Build vs. Buy Tech Priorities For Retail, Wholesale, Direct Lenders

Open APIs and more nimble SaaS make it easier to build your whole tech stack custom, but is it wiser to buy core systems and focus on building differentiation? If so, what differentiation matters for retail, wholesale/broker, and consumer direct models? Come learn what primary and ancillary systems matter most to lenders in each of these channels, and how AI and new systems of record might change all of this tomorrow. 


Transcription:

Marc Hernandez (00:09):

If you're in the crowd, this is about Build versus Buy. This is tech priorities for multiple channels, retail, wholesale, direct lenders. So we're going to spend some time with some really amazing individuals here that I'll introduce in a second. But to give you a little perspective on more of what we'll be talking about today, prepared some remarks. So we're really going to be focused on ROI about building versus buying in your tech stack, right? So our target audience is of course mortgage lenders, and you have some up here, some amazing lenders up here. There is a tech super cycle that we're experiencing right now and a lot of that is led by AI and the industry as a whole, as your participants in this conference is starting to understand that we have to adopt these technologies. We have to adopt them with precision, we have to adopt them with compliance, and we have to understand what the tech really is to apply it.

(01:11):

And I think these three gentlemen are going to do a phenomenal job of educating you. So for the next few minutes, we'll go through a series of questions and really, so you can walk away with a good understanding of I'm in a position, should I buy, should I build? So let's get started with introductions. My name is Mark Hernandez. I'm a 22 year mortgage banking veteran. I have a lender and I'm both a lender and a vendor. And from the vendor side, it was a solution that I created for my own company and that's something that we're having fun with and building. So to my left, immediate left here we have Lucky Sandhu, Lucky is President and Chief Customer Experience officer at Reliance Financial. 22 years in the mortgage industry. He's led implementation of Reliance Financials, digital mortgage Tech stack, and has originated over a billion dollars in loans in the direct to consumer market. He's skilled in delivering that five star customer service experience and leveraging AI as well as advanced analytics to enhance customer satisfaction, give it up for Lucky.

(02:20):

And to his left, we have Matthew VanFossen, CMB. He is CEO of Absolute Home Mortgage Corporation. They are a mid-size independent mortgage banker located in Fairfield, New Jersey. And so Matt is very unique in this space. He is also the founder and CEO of Mortgage Automation Technologies, which is a FinTech provider specializing in point of sale technology. Matt's expertise lies in regulatory compliance, executive IMB management and anything encompass LOS/POS related. Give it up for Matthew. And the gentleman at the end of our panel here is Steven Majerus. Steve is CEO of Synergy One, a local company here. He's a block away and he led the management buyout of the company from Mutual of Omaha in April of 2020. He's been in the industry for an impressive 32 years. Steve has quite extensive experience in capital markets sales and operations. He's held senior leadership roles and various private and public mortgage companies. We're fortunate to have all three of them here. Please give it up for Steve.

(03:36):

Okay, before we get the conversation started, let's do a quick poll of the audience. So if you are a lender or have ever purchased any type of technology and you tend to lean towards build, just raise your hand. Okay. Informal poll. Alright. If you are a proponent of maybe buying the technology, give us a raise of hand, probably leaning a little bit towards buy. If you have no idea what you're doing in this session or hallucinating, raise both hands. Okay, we have one gentleman there. Alright, so we hope to maybe give you a little bit of better sense of how these gentlemen approach it at their respective companies. Let's start off Steve, let's start off with you here. Given the rapid revolution and evolution of all the technology in our industry here, how do you personally evaluate a solution of either building or buying a customized solution? And then what are the two part question? What are the key influences of factors that you look for in a tech partner?

Steven Majerus (04:47):

Great questions. I think my bias has been to buy and I think the first thing I think about is what use case am I trying to solve for? Because I like to think about technology that serves a specific purpose first and then how it can add overall either franchise or enterprise value over the long haul. And my position at the company, I've always led in our designing of our tech implementations and as an early adopter to a lot of technology in evaluating companies and partner solutions and things like that, because I'm an early adopter, I have an opportunity to help craft what the product actually looks like through customizations of off the shelf products. And again, as time goes by and companies get scale or get just larger at their level, it gets much more difficult to innovate with those companies because they have now their roadmap is much more extensive or broad.

(05:58):

And so I've used that to our advantage from a strategic standpoint about get in front of technology where I can be an early adopter, I can frankly cut a better deal financially and be their Guinea pig. And because of my background, I'm not afraid to go do that. And sometimes that's upsetting the apple cart in your own company. But I think anybody that comes to work at Synergy one knows that that's kind of our DNA. So that's kind of what you're signing up for from the very beginning. But I've just found that a buy solution, return on investment time horizon that we've been on has been a better one for us. Although I'm always wanting to build and hopefully that day will come.

Marc Hernandez (06:45):

But to highlight your point of being the early adopter, being there at the beginning allows you a lot more flexibility. So maybe in a way you are building, right? You're giving some great feedback to the solution. Have you ever found yourself in an instance where maybe your tech partner lost their way and it was not something that you thought you were in a certain trajectory, a certain path, and then maybe on their roadmap they decided to veer and it was no longer a good fit for you Ever experienced something like that?

Steven Majerus (07:16):

Absolutely. It's happened a fair amount and particularly when we bought the company in 20 and everybody had a good year and a half of craziness there and trying to retrench over the subsequent couple of years, that is a whole different skillset in managing your partnerships and when they're lost because they're not growing anymore and you're trying to save money as a company as well, I would want to innovate through that cycle and there was not a lot of interest on the partnership side to continue to do that because of their own constraints. If we had our own proprietary technology, we could lean into that and continue to innovate through that cycle. But when you're partner dependent, that is a challenge.

Marc Hernandez (08:02):

Yeah. Yeah, those are great insights. Matt, over to you. Same kind of first question, framing it, rapid evolution. Now remember everyone, Matt is both a lender and a vendor. And Matt, tell us the story of your evolution into your solution that you've built and your decisions to go to market with it and maybe how it's going.

Matthew VanFossen (08:29):

Yeah, thank you. So the way I looked at it was it depends if you're looking at build versus buy, it really depends on what solution you're looking at. I look at macro solutions and micro solutions, micro solutions, the smaller ones. These little vertical slices of processes are typically the ones that lenders will go and build in-house, we're looking for any folder document solution or a reporting solution. Sure, your tech teams in-house can usually handle that, but the macro solutions are the ones that you really have to be careful of and really think about, okay, what's the cost of building for mine? When I was presented with the options as the CEO of absolute home mortgage to build versus buy, when we were looking at a point of sale solution, I really sat down and looked at point of sale and I said, wow, who operates in point of sale?

(09:14):

Well, our borrower operates in point of sale, our real estate agent operates in point of sale and our check, alright, and our loan officer operates in point of sale. Well guess what? That's the lifeblood of my business as a lender. That's all of my customers. Those are my three customers. And if I go look and I'm going to go now spend several hundred thousand dollars a year to hand over that technology and that intellectual property over to a vendor that I sustainably have no control over, I'm taking on a considerable amount of risk. So I started looking at building a solution, but then we went to the problem that Steve was talking about is the cost to build a product like that. It's not cheap. You're talking about hundreds of thousands of dollars a year in development resources. You're talking about a multi-year roadmap utilizing your company and its resources as a test bed and you have to take that into consideration that it may not be cheaper to build versus buy or to buy versus build.

(10:15):

So what we looked at was, okay, well how do we actually do it? Where's there a middle ground? And we said, well what if we took it to market? I think that was the differentiating factor that we went to our peer groups and we found several other mortgage companies that are around our same size that had the same issue. And we said to each other, well what if we worked together? What if we worked together to build a solution that's good enough for all of us and we can all get the same end game? And that's kind of the foundation story behind a product that we call now the big point of sale. And we took it to market and it's been a great journey, but it's not for the weak of heart. My staff was really annoyed at certain points. The loan officers felt that we were using them as test beds behind technology and they didn't see the vision the way we saw it at the beginning.

(11:05):

Now that we're four years down that process, the product's in 35 different companies, other companies are innovating with us now everybody's seeing the benefit and now it's the best thing ever, right? But if you ask them two years ago, they wouldn't have been that happy with some of the resources or management. So I lean more towards the build side, but I would only build on one big solution other than small micro solutions because you can't fight a 10 front war. So if you are going to build one product to build and also take into consideration that you can get into a new market with it as well

Marc Hernandez (11:42):

And not just build by yourself, right? A partner, right? Others that have the same need for the solution.

Matthew VanFossen (11:48):

I compare it to car manufacturing. Elon I think said it's very easy to build a concept car. It's very easy to build one car, one model car. Building a manufacturing process of a car is a completely different process. That's the same thing with the product, building a product for your company because all mortgage companies do the same thing. But we all do it very differently. We all have our ways about our methodology. So building a product that is universal to be configurable for all lenders is a lot different animal than building a product. That's good just for your own self.

Marc Hernandez (12:23):

So we will come back to you Matt, because as the builder of a solution, maintenance is something. So gather some thoughts around amount maintenance, but first lucky. So kind of very similar to a question I asked Steve, is what are the key influences that you're looking for when evaluating a tech partner? What are the top priorities of when you are demoing solutions to your needs and share with the audience? The top couple that really need that you have to be spot on for you to say, this is going to be my tech partner.

Lucky Sandhu (12:58):

So let me just set the context. We are much smaller than both Synergy One and Absolute Home Mortgage. We have to very focused on exactly what customer problem we're trying to solve for. And as you shared, my title specifically says Chief Customer Experience Officer. So my focus as a company, the only way we grow is just provide fantastic experience to the customer on every single transaction because then that leads to word of mouth and that helps us with our marketing dollars and helps us get scale. So when I'm looking at my tech stack at a macro level, it's hard right off the bat. I'm not building it so I'm buying it out of the box. However, I know that there's one or two spots that I absolutely have to be best in class. I have to shine, that's my key differentiator and I have to knock it out of the park.

(13:53):

The rest I can just gain market parity. I'm perfectly fine. But that one area for us happens to be just the point of sale, the shopping experience and what I discovered through a lot of hardship that what I was trying to do, because we saw during the great recession and post great recession, there wasn't a whole lot of shopping experiences for the consumer that were on demand. There were frictionless and there were just right there for them to give them the information. First time home buyer or a homeowner to make that decision because they had all the financial information at the fingertips. So I went high and dry, I looked for software engineers who could help me. I looked at companies in the space tech vendors and nobody was willing to help me bring that transparency to the consumer. Fortunately for me, we found one vendor who was actually willing and able to support me in this cause. So if you go to our website, reliance financial.com, you'll get a customized rate quote in seconds. You don't have to put in your email address or your phone number. It's available to anyone on demand. That's the way I wanted to evolve the process for the home buyer or investor or homeowner to get that information to them on the fingertips anywhere, anytime. The question about how and what went into that vendor selection was obviously that I didn't have options but they were willing to play ball with me. But to their credit, hats off.

(15:26):

The key is that you have to have a very defined scope of work. You have to have a detailed of exactly what your vision is, what the roadmap is. Can they help you implement your vision? What is their innovation cycle look like for the next six, 12 months? Are they going to be able to stand with you through all the iterations and challenges and changes that you want to see because nobody else is doing it what you're trying to do and master. So a lot of discussion around also ongoing support, seeing what they have done for maybe a vendor or two, a lender to, excuse me, that's maybe trying to do the same thing as we are. How are they innovating and how are we different from them? Because again, when I go and sell my tech stack to either my team or the end consumer, it has to be wow.

(16:14):

And what I'm really thankful to the vendor that we've used, one of the things that I will say in buying, normally when you talk to the vendor reps, they'll tell you your implementation based on the stack you're trying to build or that one solution you're trying to tackle four to six months. It's more like six to nine months easy. So you got to be really prepared and you've got to have small team focused on helping them with what they're trying to do to help you achieve your focus. So a lot of hard work upfront if you can get all of that cleared up and one of the most important things cost, making sure that there's no additional cost as you start implementing because there's going to be a lot of pushback as to, Hey, you're pushing us. Our software dev developers are just getting pushed to the max. You're just one person. We've got hundreds of other customers. So you want to make sure that all the conversations have upfront. We did that and we were very excited to bring that solution to market.

Marc Hernandez (17:13):

That's fantastic. Lucky. Where in the life cycle was this solution provider of their company lifecycle?

Lucky Sandhu (17:20):

So I'll tell you that the vendor is B Smarty, and Tim has been in the industry since 20, I believe seven. Then he pivoted to starting B smarty I think 2011, 12 around that timeframe. And so they've been around for a while. What was awesome for us is that while a lot of lenders at scale have used them, no one had ventured to provide the consumer the transparency, a level of detail that a first time home buyer especially needs, whether it's their estimated closing costs, their monthly housing expense, including their rate options. So we give them seven rate options and also the amortization schedule to give them a full detail understanding of what it takes to get that cost of borrowing when they're making that purchase decision.

Marc Hernandez (18:12):

That's fantastic. It sounds like you found the right tech partner and have come up with a solution that's working for you.

Lucky Sandhu (18:17):

Took a lot of time and effort.

Marc Hernandez (18:19):

I'm sure. A quick pivot, Matt, I am going to come back to you about maintenance and scalability, but Steve, as an early adopter of New Tech, trying to be at the forefront of what's out there, lucky mentioned something that perhaps maybe that you have experienced, he said have a very sound SOW. How do you manage that scope of work with maybe a young vendor that you leverage to your benefit because they're early on in their journey, but that your vision maybe of an SOW isn't quite what they can fulfill. Not saying that has happened to you, but maybe thoughts of something like that.

Steven Majerus (18:56):

Yeah, I mean I think you just have to take the position that if you go into those discussions and you have your own vision that you want to play out and you've got the right partner that you're talking to or not, you identify how their product might fit with your vision. If it's 50% of the way there or 80% of the way or a perfect match, which never happens. But then if you can help craft in the discussion in a thoughtful and meaningful way and you can help them see your way to some customization, and we've been very successful and fortunate about doing that because we had a very specific thing in mind. So it wasn't an open-ended obtuse discussion. We came really prepared to lay it out for them so they get their head around it.

(19:47):

Then as you probably know, and anybody that is going down this buy direction is that if they can take your suggestions and build it into a customized solution for you and they also see it could be of value to other clients and work it into their product set, you are going to get the traction.

Marc Hernandez (20:09):

Yeah, they're going to work extra hard for that. Right,

Steven Majerus (20:10):

Exactly. Which is really key to help them seeing their way to a path to partner with you in what you're trying to achieve. And the other thing is too, we've had several instances where our original discussions or the use case that a partner would present to us, we ended up deploying it in a completely different way that they hadn't encountered yet or thought through to our advantage. So we were able to leverage a spend in a much more meaningful way across the organization.

Marc Hernandez (20:44):

Yeah, that's fantastic. Just emerging opportunities come from it.

Steven Majerus (20:47):

Yep. Because you always got to reimagine things, right? Things are always evolving.

Marc Hernandez (20:52):

Right. Insightful. Okay. Matt, back to you, the solution provider. You put it together with a few different companies, now you guys are, please share with the audience where your solution is in its life cycle and focus on scalability and maintenance. How do you tackling those challenges?

Matthew VanFossen (21:13):

So I think it's important to note that I didn't just start developing one day, right? We already had developers and resources before we started on the big point of sale project. We were doing development resources, we called it farm to table programming. We were taking loan officers and pairing them with developers. And back then I used to make a joke of the developers. I said, when I die, I really want you guys to lower my casket into the ground so you can let me down one more time. If you work with developers, you know what I'm talking about. But when we had the opportunity to lay the foundation and source code for the big point of sale, we took it in a different strategy and kind of goes to what Steve was talking about, about look at the mortgage industry. It changes so fast, it changes so rapidly and every day you have a new idea and every day you look at the system you say, man, if it could just do this.

(22:01):

And you get that vendor on the phone and you wind up hearing roadmap, roadmap, roadmap. So what we did that I think we to tackle that issue was when we laid the foundation, we designed it to be super configurable, like an erector set we used to play with as kids that every application question every document generation, every task, every rule. You don't need a developer and have to go back to the developers to do it because when you have to go back to a developer to do it, then you get that roadmap and that phantom loop that you have to constantly be following up. But if you build the source code and you build the foundation architecture that you allow your users to do self maintenance, can the average person with average skillset, no, I'm not going to take my processing manager and say, Hey, here's some HTML code and A-J-S-O-N body go have fun.

(22:53):

No, but can somebody that has encompass administration ability that knows how to write a business rule and our Excel formula do it? Yeah. Can you use some ai, some GPTs to go write some HTML code and plug it into the system? Absolutely. So I think that's the methodology. And we had the advantage when we laid that foundation code to learn off of 10 years of legacy technology of the obstacles that they faced. And we said, you know what? We're not going to build to where the industry has been. We're going to build to where the industry is going. And even today, we were talking about this earlier, the announcement came out today, I have such an interesting perspective. I get to see the vendor side of notifications and I get to see the lender side got a notification today from ICE mortgage technology. Hey, guess what?

(23:39):

Vendors ICE is sunsetting the SDK by October, 2025. Whoa. That's major news to IBs. That's major news to tech partners because we still probably have a 70% reliance on legacy SDK code inside of our environments. And as an IMB now I have to go and say, okay, in the next 12 months, which one of my vendors are going to meet this deadline? Which one of my systems have critical risk? And this is where I also have a benefit of saying, well, thank God I built some of my core architecture that wasn't reliant on the SDK because I started laying that code in 2020, not in 2014 when it was SDK reliant. So you see these notifications pop up, whether it's a regulatory change, whether it's a change in the adaptable market and can you pivot on the fly? I think that's really what we focused of having that architecture to be super configurable for the customers and also for ourselves.

Marc Hernandez (24:35):

Yeah, I think I saw a few people leave once you told them that that happened.

Matthew VanFossen (24:39):

Yeah. Sorry to drop the bad news, but yeah, it happened. It happened this morning.

Marc Hernandez (24:44):

You heard it here first. No, that's great. That's insightful, Matt. Lucky. Let's change the conversation now and talk about that vendor relationship. So your solution provider, you see you have a very great working relationship with them. What are some of the highlights and factors that are important in the maintenance of the relationship with them? Like perhaps share best practices. How often do you meet? When do you talk strategy? When do you talk solution? Kind of walk us through some of those behind the scenes conversations.

Lucky Sandhu (25:20):

Yeah, absolutely. So while we are constantly talking to them, because program guidelines are changing, rates are changing, we're constantly adding new investors and lenders to the platform. For example, we were mostly focused on conventional in the past. Now we are bringing in non QM loans into the play as that market has grown and opportunities have grown. So we are constantly adding programs and lenders into our aggregator. So it's important that we constantly have dialogue. But I will say this, we're not speaking to them enough because one of the things that I realized with any technology out of the box, there's a lot of features and functionality that doesn't get utilized. Why? Because our brain is in the production and growth and managing our teams and constant changes in the industry. So we're not spending enough time envisioning and thinking about how can we add more value.

(26:18):

So we need a dedicated resource who's constantly thinking about all the innovation, especially in the AI space where the vendor may or may not be actually investing in that. So you have to constantly think, is it the vendor? Is there somebody else who's coming to the space? So we have a dedicated resource within the team that's just thinking tech, innovation, growth, and how do we have those conversations? How do we bring more of that information into a stack to provide more value to the customer? We do realize that even though companies are talking ai, not a whole lot is actually happening within these systems of existing companies. So I realized that a lot of the AI is still in that marketing space, in that customer engagement space, but not necessarily in the existing engines, if you will, because a lot of it is, again, ROI related, are the investments worth where somebody's going to want to add additional money and pay that?

(27:22):

So we are trying to leverage more and more not just that vendor relationship, but through them. For example, I was having a conversation with a CEO Tim I talked about earlier, just a few days ago, just talking to him at the end of the call, I said, Tim, I'm not utilizing you enough because in that call he gave me the names of three or four vendors, which I should be thinking about adding into my entire stack. Who is actually doing things that could add more value to that customer experience? So in that conversation in itself, even though we are thinking we are deploying, we are constantly evolving with technology, I realized that if you are having more conversations with just your vendors and understanding from them what kind of kind of new technology or competitors are deploying, who are some of the players that can help you advance the agenda a little bit on that differentiator you're focusing on. One of the other differentiators we're focusing on is A CRM space. How do we engage with the customer better? Because we know the AI is already there. So as rates drop, how can we have customized rate alerts going in real time? Those conversations that you're having with your current vendors, see and ask them for better, bigger ideas that they may not be doing but other companies are helping so that you can

Steven Majerus (28:48):

Just to pick up on that point. And it is a challenge because I actually hope that vendor partnerships, we see some consolidation among them because I'll tell you in my chair, trying to manage these relationships and vendors and I would love to see some expand their features and benefits to more of an end-to-end solution versus trying to solve for this one little piece. And it adds marginal value, but somebody got it in their mind that this needs to be on the roadmap. And then to get loan officer adoption to make it mainstream in your own ecosystem is another challenge. And every little, every time you have to go back, it's almost like going back to a developer and starting over.

Lucky Sandhu (29:39):

Ongoing training is very, very critical. And having that support from the vendors are extremely important.

Matthew VanFossen (29:44):

I agree. We look at these little vertical slice solutions and each one of them comes to the contract. Each one of them comes with vendor management with due diligence, and that's labor intensive on IMBs as well. And it's interesting when we look, and this might not be a popular opinion, but I'll say when we look at the mortgage industry and we look at how we do tech in the mortgage industry, it's different than all the other SaaS solutions globally in the market.

(30:09):

You look at general SaaS in the market, Adobe, Microsoft office, you go to a website, you see a disclosed price, you hit download, you self implement, and 30 minutes later you have an Office 365 solution up and running. If you look at the mortgage industry, we have to go to a conference, meet a vendor, we do a demo, then we do a second demo, third demo, then we're in legal. We're signing a three year agreement. So if we want to have a better strategic relationship between vendors and ibs, you have to look at that trust that has to be built between the vendors and actually stop saying, you know what? We're not going to put Steve in the hot seat and say, you have to commit to me three years before you even use the product. And you actually then have to go say, what are your goals as a company?

(30:55):

What does your roadmap look like? And start getting our hands on the technology actually before we buy. And that's something that I think will be a greater good for the entire industry. And seeing what that will force will happen is vendor collaboration, like Steve saying that we'll actually be forced to form these alliances of what products work hand in hand with each other. And you'll start seeing those products that align better and it's easier to have a more unified tech stack and you'll actually be less reliant on some of the bigger companies that you have to go to that force these integrations together.

Steven Majerus (31:27):

And a lot of it today shows up in, we want to embrace data analytics, but you got to be able to move the data around so that it's useful. And if you don't have those collaborations between your vendors, your data just sits somewhere, it might as well be on an island and you're not able to leverage it, monetize it, and help the organization scale.

Matthew VanFossen (31:48):

Well, Steve, think about, we refer to acronym, SSOT, single Source of Truth architecture Byproduct really is married into ICE mortgage technologies database because we said, well, why have these databases floating out there? Why have a CRM database, LOS database, a POS database have all these consumer depositories of information? We should all be pointing to a singular source. So we're pointing to a singular reporting location. So this is the stuff that as independent mortgage bankers or even brokers, depending on the systems that you choose, really think about where your data is. So you can look at global reporting, how the systems are talking to each other. So you might need to make one big decision of a core product and then build off of that. And I think that's your LOS that you have to pair with. Yeah, yeah,

Marc Hernandez (32:31):

That's right. That's great discussion. We have maybe about six and a half minutes left and I think we'd be remiss if we didn't get your thoughts on ai. It's been the buzzword, we were talking about it when we were prepping for the panel. It's so many disciplines of ai, a lot of confusion in the market. We're past the FOMO stage of it here, but there's a lot of vendors here talking about ai. So let's go around and give us your quick thoughts. Okay. We're going to start with you specifically on where is the immediate application of AI technology. And so AI, very general immediate application today and in the future.

Lucky Sandhu (33:17):

I think the biggest opportunity is when you look at any home buyer, they don't necessarily care about whether the information that they need with the best loan product and or pricing a best deal for their particular situation. Where is that coming from? And what they do care is that it's available to them at the time and place when they're ready for it, whether it's a weekend or evening, early morning. So I think the biggest opportunity is in the way we engage, the personalized guidance piece, the step-by-step guidance, a lot of education that if you look at different MLOs, they can have differing kind of feedback as to how to approach that same exact issue that the home buyers dealing with. So I think AI has the power to enhance and augment that MLO experience for the customer by deploying AI to provide simple, clear, concise answers to their questions and helping them guide step-by-step towards that home buying decision.

(34:28):

Number two, I think AI has a tremendous opportunity to combine with the current CRM systems, product pricing engines, and even the Los S's one-stop solution in providing real time the product pricing, if you will, housing expenses, what I talked about earlier, and all the financial information they would need in bite-sized pieces at their fingertips. I think those two things can tremendously enhance the customer experience. And I think whether you're a home buyer and getting that information as you need, but then even as you become a homeowner, as we are seeing this opportunity in the next 18 months, 24 months as rates come down, and if I had the opportunity in the next six, nine months to refinance, how do I get a rate alert and saying, this is a customized rate quote for you to take advantage of a lower housing expense if you will, right off the bat. And here's the application online. So M have a tremendous advantage of taking this AI infusion. If vendors are able to bring that and some have already done that and bring it to the customer so that they don't have to do a lot of thinking. People are busy a lot of times they don't get the answers they're looking for, but I think AI has a great opportunity to make the whole process simpler, faster, and cheaper for the MLO and for the customer as well.

Marc Hernandez (35:52):

That's encouraging, I think because the promise that the technology offer us, Matt, in about 90 seconds AI today applications and AI in the future.

Matthew VanFossen (36:01):

So I'll be skeptic about it. My biggest concern is regulatory. My biggest concern is a bias program today. It's like if you watch Mark Mac Carle this morning, what's CFPB looking at these actions of these pre-programmed systems. It's not actually ai, it's logic engines that are programmed. So based on what's programmed into those algorithms, you have to be extremely careful. So I'm weary of utilizing AI for my company. Anything that's consumer facing or anything that is tying into consumer responses. I look at the greater problem of where AI can be leveraged and where it can actually be more helpful to my organization. And I look at MBA data and what's gone on inside my own company, something as simple as cost to manufacturer mortgages are higher than they've ever been. So we look at human capital as our highest cost and we say, okay, well how can we actually get more out of the same human capital?

(36:52):

How can we lower underwriting turn times? And if I am going to leverage AI in my business, that's where I'm going to be focusing on is guideline engines, interpretations, OCR technology and leveraging one piece of data to another piece of data. And I'm actually going to rely on buying in that regard. I'm not going to be building, I will be looking at our tech vendors and saying, who's working with us towards the holy grail of mortgages, which is the consumer applies. They upload their bank statements to the point of sale portal that goes into the LOS. The LOS is decompiling that bank statement decompiling that pay stub, cross-checking it against guidelines and giving a consumer friendly response to reiterate that to the customer. That's where I see that that's going to be the biggest lift as long as, again, it's not going to be consumer facing in the regard that a consumer's unknowingly talking to an AI bot. I think that we should all be wary of that and we should be weary of that as mortgage professionals. I don't want to see my loan originators get replaced. I think that people still want that human contact.

(37:54):

So I introduce automated services and human-based processes and I think they should be married together. I don't want an application hitting and an A SO and automated service order running a trier credit report and racking my credit bill up. But I do want to have a loan officer click one button rather than four to go run that service. So I'm going to be looking at the mixture of these, of how to get an underwriter of seven files a day rather than two and a half.

Marc Hernandez (38:19):

Thank you. Insightful. Steve, bring us home here. AI today versus AI in the future. Yeah,

Steven Majerus (38:26):

Very easy. Everything he said, everything he said, and what we are actually going to be rolling out soon is an enterprise AI that really focuses on faster answers, more accurate answers for the things that matter. Scenario desk HR on an enterprise wide system, things that are more in the black and white that people can get easier access to answers where human capital doesn't have to be involved. Start there and get the organization, the people used to using it as a go-to source and then develop further from there and get more and more in depth to the point Matt was talking about around the org. So I'm optimistic about it, but I'm going to start in a very specific way. Yeah,

Marc Hernandez (39:10):

That's great. I mean, adoption, we need it if we're going to use this technology. Well, that's all the time that we have folks. Thank you so much for joining our panel. Please give it up for these intelligent individuals.