[David] Allen Pollack is here, and I love the tech segment is so much going on because Allen I’m just gonna let you do your thing, but then I wanna talk afterwards because there is a lot of investment going in. Billions of dollars in investment and ai. But first of all, normally I start off by that and then you go I can’t believe you brought it up ’cause I was gonna cover that. So this time we’re gonna let you start off and then we’ll bring in some of the other content I wanted afterwards.
[Allen] Alright. All right. I like it. So AI or Al something funny, we talk about generations and how people perceive things. One of the businesses I’m involved in is in the music industry and everything is Gen Z and what’s interesting is how they think and how they interact. They’re not home buyers yet, but they will be. They’ll be pay attention to that. And it’s just very do not think like we do. And the marketing companies we’re working with, everything we say is wrong and different. So anyways, the reason I say that is many of you know that I am divorced and I have this amazing girlfriend. She is a second grade teacher, and she said to me the other day that I would get a laugh out of this. And I immediately went to my notes and said, I gotta talk about this on the podcast. Her kids saw the word AI. It was a story. And they all thought it was AI. Nobody understood that it was somebody’s name.
[David] we are can we have an identity crisis here?
[Allen] absolutely, so depending on, their brains are already tuned. We’ve already gone through the generation, first, David you’re a generation ahead of me, but my generation, I’m Gen X, we didn’t allow our kids to have iPads and phones that went out for dinner or at the kitchen table. Right now it’s everywhere. Next kids already know what it is. Like nobody gets the toys are all digital anyways. The kids now in second grade think that AI and Al are interchangeable. They had no idea Al was a person.
[David] So anyway, anyone with the name Allen or Al for short? They’re in trouble.
[Allen] They’re AI. Yeah. There you go. It’s just like anyone. Al, you’re Al. You’re ai. That’s great. I’m gonna say it. I’m gonna say it now. Anyone with the name? Alexa. And now I have to say, Alexa, stop. Because it was, as soon as I say that, it goes off. I know. All right, let’s move on. All right, move on. Good. Better says ai better.com folks. They say AI is now central to production, not just a helper. So their CEO talks, ai platform growth and real results. During a recent conference or an investor meeting, they basically said that the progress of its Tinman AI platform, it’s T-I-N-M-A-N at a recent investor conference unifies their key systems, their POS, Pricing. L-O-S-C-R-M, underwriting and Compliance. That’s right. That’s 1, 2, 3, 4, 5, 6 systems into a single AI driven workflow. And they claim heavy automation has led 70% of their loans being what they call, what they’re referring to as one day mortgages and almost half of their closings from lock to commitment in under a minute. I’ll say that again. They’re claiming with putting all AI around all these different pieces, 70% of their loans are being what they’re calling one day mortgages and almost half closing from lock to commitment in under a minute. Now they’re expecting 90% plus of their loans could go fully via AI in the coming years. That means the entire loan process would be driven by AI. That’s obviously not what everyone can agree with, but they’re saying that. They expect that and they’re expecting to reduce the cost per funded loan to below $1,000.
[David] Yeah. There’s already people there doing Wow. Already so many are under that. Yes.
[Allen] Now I’ll tell you, there’s a number of people, David, they’re trying to do ag agent experience. They’re not trying, they are, they’re doing ag agentic experiences. And That’s right. And if you remember our conversation from last week, we’re talking about the LOS system. No one’s trying to build a new LOS anymore, replace it. The LOS system has become the hub. So they’re all fantastic systems folks. It just means what do you need and how are you gonna integrate with them? And these agentic experiences or any AI automation platform can automate everything talking and working together. And I cut you off, David, so go ahead. What were you gonna say?
[David] There’s so many things you fire off in my brain as you’re talking away. Al Sallan. Yeah. And I could, couldn’t resist on that that I’m really looking at. Aspects of what is our future look like?, People go, they look at me when I say, put out these numbers because the MBA statistics right now are still 70. Somewhere around, for the operational side of it, overall cost is 12,000. Depending on the volume, whatever, it could be as high as 13,000, 11,000. But it’s we’re still overall 60% Fratantoni says 60% of it’s going to compensation, origination compensation. So that leaves us approximately $5,000 on an average to do that. We have people well under a thousand dollars right now performing what that is gonna do for this consolidation that’s happening, that’s predicted to happen in 2026. It’s gonna be significant. It is going to drive this. I’m, I look at Pavan that has this operational cost down below $150, actually below $120. I’m gonna be recording a podcast with him here after lunch. And we’re talking about so much development, people that are not looking at this and looking at it with the right optics, with the right belief system that this is coming.
[Allen] Here’s the thing in trouble, David, they’re in trouble. Here’s the thing, you gotta have the right people.
[David] You could almost call ’em the walkie dead. And I don’t wanna be overdramatic because who survives, who doesn’t sometimes is surprising you.
[Allen] You gotta have the right people. And I said this in a prior podcast too. The reason why is the guy that was your friend that helped you find, found your mortgage lending company or whatever type of company you are in our industry. Even in real estate is not the person to run your AI just ’cause they ran the wires in your ceiling and they helped you hook up your Windows PCs. You gotta have last week. Yeah. The right person. I’ll give you an amazing example. There are technology platforms that are agentic, by the way, where you can build your own tech without engineers. I’ve been building technology for 25 years. I just built in the last year two platforms that run off of these fully agentic let’s call it engineer list systems. Both systems are amazing and I, both of ’em are in production in the industry today. Different industries, one’s mortgage, one’s not. The other thing is very important is they can easily go off the rails and off track in the AI world, engineers called hallucination. But beyond that the point is that if you don’t structure and have the right mindset and the right people and engineering mind to build those things, you’re gonna mess up. You’re not gonna have the right data controls, you’re not gonna have the right scaling, you’re gonna have bottlenecks, all that stuff. I’m not going into a rabbit hole. I say that because you’re right. I build platforms without engineers saved critical hundreds of thousands of dollars potentially. I built them the right way though, so that they’re scalable. You need to make sure folks, as you are building and working with vendors and scaling your own tech, yes you can go do things on your own, but it may be code you can’t undo and it may be wrong. So make sure you have the right working free.
[David] Oh, that’s so good Allen. It may be wrong, and I’m thinking of one particular couple owns a mortgage banking company and they’re, they’ve invested millions of dollars of developing something that they saw a niche, they found it recognized and it is brilliantly done. And they’re good at technology, but I’m looking at the millions of dollars that they’re putting into that. And you look at the macro tech we look at bright shiny objects when it comes to technology, and I think we get ourselves to so much, so many people get in trouble. It’s because I got the money. You better be dang good. Really good at developing technology. You’re going down to a path where there’s some brilliant minds that are failing at it. Look at meta. They struggled. They have thrown so much money. We’re gonna be talking about that. Yeah. Mass layoffs gonna deal mass layoffs. So here, are you smarter than meta? And they look at how they’ve bet and failed. There’s so many aspects about what’s happening. It’s what?
[Allen] There’s a saying. Fail. Fail fast. So if you’re gonna fail, they just have more money to throw at it. But yeah, if you’re gonna fail fast. Yeah. Let’s get into some other but’s. When you fail and fail and fail, if you have multiple failures, if you’re failing fast, but you’re doing it multiple times and it consist of stream, at some point in time you’re gonna go, you’re a failure. Yeah. At least you’ve never you know what?
I’m gonna skip over my other content. I’ll bring it up next week. Let me go right down to something I was gonna talk about and I’ve been on this coffee kick for a while. But lately I’ve been trying to understand how I really make the best coffee. Sometimes my brain just is wired differently, and so now I’m between French press, pour over, drip my espresso machine or, going to the coffee shop where, which I do, if you’re in the Jacksonville Pon Vire Beach area, you will definitely find me at a coffee shop three, three to four days of the week. But it’s the same thing, right? What technology tools do you use? How do you make your coffee? How do you taste test it. Are you having the Starbucks guy taste test your over? or what is it that you’re trying to get out of it? At the end of the day, if you never finish your coffee and it goes cold, then really are you really enjoying the coffee? Horrible analogies, David, but it gets into ownership and authority. And I’ve got so many things I was gonna go through today. I’m only gonna go through one or two because the list is long and it’s in depth, but I don’t ever wanna catch you short. We gotta, that’s okay. Start you a podcast. Ownership. No, don’t leave it. Yeah. Ownership and authority, right? Who is going to own the vendor stack and the end-to-end budget? The renewals, how you’re implementing it, the procurement who’s owning that. And it’s not always just one person. Sometimes it’s growing to a team. So if you think you’re saving money per loan, or you don’t have a high technology cost per loan today and you’re doing great, maybe you’re not including what the staff is into the cost of what you’re closing or what your cost is per loan. And then the next thing I just wanted to bring up, David, is you’ve gotta get down to what your real vendor list is. And it’s starts with, just what happens? Before you do a puzzle, you put all the corner pieces together, then the edge pieces, then the similar colors, right? You gotta start putting the puzzle together and there, there’s so much you can do, but you have to understand what vendors you have, who’s working, who’s not. And we talk about it all the time. How many vendors did you sign up for? Because you’re at a conference and they took you out for a great dinner and to the world. Or how many overlap between vendors you have? Sometimes you need for risk, you need opposite vendors. It’s okay but there’s a lot of overlap and a lot of difference. And you categorize it. That’s true. So what, next week, I’ll go into more of those because I could talk forever on this stuff. But this is what people are dealing with now. T hat’s why I sound like, like a broken record because we’re all trying to figure out what are the technology pieces? What do we really need? What is risk adverse fraud. By the way Fannie Mae is doing a deal with a major ai, a public AI company right now to tackle fraud. AI is a part of everything.
What pieces and within what parts of your organization? Yeah. This is a topic. There are whole podcasts on this and I think why we have the listenership we do is we try to touch significantly on all these various topics that we come through. Whether it be the markets, the compliance, the production, what’s going on, and the technology We, we get into it. But man, so much great content. Allen, thank you so much for being here. Really grateful for and for you and of course all the other contributors to this amazing podcast. And it’s amazing that because of me, ’cause y’all appreciate you all, as we say here in Texas. All y’all do such a great job at this. Thank you very much. Very good. Good on the good podcast. Thanks for being here.
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.