Lykken on Lending

In our Hot Topic this week, we have Peter Paglia on the program to discuss how HomeBinder is helping lenders become more valuable to their referral partners.

Want to know more about Peter Paglia?

To read more about this episode click here!!

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To Earn Repeat And Referral Business…… Keep Delivering Value!!

We’re so glad to have you joining us. This show is created by Mortgage Professionals. It is for mortgage professionals and we’re so grateful to have you as our audience. Our commitment is to bring you timely information that you use anytime and anywhere. Many of you are doing that and telling others about it. I can’t thank you enough. Downloads are crazy on the show, so a lot of it has to do with the first part of the format and how we give you a lot of information. We try to tighten all that up a little bit, so we get it done in a timely manner. Also, the Hot Topic segment is really getting a lot of downloads and traction.

In this episode, we’ve got Peter Paglia, Chief Strategy Officer and Chief Revenue Officer for HomeBinder. As we look at the industry and the market, and the refinances are going away, how can we stay more in front of the customers? This industry has a terrible track record of repeat business and customers. It’s usually across the board. Some are doing better than others. The purpose of this show and having Peter on is to talk about something you can do to stick with, keep, and hold on to your customers. Joining me on the microphone again is my co-host, Jack Nunnery. It’s good to have you back.

David, it’s good to be here.

We also have an Industry Syndicate. I’m grateful to be a part of that syndicate. Check out IndustrySyndicate.com. Also, I want to say thank you to our sponsors, the Mortgage Bankers Association of America, as well as Finastra Fusion Mortgagebot Solution. You can experience the power of a fully integrated approach to mortgage lending. It simplifies the borrowing experience and streamlines the process for employees and customers. Right behind that is Insellerate. They do a great job through their leading-edge technology of connecting mortgage experts and their borrowers through pre-signed campaigns. Josh Friend has a great approach to it, and when you combine these two technology solutions, excellent things start happening.

Also, Lenders One, check out what they’re doing. Justin Demola was on June 2021. I was talking to him again and our friends over at The Mortgage Collaborative, TMC. It was a great conversation. Tom Gallucci and the team are doing a great job at Mortgage Collaborative so is Demola. Check out both of these co-ops. We belong to both of them. I encourage you to do the same. Also, The Community Mortgage Lenders of America is a great association, as well as Knowledge Coop, which has a great job of helping you teach and train your people through a learning management system. Learn about LMS from Alice Alvey many years ago.

The importance of having a good LMS or Learning Management System cannot be understated, especially at this time when we have so much knowledge that we have to transfer out to our people. What solution are you using? Check out KnowledgeCoop.com. When it comes to recruiting, we have two sponsors that do a great job at helping in your recruiting efforts, Mobility MMI, Mortgage Market Intelligence, as well as Modex. We use both of them and many others are using both of these, like the two co-ops, the Mortgage Collaborative and Lenders One. These two work nicely side by side, working with you to help recruit top and lows.

Get metrics on your market or, and here’s the most important part, markets you’re considering going into. Who are the top real estate companies in the area? What are they really doing for business? Who are they doing business with on the mortgage side? All of that is inside these two pieces of technology. It’s so powerful, especially as you’re looking at who doesn’t want to recruit as this recruit sitting here in front of me that I like so much and produced what he says he does. You got to have these jewels, folks. It’s important. Also, Snapdocs does such a great job. We’re working when it comes to eSignatures. When you see the name Snapdocs, it can be slightly misleading. Go back and read the interview that we did with Vishal Rana back on September 13th, 2021.

It’ll give you insights. This is one of those leading technology companies that is coming up. I’m telling you, pay attention to what’s happening at Snapdocs. Amy Moses and I are good friends and we’re texting back and forth on all the latest developments. I got to get them back on talking about it. Also, a special thank you goes out to my co-host Jack, as well as Rob, Les, Alice, Allen, and Matt. They have further contributions to this show each and every week. Now, let’s move into the Hot Topic segment. We have, as a special guest, Peter Paglia, Chief Strategy Officer and Chief Revenue Officer at HomeBinder.

We’re going to be discussing how home buyers are helping lenders become more valuable to their referral partners and creating a greater level of stickiness. How can we hold onto the borrower through that experience and have a repeat customer? We badly need it, so we’re excited to get into that discussion. Peter goes by Pete, so not showing disrespect. Pete, good to have you on the show.

David, thank you so much. I really appreciate the time.

You bet. First of all, I always like to get our audience and let them get to know you a little bit. Tell us a little bit about your journey, your background and what has led you to a HomeBinder.

Thank you very much. By the way, I’m also in the Northeast here in New England, so winter is not far away. I wish I were down South. Thank you very much for the time. I really appreciate it. You guys do so much important work for the mortgage industry and very valuable stuff. In terms of my background, David, you’ve mentioned drones. I’ve spent my entire career in technology, mostly in the venture-backed technology space, building tech companies. I’ve got an engineering background, so like most engineers, my mindset is about solving problems. I’ve always had a particular passion for figuring out how technology, back to your point about drones, can solve complex business issues.

This has led me into the startup world throughout my career in markets such as mobile, telecom, IoT, and automotive. Coincidentally, one of the things that you talk about with unregulated drones is interference. A lot of the things that we used to work on is how to mitigate interference when drones are flying or even autonomous vehicles are driving. There are lots of impacts of technology on the business. In terms of what these markets have in common, there’s an interdependent ecosystem, and all of these businesses are trying to solve hard problems for the consumer.

That’s where I’ve spent a lot of my time in my career, working with businesses to determine how they can deliver high value and sustainable value for the end user. With regards to HomeBinder, I actually met the Founder, Jack Huntress, back in 2019, and I immediately fell in love with the concept of what Jack was building. Jack is trying to solve a problem for homeowners that, quite frankly, many businesses have tried and failed or are certainly not being successful at, which is automating home management.

What we’re doing in uniquely is we’re trying to automate home management by working with the businesses that serve the homeowner in doing it in a way that is not just adding value to the business itself but at the end of the day, driving engagement with the homeowner. What that requires is it has to be trusted, private, reliable and engaging so that the consumer will ultimately use it. At the same time, businesses will see value in it. This is not an easy problem to solve. It’s something that’s resonated with me because these are the types of things I’ve done in my career. I’ve been with HomeBinder now for over two years and helping lead the business strategy.

I should give a shoutout again to Johnna and Kerri Milam of DepthPR. They’re the ones that encourage and introduce us. The reason we’re here is because a lot of our lenders face the challenge of staying connected with their buyers after closing. I want to get your thoughts on the problem, and then we’re going to get into a little bit about how you solve it. Are you seeing this from your perspective? Are people struggling, Pete?

Absolutely. David, it’s true that I guess I’d say staying connected with the buyer after the loan is closed is an issue. We consistently see that it’s not unique to the mortgage industry. More importantly, it’s not just about staying connected. It’s about staying connected in a way that is supportive to the client so that they want to continue the relationship after the transaction. Quite honestly, we see this throughout various businesses servicing the homeowner.

If you think about the insurance industry, for instance, agents tell us all the time that homeowners reach out for two basic reasons. One is to file a claim. The second is to compare rates when they’re looking at maybe a renewal. Both are very transactional. Insurance providers, by and large, are now starting to look at ways to be less transactional and thinking more about being supportive of the long-term relationship with their clients in a way that not only benefits the homeowner but can retain that relationship.

Coming back to the mortgage industry, we know statistically retention rates are quite low. You alluded to this at the outset. Many of your followers know the stats from Black Knight at 82% of borrowers will work with a different loan servicer for the next transaction. It’s incredibly high and we see this as the highest across all the businesses with which we work. At the same time, we believe that because this transaction is so important, it represents a great opportunity to improve that churn rate by engaging differently. What do I mean by that? You’ve got the opportunity to reimagine the role that a lender plays in borrowers’ lives.

Technology is available. Increasingly necessary in order to engage the borrowers early to provide them an excellent client experience throughout the loan process. Something quite frankly, borrowers have just come to expect because if you’re not doing it, your competitors are, but that approach is largely focused on delivering value up to the point of closing. What gets missed often is that younger first-time homeowners that represent the largest demographic are now overwhelmed with the concept of managing their largest asset. We consistently hear questions and comments from homeowners with things like, “I have an HVAC filter and I need to service it. Where is it and who can help? I didn’t realize I needed to sweep my chimney.”

The last time when we bought a house, we failed to ask the previous homeowner when was the last time they had the subject tank pumped or a couple of other things. I want to get Alice in the discussion here because I think where you’re going with this is really starting to get exciting. Alice?

It is interesting because you’re right and even as a lender, I want to make sure that house is getting maintained and there’s a benefit in it for the lender. What is it that you think a lender can do as a value add? We all love that we can stay connected with the borrower after closing. What do you recommend?

We’ve done several surveys. We work with not only the businesses, but ultimately our homeowners are the end user here. We found that 68%, that’s over 2/3 of our new homeowners, are looking for help to manage their home. That can come in various forms. I don’t know about you folks, but I’m a fairly organized person and I’ll use spreadsheets to organize things that I need to do, like fall maintenance. I know I’m the outlier. Most people are looking for guidance and help. Ultimately, everyone wants to work with trusted sources. The first thing I would suggest is start with education. Not to pick on Millennials, but this is a demographic of homeowners that value being educated about home management because, as a group, they know less about home management.

We probably have personal examples to cite this. I’d say we know some lenders do an excellent job at educating their clients. We’ve got some that provide things like an ebook that helps homeowners manage their property. What matters here is that the homeowner feels that the business wants them to be successful. In fact, if you’re looking at buyers now, they’re using technology to manage every other aspect of their life, whether it’s health or financial management. We often hear from people that, “I’ve got an app for everything else except my largest asset.”

I’d say education is first and delivering communication in a way that engages the borrower to want to take action. What do I mean by that? We keep emails from businesses that say happy birthday or something similar. These are personal, these are nice, but everyone’s busy and these reminders don’t rise to the level where homeowners want to take action.

I’d say that the action could be related to maintenance, preparing them for a weather event, or refinancing. I see some businesses doing a very good job here, but if you can implement actionable communication that is going to benefit long-term that client, you’re going to retain those relationships more. Our approach here is we focus on peace of mind and home value. If we can help homeowners and our businesses help homeowners in those two areas, we believe we’re educating and providing actionable communication.

I like that term, Jack Nunnery, actionable communication. How about that novel concept and then the stickiness that comes up? What are your thoughts on all this?

David, I love what I’m hearing because I know you, me, and many of your audience have been the victims of a drip ad campaign from a loan officer who did our house a few years ago. It adds no value. I don’t like dripped on and I’m sure your audience doesn’t like getting dripped on either. What Pete is bringing to the table is value-add to the first-time home buyer for sure. Obviously, it could add value to someone who’s owned multiple homes throughout their life, but Pete was focused on the Millennials.

Let’s expand that a little bit to include first-time home buyers. I think that whole segment could benefit from HomeBinder, but it leads the realm of the drip ad campaign and takes it to a whole another level. What Pete is trying to create, and this is a watch phrase for everybody that’s tuning in to this show, is creating the culture that is a client for life. That’s what we’re trying to do, and dripping on periodically, we’ll never get you there, guys. It’s providing value in your communication or marketing campaign to your customers so that they become clients for life.

How are you doing that? Talk about that.

We talk about fundamental tenants bring peace of mind and home value. What we do is we provide a home management platform. You talked about obviously on the top of the show about what’s going on with rates, the market has been hot clearly. With rates on the rise, I saw an interesting stat last week that loan refinance originations are going to expect it through the MBA to decrease by 62% in 2022. When you start to think about a more purchase-focused market, you start to think about your tech stack and what you’re implementing, not only in the customer acquisition side. You start to think about what you can do on the customer retention side. What HomeBinder can do to help support that close experience is effectively a digital closing gift.

Referral Partners: A home binder can help support close experience and customer retention through an effective digital closing gift.

I want to hear that again. A digital closing gift. In other words, it’s a digital product you can have in your phone. I’m assuming it is mobile based. It’s a mobile-optimized portal that homeowners are going to be gifted when the loan is closed. Another important point on this is when I first heard about this, I go, “My wife is going to love this because she’s the one with the spreadsheets and the reminders written down everywhere.” I tried to sign up for it as an individual and you can’t. It’s one of those things that, at this point, the way you guys have a design, it’s available through the lender or I guess, the realtor or something. Talk a little bit about that.

In fact, we used to offer this direct to consumers and we turned that function off. It points to what we’re trying to do to help businesses. We think by delivering this through businesses, when not only helping those business partners because they only can deliver HomeBinder, but it also delivers more value to the homeowner. It is because of the automation we built in to automate the data that comes into HomeBinder.

When you get your digital closing gift, you’re centralizing everything about home management. It could be the closing docks, maintenance reminders, appliance recalls, or the home contractors that are in your area or home contractors at your realtor your home professional is recommended. Projects home value right down to the proverbial paint colors by room. HomeBinder is branded by the loan officer and the realtor, so it keeps the lender and the realtor top of mind in a way that is educational. Back to the point earlier, being educational, supportive and ultimately communicating in an actionable way.

Alice, I’m thinking about when you moved from Michigan to Ohio and sold that home you guys have been in for so long. All the history that goes with that house, literally down to where you bought the paint and the paint number. We buy our payments insured, have the numbers written down, and book support. The valuable information like that, Alice, for the new homeowner or Jack, you built a new home. All the thought that went into this, “This may sound a little funky in this part of the house, but here’s why we did it.” It helps people appreciate the personality that goes into it. Alice, what are your thoughts?

I agree on both sides. I’m the homeowner who’s trying to keep track so I can leave proper records behind, but then we moved into an area we didn’t know anybody. Am I understanding your app to also be providing information about service providers?

First of all, when we talk about centralizing home ownership and home management. We look at it from the lens of we want, first of all, one place. We, as homeowners, ideally want one place to manage our home. We don’t want to look at business cards in your drawer to find that contractor or file cabinet to find documents or financial records and yet another location. We are looking to centralize every aspect of home ownership, including pros. When you go into your personal HomeBinder, you’re going to be able to track maintenance, appliance recalls, and add or complete projects and then you can search for pros.

Referral Partners: When talking about centralizing home ownership and management, look at them from the lens of what you want to achieve in one place.

Think of it as a LinkedIn approach rather than a pay-to-play type of service. We, as homeowners, are first going to want to work with home pros that we’ve worked with before. Those are folks that you may have added to your Binder. Secondly, it would be professionals that were recommended by your realtor, lender, or home inspector. Those pros can be added by those businesses to your Binder for you. The third are people that maybe we trust because they’ve done a lot of jobs in our geographic area, who has what plumber has done a lot of work within 10 miles of my home.

The HomeBinder community, as a result, has pros that are populated in all of those three categories that you have worked with before, those that your businesses have recommended, and they can add it into your Binder for you, and then those that are in your geographic area. We’ve got over 25,000, and growing, pros that have been put into homeowners’ binders as a result.

I started thinking about the possibilities of the stickiness of this. That’s really what this is about. We’re trying to create ways in which you can connect and stick with the home buyer. You appreciate the happy birthday stuff, but to be honest with you, it’s bringing value. It’s nice to be thought of, but that’s coming out of a drip campaign or out of CRM. It’s not meaningful. Send me something like, “It’s the fall. Here are the previous gutter companies that the previous homeowner used. The other services in there.”

What I want to get is what boundaries you put out. Is it only the current homeowner that’s banning the Binder that they inherited? How does that work, and what can go into it? Can loan officers or loan originators or realtors add other services? Alice talked about moving into a new community like we did. We sold our home in Southern California and the business. We moved out to Texas and didn’t know where to go for dental or the doctors and all that. There was so much information that we badly needed. One of our friends who used to live here sent us a notebook that they had the top fun things to do when you live in Austin, Texas. What are the things that can, and who is putting that information in there?

That’s a great question, David. Firstly, one of the cornerstones of the approach here I talked about at the beginning, automating home management, is automation is probably one of the most important aspects. We work across the ecosystem. Whether you are a home inspector, mortgage lender, insurance provider, contractor, property manager, or anyone that can touch a residential homeowner can be a business partner to HomeBinder. What we’ve done is we’ve built integrations across those different markets that will automate the population, creation, and updates of your HomeBinder. On the mortgage industry, for instance, we’ve built integrations with encompass on the LOS side and recently announced an integration with mortgage cuts.

What that means effectively is when the loan closes through that integration that we’ve built, the Binder automatically, with zero work required by the loan officer, gets created for that homeowner. The homeowner gets an email or text to accept their Binder, and then when they accept their Binder and they look inside their Binder, all the loan docs that have come in from the transaction are automatically populated in the document section. That’s one example. We think of three ways data comes into a Binder.

One is certainly you and I, as homeowners, can enter anything we want, but more often, it’s coming in through public sources like automated valuation tools. ABMs or through integrations that we’ve built, like encompassed. That data can come in through integration, public record or, in the case of appliance recalls, you can use our technology to take a picture of that appliance, and at lowe’s and then we’ll load all the call information for notifications that you would get in the future on that appliance.

As I’m thinking about this, Jack, I’m thinking about what this could do if you’re in a competitive area and you’re trying to sell your home. It’s a seller’s market, so your homes for sale are probably going to get bought if this thing flips and gets into more of a competitive market. If you’re looking at two homes that are about the same and one has a HomeBinder attached to it, could that enter into a decision on which home you buy? The data is so valuable when buying a home.

David, think about it. If I were to go buy a used car, what would be one of the first things that the car passed? Here, I’m going to get the history on the home, data around appliances, and data around service providers. Pete had me when he said it’s branded for the lender and the loan officer doesn’t have to do anything to set up the home buyer for the consumer.

I was going to say, Jack, you mentioned the carfax. We hear that analogy quite often. One of the things that’s very cool about our vision is that ultimately you and I, as homeowners, would never buy a home without a HomeBinder attached to it. You want to know the history and people that have worked with and on that home. While the HomeBinder is certainly branded by the businesses and the businesses can contribute to your Binder, you are going to engage with your Binder that it’s private and it’s reliable.

Referral Partners: While the home binder is certainly branded by businesses, and the businesses can contribute to your binder, you must ensure that it is always kept private and highly reliable.

Your Binder is private to you during the course of that ownership and all the home value, everything that you’ve done, all the capital improvements, everything that’s been going into that home and all the maintenance that you’ve done is being curated inside your Binder. When you go to sell that home with simple clicks of a few buttons, you can curate a public-facing version of your private Binder, which is a seller report. The analogies we hear is carfax for the home or Ancestry.com for the home.

We’ve got realtors that have done this. You’re not only maximizing the transaction value, but you’re passing on to the next owner information that will be so valuable, so they’re not starting from the beginning. If that’s one of the reasons why the company was built, is to really build out that seller report at the end of the day where we know that given the choice of buying a home with or without a HomeBinder seller report, all else’s being equal, you’re going to go to the home with all money.

Earlier, you were saying about spreadsheets and business cards. That’s the world I live in. I have a spreadsheet and a bunch of business cards in the top drawer of my desk. Taking that and putting it in this tech platform makes so much sense to me.

Alice, I’ll go to you for the last comment here. The marketing tool seems just so obvious. There’s so much other value that comes from how we can stay in touch with customers.

I think so too. It sounds like it’s really user-friendly. At the end of the day, it’s a great idea, but it’s got to be something that people want to pick up and use. Can you tell us a little bit about what the user experience is like? How would you describe its use?

We define engagement in two ways with the homeowner because, at the end of the day, homeowners have to want to use it to provide value to both the businesses and the homeowners. Our analytics show that homeowners are going to engage in their Binder. When I say engage, they’re going to do something, whether it’s adding a project or checking their home value four and a half times a year, which is our goal. You’re not going to go into your HomeBinder weekly, but you’re going to go into it maybe more than once a quarter. Again, every time they go into their Binder, the businesses that support them are branded. The second way that people engage in the user experience is primarily through notifications that are these actionable maintenance reminders.

They’ll get these branded maintenance reminders about 6 to 8 times a year because they’re property specific and very actionable. We see 50% engagement rates. You’re not going to get that from a CRM clearly because this is not a happy birthday. This is something that is very property specific, and because it’s branded, the homeowner can now take action. If it is a refinance opportunity, obviously, they can reconnect with their lender. If it is something that is more maintenance related, they can reconnect with the pro. Those are the two ways we track engagement. That 50% off of maintenance reminders a little over once a quarter of people are going into their platform and actually doing something.

It’s pretty amazing steps. How can people get ahold of you?

First of all, if you haven’t been on our site, it’s HomeBinder.com. There are some interesting videos there as well as a homeowner video that, in 90 seconds, we’ll tell you what you’ll get as a homeowner from HomeBinder from a business partner. If you would like to reach out to me directly, it’s [email protected].

That’s pretty easy. Great idea. I am always looking for new ideas. I love people taking action on this show. Readers, take action on this. It’s really important. Again, Jack, thanks so much for joining us. Pete, it’s been very informative. We really appreciate you being here. I encourage our readers to get ahold of you. Thanks for coming on. Another shout out to DepthPR and Johnna, who handles your account, and of course, Kerri, who owns the firm, for helping us bring this current information to our readers. It’s very good. I appreciate it much. Thanks so much for being here. I look forward to having you back again.

Keep us posted on how the progress is on your company. Folks, next week, we’re going to have Dale Larson III and Dale Larson, Jr. It’s a father-and-son team that started Modex, one of our sponsors. We’re going to have them come on and start talking about recruiting some of the latest stuff that’s going on in this area because many people are looking at this next coming season. Who are we going to be recruiting to? How can we do that? We’ve invited Dale Junior and Dale III. Come on to the show next time to talk about some of the latest developments in that area.

I look forward to all your feedback on what you want on the show. We’re getting a lot of what we do. We respond to specific requests, so I love the feedback. Be sure to share this with others. I want to say a thank you to our sponsors Finastra, the CMLA, Lenders One, Insellerate, Mobility MMI, Modex, MBA, Knowledge Coop, Mortgage Collaborative, and Snapdocs. Check them all out on our website, LykkenOnLending.com. We’ll look forward to having you back here a week from now. Everyone, have a great week. Talk to you soon. Thank you.

Important Links

• Peter Paglia
• HomeBinder
• Jack Nunnery
• Justin Demola – Previous Episode
• Mortgage Bankers Association of America
• Finastra Fusion Mortgagebot Solution
• Insellerate
• Lenders One
• The Community Mortgage Lenders of America
• Knowledge Coop
• Mobility MMI
• Modex
• Snapdocs
• Vishal Rana – Previous Episode
• Amy Moses – LinkedIn
• DepthPR
• Ancestry.com
• [email protected]