[David] Allen, any thoughts on this, especially from a technology standpoint?
[Allen] Yeah. And actually I asked GPT for its opinion and I watched these videos of people talking to GPT and ways to treat it like it’s like your first cousin and really get into a deep conversation and so I did that the other day. It was very interesting, but I took that same tone and I said, I’d like for you to think about the market. Go do research. Give me a short analysis of why you think they did this and what’s expected for the future. I also said, by the way, I’m reading this because a lot of people struggle sometimes writing prompts for GPT. So I wanted you folks to hear what I said, verse what I got. Yeah. I said, what are they trying to do? Please don’t gimme a general response. I want you to think, use your mind. Pretend you’re someone that people come to for analysis and maybe even ideas for fun and forecasting to those people that ask what they’re trying to do in the long term. Gimme something a person would say, use your brain as if you were a human. What do you have? and I said a couple other things in there. So anyways, it came back and it said:
Rocket Companies X Redfin, The Bigger Play: And I won’t read it all, but I’m going to give you the highlights. You’re going to be impressed. By the way, Rocket didn’t just wake up 1 day and decide to spend $1.75 billion for Redfin for fun. It’s a calculated long term move to control more of the home buying funnel and push deeper into purchase mortgages. Which is the battleground for survival as refinance volume stays depressed. You just said that, right? What’s the strategy? and GPT said home buying is fragmented. It’s a mess. Buyers go to Zillow or Redfin to look at homes, talk to agents, get that whole process. Rocket wants to control the entire journey. Declining margins on mortgages. Redfin means Rocket can feed its loan business directly without paying for leads. Big Tech is moving in. So, what it’s saying is Rocket does not want to be left behind in a market that’s consolidating. This is GPT’s opinion. Long term vision. It said, if we zoom out, Rocket is not just buying a real estate site, they’re buying a true end to end home ownership platform. Think of it as You need a mortgage? We do it fast online. Past Rocket, the new one. Think of it as this. You want a home? We’ll help you find it, finance it, insure it, and maybe even resell it all without leaving your ecosystem. That’s pretty bold. Now a couple more quick little things that GPT came up with. It said the acquisition accelerates their evolution to be a real estate and mortgage hybrid model similar to what Zillow tried by buying with iBuying, but a more sustainable approach. And it goes, Hey, what happens next? It said there’s gonna be a massive Redfin overhaul. This is GPT’s opinion again, folks, more direct lending, less lead buying, because now they will own the traffic competitive response from Zillow and others and further expansion into home services. Rocket already offers title escrow and insurance and with Redfin now they can start buying more services and even experiment with seller incentives and other stuff. So, the final take that GPT said, you ready? This force moves other players to rethink their strategies and I wouldn’t be surprised if we see a Zillow plus SoFi or Zillow plus United Wholesale Mortgage partnership. Next. And you’re ready? The last thing that GPT said? Rockets gamble? Question mark? They have to execute flawlessly. If they can’t seamlessly integrate Redfin into their mortgage machine, they just spent $1.75 billion on a fancy lead generator. But if they pull it off, they just rewrote the future of how Americans buy homes.
[David] Wow. Kudos to GPT. Allen. Thank you so much. Yeah. Alice, your thoughts. I should say, listen to that. I saw you writing notes and I’m going like, that is really insightful. Really well said. Marc Helm.
[Marc] I’m a really big believer in artificial intelligence and that’s just a perfect example. That can work wonders for us, but also I agree with the comment artificial intelligence said. Sometimes they’re smarter than the people. Most of the time when they say things, they’re madly said. You could have a busted chip real quick if you don’t do, simulate things the right way. If they do it the right way. It’s just going to be unbelievable in this country. What’s going to happen after.
[Allen] Imagine the time when GPT is invited to have a seat in a boardroom and really clears the air and says what’s going on and what people need to do next.
[Marc] I like that already. I want to tell you, I’ve made no secret about it. Every time I communicate a new program that I put together for the business or communicating thought, the process to get people, I put it together and then I dropped everything that I do through Chat GPT to have it look at it to see if I miss something so simple that six months from now, I’ll slap myself in the head why I didn’t think about it or not to listen to something that’s really fabulous that can add to it. You got to remember, you don’t get a hundred percent true facts, which had GPT out there. They sell off a little bit. But if you’re not using it as a work tool together and saving, I would be sinking right now if I didn’t have that to save the hours I spend in things because I can put it together, send to it, give me extra comments, cleans it up, gets it out and makes me the most productive person I can be and I’m still behind. So it’s helped. I don’t know where I’d be without it.
[Allen] I’ll give up the rest of my segment if I can just say this one last piece because this is really interesting. I said Hey, do you think Rocket could become the Amazon of mortgages? Are they making that play? and this is what GPT said. It’s pretty quick. So we’re to answer. They want to, but can they, it’s a different game. Rocket’s acquisition of Redfin is a clear power move towards owning the full home buying experience, but calling themselves the Amazon of mortgages is a huge claim and there are major roadblocks and then it said this, Rocket is an elite marketing machine, the best in the business at branding and customer acquisition, but Amazon didn’t win because of branding. They won because they owned infrastructure and supply chains. And it said for Rocket to become a dominant home ownership platform, they need to control or deeply influenced home search mortgage and origination title and escrow insurance servicing and the last one, which they don’t own and they can’t own is going to be secondary market influence, which Ice, Fannie and Freddie all have.
[David] Yep. There are some really good points in that Allen, There’s some really deep content that I want to go back and read and analyze and work on. That is really good. I’m very excited.
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.