Lykken on Lending

In our Hot Topic this week, we have Andria Lightfoot, Chief Customer Officer @ SimpleNexus, & Selene Kellam, Chief Operating Officer @ Thrive Mortgage LLC, who will discuss with David some exciting things that are relevant to what’s going on in the industry. As well as some of the hot trends that are coming and what they think people are feeling is going to be a barrier. They have got a lot of bullish predictions coming up!

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Top Strategies For A Purchase Market With Andria Lightfoot And Selene Kellam

We’re so glad to have you joining us. This show is created by mortgage professionals and it is for mortgage professionals. We’re so grateful to have you as a reader and joining in with us. Our commitment to you is bringing you timely information you can read anytime and anywhere. I’m excited about the Hot Topic segment. For those of you reading the first half of show, be sure to stay tuned as we have Andria Lightfoot and Selene Kellam joining us from Thrive Mortgage.

Andria is SimpleNexus. I got to tell you, we pre-recorded this conversation, and after we pre-recorded it, I went in the house and told my wife, “I enjoy podcasting so much when you can get a pre-recorded interview.” We did that. You’re going to be reading in the Hot Topic segment. You’ll understand why. It was dynamic with so much information, and yet it was such a fun group. These two ladies are amazing. You’re going to enjoy this interview. Stay tuned to the Hot Topic segment. We’re thrilled to be a part of the Industry Syndicate. Check out all the podcasts at IndustrySyndicate.com.

We’re thrilled to have The Mortgage Bankers Association of America as a sponsor, as well as Finastra with their Fusion Mortgagebot POS. It personalizes the application path based on borrower-specific information, loan type, and much more. Check out our interview we did with Troy Anderson on April 18th.

Thrilled to have two of the top co-ops as sponsors. Lenders One as well as The Mortgage Collaborative. They do a great job of helping lenders and vendors connect with each other in a meaningful way, providing more content about what’s going on in each other’s operations. Imagine getting together with someone and you want to know what’s the competition doing. How are they going about this? It’s sharing the best practice. There are so many things about these two co-ops. I encourage you to get to know.

Total Expert. It turns the customer insights into actions that increase loyalty and drive growth for banks, lenders, credit unions, and independent financial institutions, IMBs. I’m going to be speaking at the Accelerate ’22 conference in Nashville. Josh Lear and I are going to be sharing a breakout session, how to recruit and attract the top talent in.

Knowledge Coop. Check out their learning management system, as well as Mobility MMI and Modex. They do a great job at helping you recruit top Los, as well as Snapdocs. It’s working backwards from the future, where every closing is flawless and provides an amazing customer experience. Check out Snapdocs.

As well as SuccessKit, they do a great job with prospect stories, results, case studies, etc. They tell your story well. That’s what I’m trying to say. Lender ToolKit, FormFree. Pleased to have both of these companies as sponsors and Simple Nexus. They do an awesome job. Some of the things that the leadership that they’re bringing to the industry, again, is excellent.

Of course, we have on the show, Andria Lightfoot, which I’m excited to have with us from SimpleNexus. DW Consulting, which works with you on your LinkedIn profile. Good to have you all here with us. Thank you to Rob, Les, Alice, Allen, Matt, and Jack for the contributions each and every episode. Welcome to the Lykken on Lending Hot Topic segment. It is a very exciting. This is one of those really fun interviews.

I’m so excited to have joining me in the Hot Topic segment, Andria Lightfoot and Selene Kellum. They’re both here to talk about some exciting things that are relevant to what’s going on in the industry. Andria Lightfoot is with one of our sponsors. She is with SimpleNexus. Selene is with Thrive Mortgage here in Austin, Texas. We’re so glad to have both of you here. Andria, let’s start off with you. Give us a little bit of your background. Welcome to the show.

Thanks, David, so much for having us. Thanks, Selene. She’s one of our great partners here at SimpleNexus. We absolutely are thrilled to be here talking about some of the hot trends that are coming. What people are feeling is going to be a barrier, but we’ve got a lot of bullish predictions coming up here for you at the mortgage.

I’m the Chief Customer Officer with SimpleNexus. What that basically means is if you’re looking for sales professional services or support, I’m your gal. I came to the dark side of FinTech, as I like to say, from being a mortgage practitioner. For those of you on the phone who are in the trenches, I was there in 2020. I was Chief Operating Officer for George Mason Mortgage, a subsidiary of United Bank out of Parkersburg, West Virginia.

Prior to that, I’ve been at IMBs. I’ve been a technologist for change management and innovative solutions for all things mortgage. We are so excited to have yet another ops manager. A gal who understands what it takes to get those loans through the door and do it quickly and efficiently. Selene, thank you so much for joining David and I as well.

Selene, good to have you here.

Thank you so much. Very proud partner of SimpleNexus. I love working with Andria and the team over there at Simple Nexus. COO, Chief Operating Officer here at Thrive Mortgage. Been working for Thrive for many years. I’ve been one of the biggest champions in finding ways to attract new talent to our industry. That’s something you’ll learn about me.

I love coaching and I love finding new ways to bring in wonderful new talent to an industry that’s given so much. That’s another big piece of it is why we’re a proud partner of SimpleNexus. Innovation, find solutions, smarter ways and better ways of doing things is obviously something that makes this all so fun, interesting, and challenging for us as well.

Selene, I shared that with you. I want so much to help get the next generation excited about mortgage lending and in this industry. That hasn’t been the easiest thing done, so I celebrate that with you. It’s outstanding and I love innovation. That’s why I’m so thrilled to have SimpleNexus as a sponsor and have the both of you on here to talk about it. Let’s get off started with you, Andria. Let’s start talking about what you’re seeing in the industry. There are a lot of layoffs happening. How is SimpleNexus performing with all these various concerns going on?

First, David, for those who aren’t aware, SimpleNexus is now a division of nCino, who’s the world leader in cloud banking out there. If you’re not a FI or Bank Credit union, that’s fine. We’re still super hyper-focused on mortgage. What that does for us is it’s built in a little bit of security and stability for us because we’re also diversified in our portfolio beyond the mortgage industry.

We’ve got banking in our back pocket as well. What’s exciting for me, when you’re looking at this downturn is, I’ve been doing this for a while, too. We all know what the up and down look like in mortgage. What I tell my team is there’s a psychological principle when you’re riding a roller coaster. If you grip on, white-knuckling it, you’re going to dump a bunch of stress hormones into your system.

Purchase Market: There’s a psychological principle when you’re riding a roller coaster. If you grip on, white-knuckling it, you’re going to dump a bunch of stress hormones into your system. It’s much more fun on the ride if you put your hands up and roll with it.

It’s much more fun on the ride if you put your hands up and roll with it. We’re looking at performance. What we do best is purchase business. It’s how we started this company with Matt Hansen, the cofounder. Purchase is going to be king. That’s not a shock to anybody, but we are very excited to see that we focus on your loan officers from our pricing model.

What are you seeing out there within your user group as far as their attitude? What are you sensing as you’re talking to your user group? Optimism? Hope? What are the factors that would lead to one way or the other, Andria?

The trifecta that I’m seeing is, one, those that already had purchased the retail business. Thrive certainly is in that bucket. Selene, you guys are heavy in that purchase market. What it takes to drive purchase business is you understand it’s about relationships and not just the rates. We don’t get wiggy in a rate environment that’s going up and down. We know how to sell into that on the relationships.

The second is products, and I mean loan program products are going to be exciting, David. We’re going to see a lot more in the cashout space. I think even with ATR/QM Rulings, you’re going to see rehab loans, reno loans, things coming out of the woodwork that we were all too busy to focus on. I love it when I see more of these community seconds and unique products that’ll start developing, including ARMs. ARMs are coming up. They’re already up by 10% per Optimal Blue.

It’s an important point that nCino has multiple interests. Their investments have been not just a mortgage. I think that’s encouraging for anyone looking for a vendor because they’re going to be able to weather the storm that’s ahead of us better because of that. Andria, when you’re looking at advice you’re offering to people competing in this market. What are the opportunities you’re seeing and what would be your advice?

First, I’d say make sure that you understand what your technology’s doing for you. A lot of us might have gone out and had been flushed with cash and we made some purchases. Now is the time that we talk about in change management, where we trade off being too busy for too poor. That is an actual metric. If you’re on the call and you’re saying, “Andria, I’m going to cut costs, what does this have to do with me?”

In fact, you might want to look a little closer at your technology spend. We know next to compensation from a loan per FTE or cost per loan perspective. That’s going to be your second spend oftentimes on a profile basis. To increase your operational efficiencies, just take a moment and now’s the time to evaluate your tech.

When we are focusing on the relationships built through good technology, I want to point out a cool stat that we had our friends at mortgage run for us. Earlier in Q1, they went around and talked to a bunch of borrowers who were looking at the shifting interest rate environment. They said, “How did you choose your lender?”

Funny enough, 89% of borrowers in Q1 made a relationship-driven choice. Technology was a component of that choice. Not just, “I knew you,” or it was a friend or it was a referral. Our platform is so much more than simply doing an online application. Anybody can do an online application. We have a mobile app that actually lets you be in the back pocket of not just your realtor. I mean this literally. Your phone is in their back pocket. You are in their back pocket as well as your borrowers and the friends of their friends, how they’re sharing that app and sharing your good name out there in the environment that we’re in with purchases.

I encourage readers that are looking for that. You got to go get a demonstration of this product. Yes, they’re our sponsor. Yes, I’m promoting them. That’s what we do here, but it’s more than just that. It really works and it’s working so effectively. Selene, you are a big advocate of it. I was caught up in your enthusiasm for this product. Talk a little bit about the steps Thrive is taking to adjust in this market, Selene, and how simple Nexus has helped you.

First of all, I want to comment in terms of the relationship lender. That’s something that Thrive has been leaning in on for the last 15 to 20 years. It’s been that relationship lender. SimpleNexus really compliments Thrive well. We’ve always been that relationship lender. One of the focuses is on that referral business. Technology such as SimpleNexus allows us to do that even better than before.

Talking about the adjustments to the market, David, very similar to what you heard from Andria. Thrive is focusing on innovations and efficiencies. We’re focusing on those experiences that, whether it’s our borrowers or if it’s our builders, our realtor partners, or even our title companies, who are some of our biggest advocates, as well as the product availability.

That’s going to be all over our annual operating plan for Thrive in 2022. As we see the industry, seeing these changes, to your point, we’re in that storm. In fact, I saw data from the Independent Mortgage Banks around industry experience is the largest quarterly drop since 2017. As a result of that, there’s been a massive increase in the cost to originate loans.

The data that I saw, that was nearly a 33 basis points increase over the last quarter. For us, the focus is going to be looking on ways to grow our business in this type of market. That’s going to be an emphasis on those products. It’s also going to be the emphasis on the experience and the focus on efficiencies. In terms of that, Thrive is looking to lean into maybe new innovations but also the technology solutions that we currently have that allow us to work smarter. Some of those existing technologies are absolutely SimpleNexus.

I respect Thrive. Roy, Michael, and the whole family that owns the company and still leads the company brings a healthy perspective to this. There are so many people that are struggling, Selene, with the cost of technology, but you don’t see it as a cost, you see it as an investment. I’d like to have you go into that a little bit. Why do people need to have a different mindset about the technology spend?

I label it as switch cost. Everybody knows what switch cost is, but it’s the start, stop, and continue. That, I would say, is a real-time suck, but it’s also the cost suck that we see in terms of mortgages, when we look at those operational efficiencies, that allows our thrivers to be more productive. SimpleNexus has allowed a lot of different features. Not just the app feature.

Obviously, the app is the very first and foremost thing that we are looking to achieve. How do we get our borrowers to get that application done? Complete the application, upload their documents, and allow us to get our operational start. There’s so much more than that. Beyond that application experience, you have the DocuSign integration, that’s the ability to eSign documents throughout the transaction.

That makes it more cost-effective, that makes it more efficient for Thrive. On top of that, you’ve got conditions, the ability to collect eVerifications. Even some of those more traditional things through that application, through push notifications and chat features that again allows us to be more efficient. Allows us to close loans faster, allows our teams to be more effective.

Nexus Pay, that’s another big shout-out, a tool and a feature that SimpleNexus has to offer. This is going to be a huge cost type of feature because it allows us to smooth out the bar experience. It also allows us to collect those appraisal fees up front. Making sure that our branches and our P&L are not absorbing a ton of costs that we’re not closing on loans.

Last but not least, I have to give a shout-out to Digital Closings. This is not only a convenience and speed for borrowers during the closing experience. It creates speed and quality for the Thrive operations team. Technology helps us ensure that we have that complete and accurate signing experience, which also allows us to reduce that time in the post-close process. We all know that the quicker we can close loans and get them off our books, the quicker we can collect that money. Most importantly, it allows that efficiency to our team. That’s a little bit of how we’ve leaned into the technology there at SimpleNexus.

What would you say are some of the best practices that you would advise lenders to adopt to be successful in implementing new technology? I share this knowing what I love about Thrive is Roy and company are so good about sharing their best practices with others. They want the whole industry to rise. Shout out to Roy and the team there for that attitude. What is your advice for best practices for lenders on implementing technology?

First and foremost, you got to know what you’re looking to achieve and then have a measurement to that. For Thrive, it was very simple. We wanted to add a better experience, not only for our consumers and our borrowers and our partners. We wanted a better experience for our internal teams. That’s important to us. We are a company of people.

Purchase Market: You have to know what you’re looking to achieve and then have a measurement for that. For Thrive Mortgage LLC, we wanted to add a better experience for our consumers, borrowers, partners, and our internal teams.

Knowing exactly what we needed and what we wanted was the first piece of it. Secondly was getting the buy. We don’t operate in a vacuum here. I don’t do loans anymore. I haven’t done loans in several years. It’s important to me to have representation from the business. That’s our loan officers, LO assistants, processors, their entire teams. Making sure we created a decisioning committee was important for us.

Tell me a little bit about the decisioning committee. You mentioned that, and I think that’d be something that others need to do. Sometimes decisions to adopt and implement new technologies is somewhat done in a vacuum. Not always, but those that struggle with that.

Going back to we want our people to be represented. One of the things that our National Sales Manager, Randell did really well and brought to Thrive was these committees. Whether that’s a cultural committee, marketing committee, product committee, or finance committee, in this case, our technology committee was made up of people that do loans. The changes that we make impact our loan officers and operations teams. It’s important that we, at the top, aren’t making decisions without their input. That was something that was important to us, not just in terms of our technology but almost all things that we do here at Thrive.

A lot of people roll their eyes and go, “A committee. I have another meeting.” Death by meetings, we’ve all heard that. When they’re run right with the right purpose and the right focus, they can be very effective.

David, I’m curious. On that committee approach, I’ve heard from many lenders that especially to get some great adoption, tagging those top producers first. People think, “I’m going to go to my low-hanging fruit. Maybe the low-risk team, they’re not doing as many loans.” Have you found that to be true as well that if you get some of your early adopters, your power users of technology, to be your top performers, but then it seems to catch more organically like wildfire?

Absolutely. When you can get buy-in and show that in numbers, your larger teams pushing more through the system, it does get your rising stars interested and excited about leaning in. That’s always a best practice. You’ll see that in our committees. A lot of that is represented primarily from sales. They’re co-chairing those with their sales leaders and then bringing in their support staff with that as well. It’s been a great feature for Thrive.

That’s a great point, Andria, that you raised. Who do we get buying in? When you get the leaders with an organization, they may not see themselves as leaders. If they’re a top producer, they are in effect. Everyone’s looking up to them. Andria, let’s get over to you and talk a little bit about catering to underserved markets. We knew products are coming into the market and many are seeing an expansion. For example, Hispanic consumers. Can you tell us a little bit about Nexus bilingual? I love this service.

Yes. Dovetailing what Selene was talking about for implementing new innovation and change, it’s first about understanding what’s that goal and objective we’re trying to hit. It’s not always just about. We’re not here to replace the loan officer. Let me be clear. We’re here to accelerate the type of work and create efficiency around what they’re doing.

When you’re looking at who is your audience, who is the borrower that you’re working with. We know already that Millennials are demanding, post-COVID, to have more digital means to interact with any kind of retail interaction, whether that’s online lending or that’s your brick and mortar. We know that there’s a demographic shift that’s already occurring.

They’re also showing up in big numbers for housing right now. When we’re looking at Pew Research and Institute and what they’re saying in terms of what’s coming in the next many years. We’re seeing a tremendous prediction of the uptick in Hispanic household formation. You need to be thinking about, “What is my access to the community? How am I speaking to that?” Just like you would in your strategic planning and marketing for generational access as well.

When we’re talking about reaching out to those communities, first and foremost, for Limited English proficiency, LEP. Our friends over at the MBA have a wonderful website organization that talks around this topic. We went out, talked to Fannie and Freddie and made sure we were totally kosher here. We have a product called Nexus Bilingual that actually invites in an opportunity just like Google does, to be able to translate your online application into Spanish.

I’m going to be clear, it’s not a real application. By definition, if you do a full 1003 rest of application, you got to disclose that way. What it is is it’s an opportunity. We took an obstacle an we turned it to an opportunity to start reaching out to that underserved population. That says, “I don’t want to wait for a translator,” or “This is really inconvenient that I have to come in and do it on paper to have it in Spanish.”

It’s been widely accepted. We have lenders on it today. It does not create any kind of issue regarding the salability of the loan with the way that we’ve positioned it as an opportunity. It’s kind of like a get started, not a full application. What I love about this is that it speaks to you what is your next move few years out. That’s a tough market right now, but this is not going to stay. There are 8.3 million Hispanics under the age of 45 who are mortgage ready now. Not only does this have an impact for 2022. This has an impact on your strategy and how you’re actually developing your footprint in whatever lending area you have geographically.

Are you looking at other nationality groups as well?

They’re claiming 40 years. That’s going to be the uptick in terms of demographics that are represented there. Of course, we’re going to start seeing Gen Z-ers trickle in here in about another few years. What’s interesting is that there is a new requirement for the addendum to the 1003 that will go into effect in 2023. For all my compliance geeks, if you’ve been watching that, that is definitely going to shift what we start talking about in terms of accessibility for languages.

It’s going to be literally a list that comes in an addendum to the 1003 that says, “What’s your language preference?” What we, as lenders, will be required to do to support that and make sure we’re facilitating that still remains to be seen. Keep your eyes peeled. That one goes into effect in 2023. Happy to post out that draft for anybody who’s curious on the show as well.

We’re getting ready to wrap this up, but Selene and Andria, I’m excited about the partnership. How does that work for the two companies? I’ll start with you, Andria. What do you find about Thrive that is causing for the relationship with Simple Nexus to work so well? Selene, I want you to go, too. You both have touched on it a little bit, but I want to dive a little bit deeper into this. Many people are partnering with technology companies, but they’re not doing a good job of doing that. I’m looking for some more insights that we could share with our readers. That causes for more meaningful connection and success in their technology implementation.

I’m going to quote Matt Hansen, our founder. He said, “We love our customers first and our product second.” Culture is big for us. Not all FinTech companies and SaaS companies, they claim customer experience is king. See how they’re actually talking to you, talking about your business, and caring deeply about the same problems that you’re facing. To me, first, it’s culture. You got to do a little bit of a check there on, “Do they deliver on their promises and have some integrity around that?”

The second piece is you’ll notice this feedback loop. Things are going on with Thrive. The way we’re soliciting information from our customers, it’s more than just listening. I tell my team on the customer side of the house that oftentimes, our definition of the problem is the problem. We actually train up and hire mortgage experts at SimpleNexus.

We don’t go out and just hire any old person who’s done tech at Amazon, Google, PayPal, or somewhere else. We’re looking for industry veterans who can come in alongside of a practitioner like Selene. Be able to immediately understand all of these very detailed regulatory capital markets, complex needs for our industry. What I’d say is make sure that you’re partnering with somebody who knows your industry because this one’s fun. It’s a doozy. Put your hands up for that rollercoaster. I’m all in. This has been my whole career. Just like you, David. Same with Selene. That translate on the way we partner with our clients.

Purchase Market: Make sure that you’re partnering with somebody who knows your industry.

I love Matt’s quote. “We love our customers first and our product second.” What an outstanding statement. I wonder if that is shared amongst the tech world. I challenge anyone reading this that’s in technology, do adopt what Matt’s saying. There’s some real wisdom in that. Selene, let’s get over to you from your perspective.

Andria and Matt Hansen said it so well. We are a company of people here at Thrive as well. We focus on attracting the best, humble, hungry, and smart team players who give their best. SimpleNexus absolutely is like-minded with Thrive in that. We’ve seen that. That’s why it’s been a very successful partnership and it’s been fun along the way as well.

They’re always willing to listen. They’re always willing to say yes when they can say yes and help us find the right solutions. In terms of the technology, to your point, there are a lot of technology solutions out there, but they really get it right at SimpleNexus. They understand what companies like Thrive and other independent mortgage banks. Maybe even other channels and types of business understand what they’re trying to solve for.

They’ve started out with a great application but look at all the features that they continue to add to it. We talked about Nexus Pay, we talked about some of the DocuSign integrations, and even our digital eClosing experience has been phenomenal. I can’t be more excited about the opportunities and the features that they’re going to add. It’s a great partnership and you’ve got to find those like-minded partners and lean in and partner up.

I could enjoy talking to the two of you because of the energy, the friendship, and the chemistry that exists here between the two of you. Also, I love hearing and getting the insights about the chemistry between the two companies and why it’s working so successfully. This has been a delightful time to gather. I want to thank you both for taking time out of your busy days to be here.

Selene, be sure to say hi to Roy, Michael, and the whole team there. What an amazing company that is there. For folks wanting to look for a great company, I recommend Thrive. They have a great culture. They’re doing some very innovative things, and you get to work with someone like Selene. How can you not like someone like Selene, Andria?

It’s been fun. Thank you so much. I appreciate the time.

Andria, I’ll let you wrap it up. Any final thoughts?

My final thoughts are, for 2022, don’t be worried to look for those obstacles and turn them into opportunities. The moment that we start getting too focused on what we don’t have that changed from 2021. The more we lose sight of how many broad programs, cash-out refis, even in terms of hybrid eClosing. Don’t worry, you’re going to be able to get the business through the door this 2022 when you’re focusing on purchase. Thank you to Selene and Thrive Mortgage. You guys are knocking it out of the park. We absolutely love working with you. Thanks, David, for the time.

This had been a joy. Folks, we’ve had as our special guests on the Hot Topic segment, Andria Lightfoot with SimpleNexus and Selena Kellum on the show. Thank you both for being here. Wish you both continued success. I encourage you to go back and share the show with others. A lot of nuggets in there.

I want to say a special thank you to our sponsors. Finastra, Lenders One, Mobility MMI, Modex, MBA, Knowledge Coop, The Mortgage Collaborative, Snapdocs, SuccessKit, Lenders ToolKit, Total Expert, FormFree, SimpleNexus. It is such a joy to have them as sponsors. Such a joy to have you as readers. Some of you have contacted me saying that, “We’re not seeing you updating the show.”

We have made some changes on who we’re feeding out to. There have been some hiccups along the way. I apologize if you’re not seeing it on your favorite feed. We’re in the process of fixing that and we’re excited to have this on even more platforms where more people can read this. Next, we’re going to have John David Mann and his wife Ana on the show.

I’m very excited about that interview. We’ll be looking forward to having you tune in and read this amazing interview that I did with them. We’re going to be talking about The Go-Giver series and specifically the latest book they published. I’ll let you hear about it and tease it up with that. Look forward to having you back here.

Important Links

• Thrive Mortgage
• SimpleNexus
• IndustrySyndicate.com
• The Mortgage Bankers Association
• Finastra
• Fusion Mortgagebot
• Lenders One
• The Mortgage Collaborative
• Total Expert
• Knowledge Coop
• Mobility MMI
• Modex
• Snapdocs
• SuccessKit
• Lender ToolKit
• FormFree
• DW Consulting
• George Mason Mortgage
• United Bank
• nCino
• DocuSign
• Nexus Pay
• Randell – LinkedIn: Randell Gillespie
• Pew Research
• Institute
• Nexus Bilingual
• John David Mann
• The Go-Giver