[David] Talk about a wild ride last week and this week we’re off to another one. Starting off on Friday. We’re at 4.59. We just almost got the 4.60 and you sit and look at the trauma that’s doing. So I got a question, listeners, and I wanna talk about this with our contributors here today and that is what is your mindset? Are you letting this whipsaw you around? Are you letting this, the financial markets say, can we control it? Number one, no. Do we don’t have any control over it. But what do we have a control over Mr. Kittle? It’s how we think about it and it’s really the mindset we have and I think the thing we have to remind ourselves, Alice, is the thing that we all know is there is a very strong demand for housing. Allen, you could testify to this because you got a house you just put on the market. I’m putting my house on the market to this week. I hope I have the same luck you did and it sold before they even pounded a sign in the front yard. So, I think it really, is that correct, Allen?
[Allen]Yeah, a 100%. We never had to put the lockbox on and we never put the sign in the yard.
[David] You sit and look at that, Mr. Kittle. Come on, talk about it. Mindset.
[Kittle] I’ll add to that. My daughter who’s married to a Coast Guard helicopter pilot, they’re getting transferred from Chesapeake, Virginia to Florida. They didn’t even put their house on the market. Just by word of mouth and it sold.
[David] Sold by word of mouth.
[Kittle] Sold by word of mouth. They had a realtor who started to talk it before the sign went in the yard. They didn’t even sign. They ended up signing the listing with her. Long story short, they got 10% more than what they were gonna list it for because they had five offers on it before it was never listed.
[David] See, Alice, this is the kind of stuff that, is going on in the market and we gotta sit and realize business is still going on and think it’s your perspective, it was really fun by the way, you joining me at that interview with Bill of Union Home and it was just, I admire his, just stay the course, stay focused. Your thoughts on when you hear this kind of volatility going on
[Alice] And as you guys have reflected the housing market itself is really where we sit, right? So the housing market itself is great and to not let this whip saw, I like that term flip you around and go, okay, should we lock today? should we apply today? You’re just deal with your customer. Lock is still always the best place. If they wanna lock, they should lock right? lot of good stable policies that lenders are, if you’re gonna put it in process, it really should be locked. Brokers, if you’re gonna lock it with the borrower, lock it with your investor. So, I think the market is just telling you, don’t take your own risks. Focus on the purchase transaction with the customer, focus on the service, and don’t try and worry about those eights. Although last week, I think it was a historic swing hadn’t happened. It was since 87. Is that what I did? I read that correctly last week. That can make you really nervous that, oh my gosh, are they gonna end up leaving me because, freights turn around and go down a full quarter or a half. Am I gonna lose them? I don’t know if you can get that kind of timing right. In this market.
[David] No, and I think, and should we even be trying to get that timing right?
[Alice] No. Yeah. I’m not an advocate that you can lose.
[David] Yeah, no I’m totally, I’m an advocate if you got a deal, you put it in, you lock it. Because you don’t know where this thing could go the other way. I would rather deal with the problem of coming back to my secondary folks and trying to negotiate. I’m about ready to lose this deal outta the pipeline is what can we do? I’d rather worry on that than sit and go can you help me out? I just lock in the market. Deteriorated word. I remember those days. It was a long time ago, but I remember those days.
[Alice] That’s play playing the market without your money, unless you’re the owner of the company, you have really, you have no right to do that because that you’re putting the company’s money on the table when you do that.
[David] Yeah, exactly. And then how many times have we seen litigation come out of that Alice? Because I told you, the borrower goes, I told you to lock if the thing went and then if the market, and this is where it’s so important to have a process in place that is ironclad, that will stand up in court when they said, I told you to float and then they come back and say, I told you to lock. It’s like the borrowers. It’s very selective in the memory. We’ve all dealt with it. That’s why you just gotta have some really tight policy procedures this side. But I’m more interested on the mindset. The mindset of what everyone has to have. Houses are selling, are you letting yourself get wrapped up in the prop wash or the noise, however, whatever therefore you wanna use, that’s going on and missing the deals that are getting done. That is the big question and I think there’s, we evidence of it all over the place. Deals are getting done, especially when you look at the percentage of home ownership of millennials and Gen Zs. Lemme tell you this, my daughter, youngest daughter, she and her husband are in their mid twenties, mid to late twenties, and they are, she’s pregnant. Alice, I can’t even imagine this. But they found the house that they’ve always wanted went on the market. They own a house and there’s this other house that went on the market. They run that’s right across the street from their friends or next door to their best friends. They went, she’s due in three weeks. They made an offer on the house they’ve always wanted and put their house up for sale on the babies due in three weeks. You sit, look at things and you go like crazy to be young, to be able to deal with that stress. But that’s our daughter and so it’s really fascinating to look at the dynamics in the market right now. Deals are getting done out there, folks. We hear about all the volatility. Yeah, we’re gonna hear about it. You hear about it in Lykken on Lending, if you belong to and subscribe to Matt Graham’s MBS Live.net, which you should. You can sign up or go get a trial period. Extended trial period by putting in LOL for Lykken on Lending in the signup code snd you’ll be able to get an extended period without putting in a credit card. But it’s so affordable, you need to do it. I use MBS Live.net all the time. It’s on behind me constantly. I’m looking at what’s driving it. But I really appreciate Barry Habib’s. He gives the rate lock alerts, he calls my cell phone, he called the May the blast out, and it says ahead of the market. We recommend you do a lock. I think you’d need these kind of services folks to be able to keep on top of what’s going on. We could talk on and on about all this, but we’ve got so much to talk about today. But I’m just gonna challenge your listeners. What is your mindset? are you letting the news and the noise in the news capture you and bring you to paralysis or are you looking at it? Another thing, Alice, I wanna talk about is the volatility in production levels. When you have this kind of thing, you’re gonna see volatility in what’s coming into the pipeline and if you’re head of underwriting, how do you manage that? And you look at this from a standpoint of how do some of the best run companies out there? Again, you used to work for one. Union Home Mortgage, Bill Cosgrove. How did they manage that?
[Alice] I’m trying to just follow your question. You said and manage production, right? So you talking, are you talking about case they come in the door and then manage the underwriting because the flow is going up and down?
[David] That’s exactly, it’s the volatility in the workflow. When you see this kinda spike in interest rates, it’s anticipated. If people are getting caught up in the noise, then they’re gonna go, oh gosh, we’re gonna hold off and lock here. We’re gonna hold off making an application. Rather realizing deals are getting done, but when that happens, you can have varying volatility in the volume that’s coming into an office. So, how do you staff and manage to that? That’s what I’m talking about, Alice.
[Alice] The first two, there’s a lot. That’s a lot, right? Kittle, you could talk to this too, right? There’s the two things I guess I’ll bring up and then I’ll turn that. I would say first is you still have to have the quality of the application when it hits the assembly line in the first place. So, never give up on that accountability for the loan officer. Just because they’re busy doesn’t mean they get to put slop on the assembly line, that’s number one. Very good. Number one is quality of the application in the first place. Consistency in quality, that’s the root of all of it and then the second thing that I know many companies have done, I’m not gonna give away any secret sauce here, is you have to have really like a split business process. You have to have enough people in the flow that you’ve split up your expertise. You might use the word. Bifurcate, but you’ve divided up different work responsibilities. So, your experts can be experts on the things that they have. You have technology doing the basic flow, you have really good triage on how the clean deals can move forward and other loans can go down different paths. That’s one thing I would say can also make the difference for a company and for smaller companies, that can be difficult because your staff is smaller, but there’s a lot of great ways you can do that to manage that. So those are my first two things that came to mind.
[David] Yeah. Yeah. Allen, she touched on technology too, coming up to you kid in just a minute. But Alan, you talked about technology and how you manage some of this from a flow standpoint. Thoughts?
[Allen] Yeah. It’s funny you said that because as Alice said, flow, I was writing down. So when we got on the phone earlier today, I mentioned a little quote after we were chatting and I said let it flow, so ul ultimately you’ve got, and it’s so funny it’s weird how the universe works. One of the topics I’m gonna talk about in a couple minutes when my segment comes around is how to find and why to find the right technology superstar for your executive team. So how about I reserve the right David to fully answer that question. Good. But I will say that it has to do with hiring and having the right folks on your team.
[David] Yep. Totally does. Absolutely. It comes down to staff people with the right attitude. And the other thing, Allen, that we’re looking at, and Mr. Kittle, you and I talked about this. In fact, we did this at TMC one time. Remember when we had Jim Blanchard come in? It’s like understanding the personality attached to your people. Understanding I love Six Working Geniuses because you find out who’s good at solving problems and who’s the get or done group and then who has discernment and all that. I love six working geniuses. I was on with my client Alcova mortgage on with, we call them 3AM the three owners of Alcoba Mortgage, 3AM and we’re on talking about this and we’re going and looking at the different personality types and we’re looking at what do certain personalities like to do. Alice, you talk about different ones having, there’s certain groups that just give me the really difficult files. I love those. I love pouring into them. They’re the, I mean I used to love, the more challenging the file, the more I loved it. I loved that file when I was an underwriter because it gave me something if it was vanilla, boring, but give me those hard challenging ones. So I love those hard difficulty. There’s some people just gimme the vanilla. because what I get my gigs, my vi out of is I get it out of volume because. I could go home and say, I underwrote eight files today. Those days are long gone. But anyway. Mr. Kittle, thoughts on mindset and workflow volatility?
[Kittle] Let’s go to the workflow volatility. Back in the day for my three lending companies I could, unless the borrower lied or kept something from the loan officer, you can trace back every underwriting issue to loan application, period. A loan should never, ever get to underwriting for the underwriter to end up processing the loan for you and telling you, it should be ready. So, you gotta have a good originator that takes it, asks all the right questions, gives a complete file of your loan processor or your loan, whatever they are calling them these days. Your assistant and that person, he or she should never let that loan go to underwriting. If it’s not ready, it’s not ready. But it happens all the time, because production is gonna push. And I used to, I had a couple of loan officers, one had to let go who was a star producer because she was managing everybody else’s time. Everybody was, yeah.
[David] Everything wasn’t managing or disrupting.
[Kittle] It was disrupting. Yeah. So the toughest thing to say in the mortgage business, really in life and anything else, especially in sales, is No. I can’t do the loan.
[David] I’m taking this in. Yeah. And it takes management and a steal. This is where, I’m just thinking of the C-Suite or either of your supervisor here, Alice, you have had to learn how to say no with that smile of your face, how many times. It’s that and, but it’s such a difference when you have a guy like we, we honor Bill Cosgrove. because he is a friend of all of ours here on the podcast. But he goes, no, I’ll support you Alice, if you say no, it’s gonna be no.
[Alice] Absolutely. But I think more importantly is giving the loan officers the resources to understand and learn how to be really good at it. So that’s the thing I loved about Union Home was really all the systems and the training programs. So there were systems for loan officers on if you did this and here’s how you could build teams. There was coaching programs to help them be successful. And like you said, not everybody has the same set of skills. So if I’m really good at getting leads, then I need a really good assistant to David’s point who can finish things up before it goes to underwriting and get it put together properly. I think yes, there’s times you have to say no, but there’s also the setting people up for success in the first place and making sure things are clear, the support resources that they need.
[David] You hear such a good point right there. And I remind everybody the story, and I’ve told this story numerous times when I get interviewed by other podcasts and things like that. But I’ll never forgot I was a top producer when I was in my business, but I was sloppy, part of it is because I have dyslexia and I was, I just didn’t see things. I had dysgraphia, dyslexia, a lot of visual issues that just didn’t make. I wasn’t a natural at having a, turning in a complete file and finally, I couldn’t add up a column of numbers to get the same answer twice. I think God’s spreadsheets, the calculators finally came in. But in 1973, 2 things were going on. Rates were going through the roof from the time I started in the industry in 73 until 1980, I didn’t know anything but an increasing rate market. That was number one. Number two,
[Alice] I remember those days. Yeah, remember those days? Eighties.
[David] The other thing is we didn’t have calculators and you were in trouble if you didn’t have a calculator and you had dyslexia, degra, dysgraphia, because I’d add up a column, the numbers and the, my numbers were moved every, but every time I look at it, the numbers was here one minute, and the numbers over here, that’s just. That is a learning disability. That’s something that’s real. Now, what I was really good at going, getting the business, so my boss who hired me at the bank was, they finally Al Deans Lawson, I’ll never forget her. She was the head of compliance. She says, boss, we got a problem. This top producer you have out here can’t add up a column of numbers. We’ve got compliance issues and we’re a bank, we are in trouble. If the bank examiners, you’ve gotta fire this guy. They could not come up with a solution. That’s how compliance people, nothing against you compliance people out there listening to this, but think out of the box. So she prevailed. He came out, he was gonna get rid of me. I thought he was coming out to give me a bonus, Kittle. I thought he was coming out to give me a price. because I’d had a really good closing month. So I’m thinking, I’m getting honored. I didn’t realize I was getting fired and so he was conflicted on this. Like you were talking about your top producer, Kittle, you had to fire someone. Because of this. Now, if they don’t change and you can’t find systems around that, but I was teachable and to a degree at that point, I had some issues. But the point of it is he stopped at a friend. He was conflicted about the decision to fire me. He was conflicted. So, he stopped at a friend and says, I gotta talk to you. I’m about ready to fire a top producer. Good producer. How good is he? He’s really good. Okay, so what’s the problem? You can’t have a call of numbers that get the same answer twice. That sounds like there’s a solution for that. Yeah, but we need to have people who can do that. He says, why don’t you do this? Why don’t you buy him a car? Tell him he can never come into the office and never touch another piece and find at least two or three assistants to come alongside him to do all the detail work that he can’t do and that guy, and then the President of the bank goes. I should have had a VA. That’s brilliant. So, instead of getting fired, she called, he said, he called back to the office, said, have we repossessed any cars lately? He goes, yeah, we just repossessed. And he told me the car. He says, go have it washed. I’m picking it up. We’re not firing Lykken. We’re giving him a car. And those two late people that we just trained that can do disclosures and add up columns and take applications thoroughly, have them out at the office. So I was going from getting fired to getting a new car, not a new car, but a nice car. And they brought two assistants. They said, Dave, we were gonna fire you today. And go, you were gonna what? That we’re gonna fire you because you can’t have call numbers. We gotta have this right, but we’ve got a solution. We’re gonna put you in a car. You never can come into the office again. You can come in, but you can never touch a piece of paper. You can’t touch a disclosure. And these two assistants are gonna make you look really good. There’s solutions to the problems out there, but do we find the solutions or do we get myopically focused in on the problem? They would’ve made someone else’s day because I would’ve had a job within an hour.
[Alice] I think the other, and I love that story, but one thing I wanted make sure our listeners pick up on is, in your case, you’re a great person, you work well with people and it was just a, a disability people who are jerks, who are, who mistreat You’re not getting an assistance. You’re getting the nose and you’re getting out.
[David] Yeah. And that’s a really good point, Alice, because I did have a good, I did have a good attitude and I was trying, but, and they saw my efforts, but still, compliance is compliance and Al Dean was one of those people, she put a roller up and if it didn’t, plumb line, you didn’t stand straight, you’re out. That’s the way
[Kittle] I think it comes back to, what will management, senior management, the owner, whatever, tolerate they look at the pipeline production’s great. How long does it take? Are we missing lock-ins? How many times they go to underwriting and trace it back to who it is? You can manage all that quickly these days, and it still the answers of no has to permeate from the top. The people that are giving that out to Alice’s point earlier is they have to know that they’re being backed up by the owners and the managers of the company.
[David] Yeah, absolutely. Yeah. Are you supporting people? Are you’re looking for solutions instead of just seeing the problem? There’s so many, there’s so many morals on that story. I’ve told that, and it’s really awaken people up. So Alan, I wanna get over to Alice in just a bit on her segment. Any comments you have before we go to Alice and then you,
[Allen] I’m gonna stick to my statement of let it flow.
[David] Okay. Very good. Appreciate it very much.