. You can find this post on LinkedIn. Again, Ryan Kolkitt, C-O-L-K-I-T-T. But here’s what he said, and he’s one million percent right, folks. ” Homegrown doesn’t exempt you from vendor management. It makes you the vendor, and your compliance team just inherited a system nobody documented.” It’s the first thing that’s the most critical. Boy, that’s a great comment. Wow. Watching Alice’s head nodding, Bill’s- This- … nodding here. Yeah and, a- and for the time I spent incubating my own platform at a lender, it was the same problem. Everybody wanted access to data, and it was the, he’s, the gentleman that was the CTO at that time said, “Not at all. No way.” The second thing, the CRM with the borrower SSNs in it, GLBA safeguards, written program, you need to have a written program, MFA encryption before you even go live, not after the exam letter. So second massive security issue. Third, the pricing engine that quotes a number the LE can’t even honor, TRID tolerance cures, 60 days, buy refund, no exceptions. So for the folks trying to build their own pricing engine, is it even connected to the cost of fees, everything that goes into the LE? Probably not. Number four, only two more to go, folks. Number four, the pre-approval bot that declines someone, adverse action within 30 days with specific reasons, the model said so, has already been rejected by the CFPB. So I’m, I don’t know the details of number four- Ah … but basically there’s an issue with having a bot already try and make a determination. Everything has to go to a human is what number four is saying. And something has already been rejected by the CFPB. And the last one, number five, anything you build that is touching a loan that you sell, reps and warrants bad data is a buyback with the owner’s name on it. Owners carry the risk, compliance carries the flashlight. Neither of them was in this weekend. As long as the song says, “Okay, but it deploys, so does a leak.” So I don’t know the song, but anyways, he goes, “Audience below, everything vibe coded.” Folks, we gotta be really careful. This is not, an auto repair shop or I can’t say a dental office ’cause they have HIPAA laws. But this is not, a custom sh- a smoothie shop down the road that you can just vibe code your own CRM and reach out to people for a discount for Valentine’s Day. this is serious stuff here, we gotta be really careful. But the innovation, David, is through the roof, and it’s amazing to see all the things people are building. So it’s a double-edged sword at the moment.
[David] Very interesting. Alice, you’ve gotta have some thoughts as you listen to Allen talk about this. SoPoint, this vendor management compliance, saw the CFPB rejecting the model, their res- results.
[Alice] Allen, you are so right. I’m so glad you brought all that up. But Dave, do you remember when the whole vendor management thing came out, and we spent so many episodes trying to get people to understand the work involved. Pricing, Social Security number. There’s so many things that you know that a loan, most loan officers aren’t even involved in the day-to-day. They’re just gonna think about their lane. And if it makes their job easier, great. But great list, Allen. I’m so glad you brought that to our listeners’ attention. Yeah, it’s good. That’s very important. Yeah, real good, Allen. Yes, David?
[Kittle] And so Les Parker knows the song, Allen, so don’t worry about it. He’ll have it on his next recording, I’m sure. So here’s a question for Alice and Allen, ’cause I don’t know. What’s the average time application to close right now? Does anybody know that? No
[Alice] Every company’s gonna be different. And you know what’s interesting is I always like to measure too really is application to underwriting decision, right? How long is that taking? But I think most companies are trying to be in that 21-day mark. I don’t think they wanna be at that 30-day mark. There’s a lot of them- Yeah … that are hitting the 10-day mark. Yes. But volume and trying to keep staffing under control processes, automation, all that comes into play. A lot of that end of the process isn’t in our control, as we’re waiting on title companies and stuff. Allen, one thing I didn’t hear on your list was licensing. And who’s- Yeah … licensed in that transaction if they’re using the AI even before it gets to the loan officer.
[Allen] What if the AI just hallucinates and starts advertising you in states that you’re not actually licensed in?
[Kittle] So the reason I ask about average time to close to finish that is, it costs what to produce a loan now? 12, $13,000, is that right?
[David] Yeah, still been, it’s been parked there for a long time.
[Alice] That was the last number that we heard,
[Kittle] Yeah. This is a ridiculous number. Take out,
[David] 60% is what Fratantoni says Ridiculous number. But we have- 60% goes to marketing. To the sales …
[Kittle] but we have A- we have AI, and we have every technology thing out there in the world, and it’s still taking sometimes 21 days to close a loan. I didn’t have anything of that 40 years ago and we closed them in 30 days. And so we’ve really, technology is great, but technology is still delaying us in some ways, and it costs too much money. Yeah. The regulations are- … a big part of delaying all that circle- Amen … to do with TILA. Yeah. Listen- So-
[David] We could go on and on, on this topic. It’s some great stuff. Allen, good report. Glad you went to the conference. Thanks for going there and representing the podcast for us. He he did so, and did a great job. Thank you, Allen. Yeah, thank you. Awesome. Awesome. Marc, you have anything you wanna say before as we wrap this up? You’re sitting there listening to all this. I know you and I both sit there as veterans going, we feel like we’re newbies in the industry. We’ve been in this thing over 50 years, and we’re listening and learning so much every time we get on this podcast, ’cause the world is changing.
[Marc] David, I learn something every week. Yeah. You ever think you understand this business 100%, you better dedicate a br- new brain ’cause you don’t. Yeah.
[David] Wow. And it takes humility to say that, and that’s what we both are s- I think it’s great. I’m so grateful for you all being a part of this podcast and helping us get this word out. Good job. everyone, categorically everyone should take this podcast and forward it around to all their friends and listen to it, because there’s a lot of great content. Bill?
[Bill] So couple of quick things to wrap it up. Allen, I also enjoyed the robot. However, I wish that I had seen the robot where I ran into the most people, which is, this was a good conference in that it was vertical, so you spent a lot of time on escalators, and I would’ve been really impressed with the robot if it could navigate an escalator. Good point. The couple of other things, so the MBA put out their white paper on reducing cost and Broeksmit was very clear that these were all things that could be done, by the agency’s stroke of a pen, right? Not legislative. LLPAs was a big one, and there was a post by Pulte on X this morning, right? Who said I think we’ll have some great ideas by the end of the year.” Now, this is the same person who was a no-show at the conference, by the way. Yeah, that was Ben. I think clearly he and MBA are not on the same page. No. No. One of the other things that was definitely an undercurrent at the conference, some of the things going on in the non-QM space, especially in the DSCR loans, is starting to make folks nervous. Yep. Heard about it … I talking to a couple of warehouse lenders that they have non-QM investors that they will not partner with their clients if they’re using those investors, because they frankly don’t think that they have the skillset and liquidity to, survive any sort of a pricing hiccup. And they’re looking at, when you start getting DSCRs below one, they … to me, this starts to feel like, and it’s not gonna go in the same direction because it, think it’s still a bit of a one-off, but that product starts to feel like some of the alt A and subprime did in 2002, 2003, right? Where- Yeah, the lender … every day- Yeah … the investors are waving the pompom going, “We’re more aggressive than the next guy.” Eventually those start to not make a lot of sense. So I would… my caution to folks is, that the comment you heard in the early 2000s if the investor will buy it, it’s okay to do it.” Not always. No. Very true.
Allen Pollack
, Chief Operating Officer, Tech Consultant
Allen Pollack, a Mortgage & Financial Services Technology Advisor, is a subject matter expert in the mortgage origination process along with software product management and software development.
In today’s financial services push to all things Digital, Allen has been helping lenders and financial services solution providers align their digital transformation and technology strategies by removing the human element of risk, and automating processes that drive efficiencies and margins into profits.
Over the course of his career, Allen has co-created and developed technology business models that have birthed highly successful, innovative solutions and companies.
Allen co-founded and served as CTO of New York Loan Exchange (NYLX), a loan product eligibility and pricing engine (PPE) that made an immediate impact on the industry, scaling the company quickly and forming partnerships with multiple mortgage and financial lending companies. In 2012, Allen was a co-founder of a merger between NYLX and Aklero Risk Analytics that created LoanLogics, A Mortgage Loan Quality and Performance Analytics company. Allen served as CTO where he continued to bring new and innovative product solutions to the market that made a significant impact to mortgage lenders that reduced risk, scaled business channels, and grew profits in a very competitive and highly regulated market.
Allen is also is mortgage and finance technology contributor on a weekly live industry podcast, Lykken on Lending, and is launching a new podcast soon to be released, TechStack Radio, dedicated to technology and innovation in Financial Services.