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0:02
Alrighty, you ready? Mr. Cantanella. Welcome to Breaking the Ice episode #2, The first one, mutual friend of both of ours. Actually, Sue Woodard was on the first one. So I I'm happy to have you on board for this one today. Man, I appreciate it. This is like breaking the ice for the second time. This is like breaking the ice for the second time. And then we'll do a third one and then a fourth one. So it'll be an interesting kind of topics from here on out. So lots of ice cubes to break, I guess, is what it's going to come down to.

0:29
So I've looked and you and I have been in the industry for for a long time. We, you and I have kind of talked about this topic before. You know we're getting into home buying season. In fact we're already there, right, and have been for at least a month or so, if not longer than that, especially in certain markets. But you know there's, there's tactics, there's things that people should be doing to tackle this, right. We're not in the order taking phases that we were in the last several years, right. This takes levels of energy, effort, work.

0:56
Leveraging the tools you have to be successful. So I'm excited to kind of talk to you about this because as a former loan officer, I'm not a loan officer anymore which means I did this very poorly. So take, take take what I'm about to say for what it's worth at this point. But but I I failure is how you learn the best lessons. That's right, that's right. The lessons, the lessons that we've learned over time. So but let's go ahead and jump right Chief lending officer, total expert, you know, great to have you on.

1:25
Before we jump into it, what are your thoughts on kind of the home buying season? We're transitioning from a really easy market to purchase season and so on, but give me a couple key thoughts you got, yeah, so listen, there's there's challenges that are out there, right. You still, we still got low inventory, we got rates that are you know going up and down week to week. I mean some you know half a point swings from week to week right now. So the volatility in the market is still pretty dramatic.

1:51
Everybody is still anticipating you know May is going to start a real good positivity trend with rates starting to trend downwards. But listen we've we've seen some positivity right. We got you know from March to to February we have locks increasing you know over 40%. So locks are we're certain locks go up, we're seeing applications go up as well from from March to February. So March is we're apps were up over 30%.

2:20
So we're definitely seeing the demand start to pick up and as time goes on consumers thought process around you know a two and a half 3% interest rate starts to diminish and and life events things that are going to naturally progress. A consumer to go out and be forced to go buy a home or refinance or you know pay off that student debt or that crazy amount of you know credit card debt they.

2:46
Have accumulated over the last year they're they're going to start to have to leverage their home equity that they've built up over time. So I think there's definitely some positivity in the market rates you know getting downwards into the fives will certainly make an impact and I think that's everybody's hopes over the next 6060 days hopefully that we'll start to see that pick up even more. So yeah, I think most originators sentiment is is starting to you know.

3:11
They're starting to feel the demand come in and they're starting to feel good about where the market's headed. I think it's starting to get back to quote UN quote normal, like 2020-2021. 2022 was not normal, right? So yeah, it's funny to mention the life changing events thing because that's that. We're going to talk about that here in probably a few segments or so, but like, how do you know when Dan Kent Nella wakes up one day and has another kid and needs a bigger house or an extension of the house, right. We're going to talk about how we try and keep people.

3:40
Abreast of those things as those kind of opportunities come up and and so on it's and and it's it's funny to say that the other part of it too, the volume kind of coming back is you know every so often I'm, I'm invited to customer calls believe it or not I'm they eventually every once in a while allow me out of the basement. But you know we were talking to what you know a couple of the processors at this organization and they were basically saying look my pipeline 2 weeks ago had five loans in it, right and it went from 5 to 28.

4:08
In a matter of a couple weeks, which now that's not a magical indicator that things are magically back, but you know, but that's the kind of shifts that we got to be, you know, responsible for because it's going to start coming back. So the question is how do you out of the 4200 lenders, registered lenders in the country, whatever the number is up to now, how do you kind of stand out, right? It's kind of what we're going to talk about kind of today. So, so you and I kind of talked about this. We basically broke it down into 33 buckets, right? One is around maximizing conversion and I'm going to use you, Dan, as example.

4:38
Dan Kent, Ella gets a new kid. How do I make sure that Dan calls Eric Quiella's totally awesome mortgage company, right. How do we maximize, you know, those, those conversions that come in? The second part is once we do get, you know, the lenders do get those customers, how do we help them, what tools are available to help them retain those, those relationships, right. And then ultimately how do you just take what you've done over the past several years, throw it out the window and kind of expand those partner referral business so when these cycles come around?

5:06
You know you're not, you're not going through the ebbs and flows as big as kind of your competitors and so on. So, so those are kind of the three big topics that we had, we had today, right. So let's jump in on the first one, right, maximizing conversion, right. So we had a couple topics there, product mix, affordability, glasses and and communication, right. So what are your thoughts on the product mix? Yeah, so obviously as the market has changed pretty dramatically from low interest rates to.

5:35
A new set of interest rates that are much higher than they used to be, You know, affordability is challenging. You got home buyers, existing home buyers that are trying to sit in their existing home for as long as possible, try to keep that low interest rate. So a lot of the market right now is made-up of first time home buyers and first time home buyers have a tremendous barrier of entry with home prices that have skyrocketed over the last years and you know increased interest rates so.

6:04
The top lenders that we're seeing have the most success and the originators out there in the community are really putting together a series of strategies that not only start to look at broadening their, you know it's not just 30 year fixed rate anymore. You know can I, can I use an interest only product or an ARM product or looking at my government offerings to get somebody in there. There's a lot of good DPA down payment assistance programs that the sales are are looking at to help really.

6:33
Combat the affordability crisis that a lot of these first time buyers are and the more success you have getting qualified borrowers in the door, the more success you'll have building, you know your referral based and your real estate agent network. Cuz they're gonna have more trust in you that the more potential buyers that they can send your way you're gonna be able to qualify them and ultimately you know add to their Commission pocket at the end of the day. So.

6:59
Looking at your entire product portfolio and really figuring out how you can you know implement sales strategies, you know the buy down is obviously super relevant right now as well. Can I get a knowing the rates are projected to come down in the next, you know 6 to 12 months, can I get a buyer in on a temporary buy down basis to get the home that they want today? Obviously we're expecting demand to pick up over the spring and summer months. So it's a great time to buy for for some of those cases.

7:30
I think, I think it's important to note too, is that one of the things that when when you hear things like product mix, right. I know that even I felt, I felt kind of into this trap way back when, 20s, nineteen years ago, whatever the hell it was. Seriously, I'm going to stop doing that. But this is terrible because every time I wake up, I'm like, God, I've been doing this for 20 years anyway, you know, I think it's, it's key. We're not saying go out and have your teams create new products.

7:56
Right. It's not, it's not that you've got to borrow that you've done a bunch of business with and they want to buy a second home in Guam. Like don't chase that right. Leverage the stuff that you have, right. And and understand there's a lot of new programs being out, but there's a lot of programs that have been in existence for a long time.

8:12
Absolutely. Yeah. Originators that stay close to what their companies are offering, whether it's a new state bond program that they launch or someone that they just always had in their portfolio, that they really just haven't took the time or needed the time to learn it, getting entrenched into your product offerings inside your organization is really important. That's right. That's right. And that kind of leads us to the second topic around this is around kind of put the affordability glasses on, right. It's no longer.

8:38
I mean, to your point, home buyer, first time home buyers is is, is a majority of the market today, right? They need education. They're not, you know, and and I I use the the Thanksgiving, the Thanksgiving table kind of as my my example all the time, right. If you go to my Thanksgiving, you know, my Thanksgiving dinner, you're going to have my parents, my wife's parents who are divorced. I mean, there's four of them, right? My, my brother, her brothers and stuff like that and each one of them.

9:03
Are in a different stage in their life, right? With different ways. They're going to interact with that lender, right? Like my dad will never, ever apply for a mortgage online. Never. Like, I don't care what people say, he'll never, ever do it right, no matter what the process is, right? My brother probably does half right. He may apply online and then be like, you know what? Now that I've done that, I want to call Dan and find out what the heck is going on with that loan. Absolutely. And then there's me who doesn't want to talk to anybody.

9:28
Because like I don't, I don't need it, I don't need any of that stuff. So I I'm self-service and things like that. But but we all all of us might go to the same lender, right. And then how do we then take, how does, how does Dan Kent now as a loan officer on this deal educate all these people on the different programs that are available so that you can provide those affordability options, right. So yeah I think I think everything leads with education these days especially with the big part of the purchase market made-up with first time home buyers that.

9:57
You know a lot of times I always use this the analogy with like loan servicing. We talk about loan servicing a lot like a first time home buyer has no idea what the hell loan servicing means. So you're leading with education but also talking about what we do and how you can help them, you know become even mortgage readiness and be prepared to to get qualified for a mortgage. What you know we have a lot of first time home buyers that can't credit qualify today.

10:26
So you know how can you make sure that you're incubating those, those consumers where you do have fallout and putting them on long term nurturing journeys and things of that nature with educational content that shows them how to improve their credit score, what they need to do. And then you know we're we're investing a lot into data and intelligence so that we can also tell not only did that consumer not credit qualify at the top of the funnel, but how do I know when they do so I can reengage that consumer at the right time and ultimately maximize my conversions.

10:55
That's right. That's right. I think you know Brian view right. So he's been out you know a lot lately talking about financial literacy, right. He's great what he's doing right. I mean I I wish there was a class in college around financial literacy, not I took economics, I took financials or one things right. But to actually like know how to go out and apply and what a mortgage actually means and things like that would be great. But I I I personally feel that it's up to us.

11:20
The industry, not just Dan and Eric, but the industry to be those consultants and take on some of that education burden because there there's a lot out there. You can Google whatever you want to and you may get 5 different answers, 10 different answers, whatever it is. So I'm a huge fan of it. We're going to do a whole series on education in general with with Susie Lindblom and Kim Hoffman, you know them as well. So we're going to, we're going to do it seriously. So cool. OK. So now that we've got it right, we've we've we've put in our affordability glasses on, right. I've talked Dan into into doing this.

11:50
Communication tends to be the biggest probably fault point that happens within this, within this entire process. It's the I don't have any news so I won't tell them kind of thing. I know it's a bit oversimplified and obviously speaking a bit kind of broad stroke but communication is always something. I don't know. I don't know if you can over communicate like I think there it probably gets to a point but I I don't know if I agree with that.

12:15
No, it's transparency is important, especially something as important as home purchase, right. I mean, it's probably the biggest asset in most consumers' eyes on the investment that they're gonna make there. So the more transparency, the better throughout the process from top of the funnel all the way through.

12:36
You know pass customer retention I mean and communicating them into the channel that they want. I mean do they wanna receive communication via e-mail? Would they rather receive text messages? Would they rather have face to face updates on a call. So making sure that you're looking at your whole customer journey and being flexible and injecting how you're communicating and what channel that consumer prefers in like you said you're three different family member cases you all.

13:03
Request different ways to communicate. Your customer journey should be tailored to that way so that you're given the best experience to you as an individual. Yeah, and leverage the tools, right? I mean, even though you may want a personalized experience like having an automated response might be enough cuz they may not know it's an automated response, but it's a comfort level. I think you bring up a good point like this is the biggest asset people own for the most part, for the normal person.

13:29
Yeah, I mean I just look at, I just look at all the great work that we've done together through our partnership of Encompass and Total expert. Like the more data that we can get in real time from the Encompass platform into ours makes the communication just that much more on point and that much more automated. Like you said, if you can deflect the day-to-day transparency and updates to not only the consumer but also the your referral partner.

13:55
They got just as much invested interest in that consumer having a great experience as well, right. So I love the partnership that we've built and continues to mature and getting data from your platform in a seamless way into ours just helps us be able to strengthen that communication in an automated way to the consumer. Yeah, and all ships rise right at that point, right. So it's funny that you mentioned the automation piece, right, cuz there's a.

14:20
Sense of fear around it. Instead it's like use it as an enhancement because if you leverage the tools that means I've got more time to make those personal connections. Pick up that phone and say hey Dan just give you a heads up. I've got a basketball game this weekend I'm going to be around let me know if you want to meet up whatever whatever the conversation looks like. Yeah I always use the the saying to originators like let me take away the day-to-day mundane activities and.

14:49
I wanna put you where you're building the most trust with the consumer or being able to grow your referral network as much as possible. Like, that's where I want you guys to spend as much time as possible. And typically they agree they should not be fielding phone calls on, hey, it's my appraisal in Is my appraisal in is my appraisal in. Those are things that we can absolutely automate for them. That's right. And people get hung up on that. I want you to automate the hard stuff for me. I'm like, I'm going the other way. It's like, let us automate the 1000 easy stuff.

15:18
So there's a lot of low hanging fruit, lot of low hanging fruit there, lot of low hanging fruit. So, OK, so now now we've got kind of topic #2 right, which is around customer customer retention. I think you threw out a stat the other day like 23% of customers return to their original lender somewhere around there, is that right? Yeah, I mean we're, we're pretty embarrassing in the industry as a whole that our customer retention rate still as an industry is still floating around 23%.

15:47
So you're talking about 77% of customers when they're ready to transact again they're using a different lender. So there's just there's so much opportunity when we, when we look at that and you know we got the some complexities inside of our industry with hey, you know you got this origination channel and then you're gonna sell the loan to the servicer and there's friction there. So there's there's definitely things as an industry that we have that's definitely more complex than a lot of other.

16:17
With industries, but we believe really it starts with understanding your consumer at a very deep level using data intelligence if you look at a consumer's profile. So we're investing highly into data right now and.

16:33
You know, really trying to build out the most comprehensive financial profile of every consumer that sits in our platform. And really it's it's all around, you know, what is their, what are their credit today? Not when I transacted with them three years ago. What is their, what has their income changed? Have they had any significant life events, You know, maybe they got married or at the chilling events, right. So I mean imagine, like, yeah, I always go back to like where I started in the industry and sitting behind originators and saying.

17:00
You know them trying to filter through their database to find opportunities and you know they're sorting by rates and things like that. And and I just would like it was like nails on a chalkboard. I'm like there's gotta be a better way And the better way is really just using data and intelligence to be able to say, hey this this consumer's financial profile or their life has changed in a way. Now I know how to exactly engage and things that I can propose to them that are gonna make you know them have an increased financial wealth over time.

17:29
So, yeah, we're investing highly into that. We're seeing some great results with our customer intelligence platform already and we're kind of doubling and tripling down on that in the future. Yeah, it's, it's a material impact to a lenders bottom line like to acquire a brand new customer costs a lot more than trying to get someone to come back to you. The cheapest customer that you can have is the one you already got. That's right. Yeah, exactly. I mean my neighbor, he sells, he sells cars, right, and probably 80 to 85% of his business.

17:58
Is somebody coming back? Right. So why, why? Why can't we apply that or why don't we take that same sentiment and same mentality? Why? Because it comes down to things that you guys are trying to solve for, right? You got to leverage the data that you've got. The information's there, right, You people, you don't have to be psychic to figure out when Dan gets married again. Those, those, those triggers, those events, those that, those data points are out there to to to mine and understand, to go out and actually you know.

18:26
React to those opportunities as they come up. So absolutely, I think you mentioned it the other day, your database is an appreciating asset. Use it. That's right. Yeah, absolutely. Yeah. I mean, if you're not looking at your database and appreciating asset, then you're really not utilizing it and optimizing it the way you should. That's right. And you're probably losing a lot of those customers. So you're probably in the bottom half of that 77%. Yeah, yeah. And this industry is full of data like to your point, we provide it.

18:56
On a regular basis, you guys collecting it and using it will create another subset of information that's going to be available to to use and leverage. So if you're not looking at your databases as an appreciating asset, you're going to be on the 77% side of it for sure. Absolutely, absolutely. Okay. Last and final topic I guess for now until we go on a tangent and figure out what else we want to talk about, but expanding your referral partners, this one I I don't know, man, I I can't.

19:26
I can't stress this one enough, right. It comes back to you. You got to have an engine that feeds kind of your your pipeline, right, whether it be and these things, these things take energy and effort to do, but they pay off in droves if you're if you if you do it correctly, right. And I don't mean just going to your traditional like the realtor networks and things like that. Those are all those are all very important things to do. But I think we need to start getting creative and looking even beyond that.

19:55
As well. And I don't know what that answer looks like, right. So I'd be curious to do, yeah. So let me just let me, I'll talk about a little bit about real estate agents and some of the things that I still think that there's a tremendous amount of opportunity there. And similarly, you look at a consumer and it goes back to using data and intelligence.

20:19
It's amazing if you talk to top originators and you say, hey, how many top, how many agents are you actually getting a lot of your business from? And most of them will tell you, yeah, 10 to 20, I get 80% of my business from and then there's some smatterings that make up the rest. And I said, well, what percentage of that business is are you getting from each of those agents? And they're like, well, what do you mean? I said, well, what if?

20:44
Bob, agent is doing 10 deals a month. How many are you getting? Yeah. Are you getting more and most of them do not know that answer. Yeah. So one of the things that we are doing is basically a lot of the things that we're doing on the consumer side from a data intelligence standpoint, we're looking at how can we bring those same data and insights on the real estate agent's side so that each originator now has a clear picture of.

21:09
Hey, this is the agent that I have a relationship with. He's doing 10 deals a month, I'm getting five. I understand the white space. I understand which lenders I'm losing to. And most originators are pretty smart to know where they compete and where they can win. So they can start to have some real conversations with those agents. Say, how can I get more of your business like on the consumer side?

21:33
The easiest relationship to nurture is the one you already have, right? So how do you get deeper in with the agents that you already have a relationship with? And it starts with understanding from a data intelligence standpoint how much of that business you have the opportunity to obtain. The other thing, if we talk about expanding your network, obviously builders have a pretty good edge right now being inventory super low.

22:01
So we're seeing a lot of attraction to get builder business and there's a lot of unique things that you can do for builders using the existing technology. Things like making sure you know what builders typically do not do over the 12 month span when they're building that home is keeping the borrowers apprised of you know updates and milestones through the build creation. So we're seeing a lot of lenders that are highly focused on builders business really trying to fill some of the gaps that builders traditionally have not done well.

22:29
Using our platform to really keep that communication and that transparency and fill some of those those voids that the builders have and build really close deep partnerships with builders. Obviously financial planners if they want to expand their network beyond those financial planners are still a great referral source. If you get in with a great, you know, some good divorce attorneys, those are always good. You get it, you know, sometimes get a trifecta from there.

22:54
Yeah, sure. Sell and sell and to to new purchases. Yeah, that's right. So you know, there's a lot you can do with agents. Again, you know education, education, education. If your your agents don't know all the unique products and offerings that you have, then they can't position you to help win, win that deal. So it's really important that you're not only educating your consumers, but you're also educating your referral partners as well the more you can educate them.

23:23
The more they'll see you as the expert and somebody that can qualify as many borrowers as possible for them. That's right. That's right. Because I mean they're they're in the same boat, right. They're trying to go out and attract people to to either list with them or help them find a new home or whatever it is, but they're not they don't control who their customer is, right. So if we know that that if we know who we're working with and the the your referral partners know that you're capable of taking care of these or even saying hey look I can do it better because I am taking the time to educate now granted.

23:52
These programs are available for everybody for the most part, right. So it's not, it's not a question of that. The question is are you the one taking the time to educate it so that they're the ones. Oh yeah, He Dan took the time to actually explain this to me. He knows what the, the, the types of, you know, homeowners that I, I typically attract and things like that. He's got programs that I know can fit, you know, into this even though someone else might have similar type stuff but they didn't do the exercise.

24:15
Actually go through it. So yeah, I mean listen it's a relationship business. It's a relationship business. Be seen as the expert build deep, deep relationships and you you'll win. Yeah, Yeah. And a lot of people one of the things we talked about when we were kind of talking about this topic, talking about this topic, talking about to talk about this topic, that's a lot of talking going on is you know and we we're kind of doing this on the on the marketing side, right, is how do we humanize you know this this.

24:44
This transaction, right. I mean you know, obviously it's very borrow driven, obviously very relationship driven. But we tend to look at things like, oh, I've got a file like how many times have you heard that I'm working on the file, right. And things like that. So it sounds stupid, but you can change that mentality, the, the nomenclature, whatever you want to call it and say, look, I'm working on Dan's loan or you know, just those types of changes, it sounds stupid. They're not technology driven, they're not like you know, but if you start to look at those things, start to humanize that relationship.

25:14
I mean it's it's like empathy what an emotional IQ 101, right. Just, you know relax, empathize and so on. Because again this is their biggest biggest transaction, biggest asset that they're going to own that drives family wealth like this is people want to work with people you know they don't want to be just seen as another transaction or a number in the system. That's for that's for Darn Shore. That's right. That's right. So.

25:37
A lot of things to do on kind of expanding the the, the, the referral partner things. So one of the things that that we didn't talk about which I knew here's here's the tangent, here's the tangent, so is you know we always talk about kind of the, the customer acquisition stuff, right, like helping them go acquire and win business right there is I just I dehumanize it by calling a customer acquisition. So there you go, I even went against my own, my own, my own recommendation, but you know we tend to lean towards those types of solutions, right. But you know.

26:04
If we can condense right time, time kills all deals and time heals all wounds, right, Isn't that kind of the the same but but we should leverage those. We should leverage the technologies that we have to condense those timelines right and understand and and those condensed timelines, those less back and forth, whatever you want to call it, right feed into the total experience which helps drives all three

of the things that we just talked about today, winning business, keeping them up to date on what's going on and then ultimately getting the comeback.

26:33
Right. Those those things come together. You have to look at the entire process, not just one aspect of it, right. And this is this is where partnerships like the one, you know between us and and total expert come into play, right, is that we start to synergize the the entire process not just one, not just one piece of it. So and a lot of people get fear that going back to the fear conversation before is that oh it's going to replace my job or I'm worried about no, no, no, no. This is here to enhance it, right. We want to get to the point where you can pick up the phone and make those connections and oh by the way.

27:03
Your turn times went from 40 days down to 1520 whatever the numbers are, right. Absolutely. Yeah. And when the market scales again, you don't have to hire a bunch of you know extra staff that you know you know is a short term thing. You can now have the ability to scale with the existing staff staffing levels that you have. I mean you got we have to flatten those curves out absolutely right. I mean you remember I mean back in the day I mean underage you're doing what ten 12/13/14 loans a day. Yeah I think right now we're.

27:33
Industry average still 2 1/2, something like that, 2 1/2 almost like maybe 3 ish? Type deal. It's just it's it's just one I think. I think there's a level of trust that needs to be there now to everyone's defense, more regulation, more requirements, all those things play into that, right. But also trust what you have and leverage what you have so that you can free up you know that that capacity, those things all come together kind of help you get those customers to come back and so on so.

28:01
I don't know, man. It's been fun. We could probably do this for, like, I don't know, probably another three hours, probably another three hours. But which? No one. No one would be listening besides just the two of us. But I appreciate you kind of taking the time, man. Yeah, man, Any time for you, buddy. Appreciate it, bud. Anytime and go. Are we supposed to have, like, a peacemaker?

28:21
We were. So, yeah, hopefully, hopefully that's playing in the background right now as we as we kind of close now. So I can be vigilante, you can be, you can be peacemaker. I'll take it. Appreciate it. Hey, guys, thank Dan. Dan Cantanella, Chief Lending Officer, Total expert, Eric Whaler, Vice President Product Marketing, Ice Mortgage Technology. We appreciate you guys taking the time. Thanks Dan. We'll see you at the next conference and we'll talk to you guys soon.