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Speaker 1: M This is Mesters in Business with very Renaults on

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Speaker 1: Bluebird Radio. This weekend. On the podcast, I have an

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Speaker 1: extra special guests. Drop yourself in for this one. Matt

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Speaker 1: Ishbia runs United Wholesale Mortgage. Not only are they the

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Speaker 1: biggest wholesaler in the country, they're also the number two

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Speaker 1: overall mortgage lender. And he's got a fascinating history from

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Speaker 1: being a walk on at Michigan State as a point guard,

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Speaker 1: to eventually being an assistant coach there, to joining his

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Speaker 1: dad's twelve person firm that was doing mortgages UH, to

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Speaker 1: just enjoying explosive growth because they were doing the right thing.

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Speaker 1: They did not get suckered into all of the liar

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Speaker 1: loans and all of the ridiculous um no income check,

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Speaker 1: the ninja loans, no income, no credit rating, no job,

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Speaker 1: or all that craziness UH. United Wholesale didn't participate in.

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Speaker 1: And once the financial crisis ended, they just took over

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Speaker 1: and became literally the biggest UH mortgage wholesale or in

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Speaker 1: the country. He's a fascinating guy. He's done some really

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Speaker 1: interesting things. So enthusiastic about the business. When you see

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Speaker 1: a company that approaches things in the right way to

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Speaker 1: watch them go from a twelve person firm uh in

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Speaker 1: two thousand and four to anson firm today. It's it's

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Speaker 1: really quite fascinating. You will see what I mean by

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Speaker 1: his infectious enthusiasm and how much he is just so

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Speaker 1: into running the company, and and and how enamored he

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Speaker 1: is about the entire mortgage business. It's hard to listen

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Speaker 1: to this and not become enthusiastic. So so, with no

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Speaker 1: further ado, my conversation with United Wholesale Mortgages CEO Matt Shpia.

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Speaker 1: This is mesters in Business with very renaults on Bloomberg Radio.

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Speaker 1: My special guest this week is Matt Shpia. He is

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Speaker 1: the CEO of United Wholesale Mortgage, the largest wholesale lender

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Speaker 1: in the country in the number two overall mortgage lender.

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Speaker 1: The firm has nine thousand employees and recently went public

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Speaker 1: in the biggest back ever. He is also the author

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Speaker 1: of the book Running the Corporate Offense, Lessons in Effective

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Speaker 1: Leadership from the Bench to the Boardroom. Matt Shpia, Welcome

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Speaker 1: to Bloomberg Now, thanks for having me. Glad to be

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Speaker 1: here with you, so I got so much stuff to

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Speaker 1: talk to you. About But I have to start with

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Speaker 1: you were a walk on port point guard for the

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Speaker 1: team that won the national championship in college basketball. Tell

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Speaker 1: us a little bit about that. How did playing for

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Speaker 1: coach Tom Is prepare you for the business world? Yeah? No,

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Speaker 1: it was a great experience. You know, I wasn't that

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Speaker 1: great at a basketball player. I was very good in

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Speaker 1: high school. Obviously, became a walk on at Michigan State

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Speaker 1: for coaches. Oh, and you know, a great experience for

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Speaker 1: my first three years. We went to three final fours,

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Speaker 1: we won a national championship. I got in the game

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Speaker 1: when we were up by a lot. So I wasn't

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Speaker 1: a star player by any means. But I learned so

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Speaker 1: much about team, about work ethic, about camaraderie, about building

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Speaker 1: something special, about having big goals and working for him.

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Speaker 1: I learned so much during my time there. And some

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Speaker 1: people asked me what translates the business? I say, I

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Speaker 1: can talk for eight hours about that, because everything translates

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Speaker 1: the business, um, if you're paying attention and listening and learning.

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Speaker 1: And so I had a great experience playing there, um

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Speaker 1: and once again winning the national championship, but just making

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Speaker 1: lifelong friends and and and learning from tom Izzo for

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Speaker 1: many of those years. And you know, when you talk

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Speaker 1: about you could speak for eight hours about this. I

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Speaker 1: found the book fast, easy read um, and there's it's

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Speaker 1: really all about how the concept of competitive sports very

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Speaker 1: much translates into lessons um for the corporate world. So

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Speaker 1: so let's make that shift to the corporate world. You

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Speaker 1: joined the mortgage industry in four when your father offers

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Speaker 1: you a job at United Wholesale Mortgage. Back then the

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Speaker 1: company was twelve people. To tell us a little bit

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Speaker 1: about your first entry level job in the mortgage industry

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Speaker 1: and and memories from that period of two thousand three,

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Speaker 1: two thousand four. Yeah, it was a great, great thing.

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Speaker 1: You know, I was coaching. I played basketball for four

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Speaker 1: years and I got a chance to coach for years.

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Speaker 1: So I got to be on the bench, sitting there

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Speaker 1: with tom Izo, learning from him in meetings. And I

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Speaker 1: got offered a college basketball job to be one of

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Speaker 1: the youngest assistants. Are the youngest assistant in college basketball

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Speaker 1: Division one at the time. I turned it down because

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Speaker 1: my father said, hey, maybe you can you know, and

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Speaker 1: Aso said to me, actually, maybe you can take some

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Speaker 1: of things you learn in basketball and turn it tip

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Speaker 1: the business, maybe do something bigger than me and head coach,

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Speaker 1: And my dad said, I got a little mortgage coming.

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Speaker 1: Might as a lawyer. He's never actually worked here at

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Speaker 1: the mortgage. I mean, he's just like an entrepreneur. He

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Speaker 1: has like seven or eight different businesses. This was a

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Speaker 1: twelve person mortgage coming in two thousand three. I joined

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Speaker 1: as a twelve person and it's been a great experience

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Speaker 1: all the way through. What I started at though was

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Speaker 1: the bottom job everything. But I I used to say

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Speaker 1: that every job here. But I've got nine thousand three people,

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Speaker 1: so I can't do every job now. But I back then,

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Speaker 1: I took facts off the fax machine. I learned underwriting,

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Speaker 1: I learned closing. I learned everything from the bottom up

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Speaker 1: and really to understand not only our clients but the

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Speaker 1: consumers consumers clients and our team members and process and

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Speaker 1: so it's been it was really just great going all

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Speaker 1: three through that process. I had no desire, no idea,

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Speaker 1: no ambition of saying, hey, let's build this to a

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Speaker 1: nine thousand plus company. The number I mean, we're just

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Speaker 1: trying to make it, trying to survive at that point,

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Speaker 1: and uh, and that's what we're doing. And but you know,

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Speaker 1: learning the business from the ground up was there a

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Speaker 1: huge advantage and I still implement that with new people

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Speaker 1: at our companies to this day. M So, so let's

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Speaker 1: talk a little bit about survival. Um, how did the

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Speaker 1: firm weather the housing bust in the mid two thousand's

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Speaker 1: Not long after you, uh, you joined, we saw the

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Speaker 1: real estate market collapse. Yeah, so it was it was

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Speaker 1: definitely an interesting time to have joined. Um. What I

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Speaker 1: would speak about that is this, you know, back then

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Speaker 1: we were so small and we didn't really know what

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Speaker 1: we're doing. We're trying to figure out things. But we

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Speaker 1: didn't do a lot of those loans, subprime loans. So

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Speaker 1: the whole point was back then, we were just trying

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Speaker 1: to make it, you know. I remember that I was

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Speaker 1: a sales rep in two thousands, six or five for

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Speaker 1: and I remember calling my father one time and saying, Hey, Dad,

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Speaker 1: you know, we're doing fifty loans a month in relationship.

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Speaker 1: We're gonna do sixty five thousand closing this month. So

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Speaker 1: it's it's a whole different world, right during fifty loans

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Speaker 1: a month back then, I remember telling my dad and go, Dad,

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Speaker 1: you know, if we did these types of loans. With

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Speaker 1: your subprime, we can get a lot more business. I

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Speaker 1: remember my dad saying to me, Matt, you know, we're

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Speaker 1: not in here just to make money. We're not gonna

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Speaker 1: lend someone money if they can't pay it back. So

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Speaker 1: letting someone two dollars in the house is worth one,

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Speaker 1: We're just not gonna do it. Now. We did make

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Speaker 1: a big stand because they just went somewhere else and

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Speaker 1: got the loan done, but we never did the sub

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Speaker 1: prime loans. And so when those sub prime loans all

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Speaker 1: started crashing in oh seven, o eight, oh nine, you know,

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Speaker 1: we were, you know, taking a thing of the old

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Speaker 1: movie Forrest Gump. We're like Bubba Gump. Shrimp were like

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Speaker 1: one shrimp boat left standing. Like we were just doing

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Speaker 1: the right type of loans, focused on fh A and conventional,

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Speaker 1: and we really grew because everyone else was worried about

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Speaker 1: the problems that they had all these loans and we

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Speaker 1: had never done those, and so I look at it,

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Speaker 1: we didn't really struggle. That actually was the catapult to

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Speaker 1: our success by doing the right thing and the do

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Speaker 1: right mentality. It didn't work real right, No four or

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Speaker 1: five or six, when everone has record years in mortgage

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Speaker 1: and we were not having those years because we weren't

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Speaker 1: doing those types of loans. But we we we it

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Speaker 1: came back our way in O eight oh nine and

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Speaker 1: and ever since doing the right type of loans for

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Speaker 1: the right borrowers. So post financial crisis, the firm begins

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Speaker 1: to expand and thrive. When did you take over as CEO?

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Speaker 1: So I was running the company probably starting in about

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Speaker 1: eight oh nine. Officially you know CEO maybe two thousand

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Speaker 1: twelve or thirty seen, but those years, you know, running

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Speaker 1: the business, trying to build the company to the point

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Speaker 1: where we went to in the final thing where we

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Speaker 1: had a small retail division. And when I became the

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Speaker 1: CEO in two uh early two, I think, uh, the

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Speaker 1: key was I made a couple of decisions at that point,

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Speaker 1: which was we're not doing retail. Retail is when you know,

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Speaker 1: is not as good for consumers, it's not as good

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Speaker 1: for loan officers. So I actually cut a department and

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Speaker 1: I moved them all to our wholesale channel and basically

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Speaker 1: reran the wholesale business. Now we didn't let anyone go,

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Speaker 1: We just moved them to reallocate them to the new teams,

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Speaker 1: and we really started exploding from men. So let's fast

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Speaker 1: forward a little bit till last year. Last spring of

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Speaker 1: the global economy is shutting down and the Federal Reserve

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Speaker 1: comes out. Not only do they cut rates to near zero,

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Speaker 1: they commit to purchasing unlimited quote unquote unlimited amounts of

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Speaker 1: mortgage securities towards the end of March, and naturally, mortgage

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Speaker 1: bond prices skyrocket. You guys, like a lot of other wholesales,

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Speaker 1: you would hedge interest rate risk, and suddenly with these

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Speaker 1: skyrocketing rates, you're facing margin calls and a cash crunch.

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Speaker 1: Tell us about that early pandemic period and how the

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Speaker 1: Fed impacted what you were trying to do in terms

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Speaker 1: of your balance sheet. Yeah, obviously, you know they're talking

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Speaker 1: about COVID and and what happened we were with the

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Speaker 1: Fed and everything. First off, there's no playbook for COVID,

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Speaker 1: you know, no one had it like in the books,

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Speaker 1: like what do you do with COVID comes in? How

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Speaker 1: do you handle it? With the Fed? You know, it's

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Speaker 1: unprecedented times, unheard of crazy things happened. But when that

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Speaker 1: stuff happened, you know, really we saw for it is

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Speaker 1: we work as a team, you know, it's all. It

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Speaker 1: goes back to the core of teamwork, working together, figuring

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Speaker 1: out how do we solve for different issues, And a

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Speaker 1: lot of those things were short term concerns, but the

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Speaker 1: whole economy shot now. You know, I'm real big on

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Speaker 1: our culture and our team, and we have nine thousand

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Speaker 1: three people here and we all work here every day

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Speaker 1: in the same location. We have about one point five

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Speaker 1: million square feet and we're all working in the building together.

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Speaker 1: Spending everybody home was a big challenge because I never

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Speaker 1: planned for work from home because that's not what we

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Speaker 1: believe in here. And at the same time, the you know,

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Speaker 1: people worry about their health, which is a scary thing.

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Speaker 1: You didn't know what was going on. There's a lot

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Speaker 1: of scary things going on, the FED doing what the

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Speaker 1: FED did. A lot of crazy things happened, but we

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Speaker 1: came out of it stronger and we figured out, Okay,

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Speaker 1: how do we band together and figure out what to

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Speaker 1: how to handle the balance she concerns the the FED

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Speaker 1: with rates lowering, operational concerns, then people work from home,

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Speaker 1: technology concerns, and not only we managed through, we thrived,

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Speaker 1: and that was a big part of our story and success.

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Speaker 1: You know, is Hey, everyone can do things when things

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Speaker 1: are going well. What happens when things you kind of

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Speaker 1: get sucker punched a little with COVID and how do

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Speaker 1: you survive and thrive? And that's what we did and

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Speaker 1: we had I'm having our best year of all time,

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Speaker 1: not only from a volume perspective, but um but a

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Speaker 1: margin perspective and a profit perspective. And at the same time,

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Speaker 1: one of the things is key to our business is

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Speaker 1: culture and team and family. And when the pandemic hit,

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Speaker 1: no one knew what was gonna happen. I didn't know,

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Speaker 1: you didn't know. Nobody knew what was going on. And

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Speaker 1: I told our whole team at that point, and he said, listen, guys,

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Speaker 1: we will not lay off one person. Not one person

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Speaker 1: will be laid off at our company. I've got your back,

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Speaker 1: You've got my back. Don't worry about your job. We'll

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Speaker 1: make it through this stronger. And obviously it turned up

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Speaker 1: to be a record here. But the point was we

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Speaker 1: showed family first. I said, you can't lay your brother off,

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Speaker 1: so we don't lay each other off with family, and

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Speaker 1: I think that resonated with our team members at the

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Speaker 1: point where they said at us and he's all in

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Speaker 1: with me. I'm all in with him. Let's go DOMI.

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Speaker 1: And that helped catapult us to a record deal last year.

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Speaker 1: And and we're planning on doing more business this year. Huh.

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Speaker 1: That's quite that's quite fascinating, especially considering how much real

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Speaker 1: estate transactions plummeted at least in the first half of

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Speaker 1: the year, came back in the second half of the year.

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Speaker 1: But I want to stay with your balance sheet. So

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Speaker 1: you're you're looking at a little bit of a cash crunch,

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Speaker 1: and you reach out to the bankers at Goldman Sachs

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Speaker 1: and say, hey, I wanna shore up our capital reserves

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Speaker 1: because we think there's opportunities coming. Tell us a little

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Speaker 1: bit about that process and and what the final resolution was. Yeah,

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Speaker 1: so when when up? And then you see that you know,

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Speaker 1: cash is king in any business, and so you have

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Speaker 1: a couple hundred million dollars to run your business. You say, guys,

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Speaker 1: we we we were competing like we're the number two

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Speaker 1: overall landing. The people were competing with our you know,

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Speaker 1: Rocket Mortgage, Wells, Fargo, Chase in Bank of America, that's

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Speaker 1: the top five. These are not little companies. I'm competing

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Speaker 1: with and we said, gosh, what do the bandage they have.

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Speaker 1: They have access to liquidity and capital that I just

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Speaker 1: don't have. You know, this is I own, you know,

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Speaker 1: me and my brother and dad own some percent, but

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Speaker 1: there was no private equity, We had no investors in

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Speaker 1: with us. It was just, you know, we built this

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Speaker 1: thing from scratch. And so we said, how do we

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Speaker 1: make sure that we have the balance sheet and capital

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Speaker 1: to compete with the biggest companies because we think we

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Speaker 1: have the best platform and the best technology, but I

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Speaker 1: have to have the cash and liquidity sources to do so.

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Speaker 1: And so I met with some people and we end

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Speaker 1: up going through the process of going through US back

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Speaker 1: and becoming a public company, which basically made it so

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Speaker 1: that we have access to the same liquidity we can

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Speaker 1: monetize some of the things we've done. But it wasn't

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Speaker 1: about getting money out for me or for our company,

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Speaker 1: because I still own a after the whole thing, I

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Speaker 1: still own ninety four out of the company. The whole

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Speaker 1: point was putting us on a platform that I have

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Speaker 1: access to these bankers, access to the liquidity, access to

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Speaker 1: being on a level plainfield. Put me on a level

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Speaker 1: plain field, and let's compete head to head and we'll

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Speaker 1: see what happens. And that's what we're doing right now. Yeah,

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Speaker 1: I see that that competitive basketball nature is very much

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Speaker 1: in evidence with you. And to put put some flesh

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Speaker 1: on the bone. So not only was this the biggest

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Speaker 1: spack ever, you guys floated like four or five of

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Speaker 1: the company, meaning you still own the vast majority of it. Uh,

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Speaker 1: and so on paper, you're you've suddenly become one of

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Speaker 1: the wealthiest people in the country. That has to be

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Speaker 1: kind of a shocking thing to to realize, Hey, we

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Speaker 1: were nervous and wanted to shore up our balance sheet

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Speaker 1: and then this happens. Tell us a little bit about

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Speaker 1: what that experience was like. Yeah, you know, that was

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Speaker 1: obviously something that was new to me. You know, it's

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Speaker 1: not like our company. You know, our company evaluation of

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Speaker 1: sixteen point one billion when Win public and and me,

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Speaker 1: you know, that wasn't the company the valuation or didn't

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Speaker 1: grow when we went public. We that's what we've been

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Speaker 1: the whole time. But the going public put it out

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Speaker 1: there in front of everybody right that the company is

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Speaker 1: worth this, and that Matt you might be worth this,

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Speaker 1: and you know, I don't pay attention to those numbers.

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Speaker 1: The real reality is I focused on how do I

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Speaker 1: dominate my day to day, how do I help our

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Speaker 1: company grow and win today? Money follows success, It's not

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Speaker 1: the other way around. So I very rarely look at

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Speaker 1: any money I have or money are profit are moments

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Speaker 1: like are you focused on the profits? I said, I'm

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Speaker 1: focused on winning. I'm focusing on dominating our competition. I'm

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Speaker 1: focused on taking care of my team members and my clients.

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Speaker 1: And when you do those things, you make a lot

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Speaker 1: of money. Success is the is the focus. Money follows,

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Speaker 1: and so the fact that I'm worth X dollars or

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Speaker 1: whatever it may be, then it put out there. It's

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Speaker 1: it's cool to see, you know, on paper for a second,

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Speaker 1: then you go right back to the grind and say,

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Speaker 1: you know, I'm not spending that money in my life

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Speaker 1: has not changed one inch since we weren't going in public.

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Speaker 1: I'm still here at four in the morning, I'm still

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Speaker 1: grind neal sixth night. I still love what I do.

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Speaker 1: Nothing's changed, and so therefore to me it's not a

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Speaker 1: big deal. But at the same time, I know it

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Speaker 1: gets a lot of headlines and people talk about I

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Speaker 1: get more people talking to me about that stuff than

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Speaker 1: they used to obviously, Um, that's been a little change

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Speaker 1: in my life. Let's talk a little bit about your

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Speaker 1: business model and how different that is from some of

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Speaker 1: the other lenders people might be more familiar with, in

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Speaker 1: the sense that you don't work directly with consumers. You're

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Speaker 1: a wholesale uh mortgage on the writer. Tell us a

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Speaker 1: little bit about that model and what some of the

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Speaker 1: challenges are associated with that. Yeah, so we don't have

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Speaker 1: a name brand recognition is the number one lender or

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Speaker 1: even the number three or four or five, but we're

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Speaker 1: number two overall lender. And this is how we think

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Speaker 1: about it is our business is the exact same as

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Speaker 1: everyone else's. The difference is were wholeshale, which means we

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Speaker 1: offer lower rates and you have to get our rates

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Speaker 1: through an independent mortgage broker. Mortgage brokers offer lower rates

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Speaker 1: and fees to consumers. It's it's not my opinion, it's fact.

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Speaker 1: It's backed up by data after data data point that

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Speaker 1: if you go alone to you know, mortgage broker at

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Speaker 1: finding mortgage broker dot com or wherever you may go

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Speaker 1: to find a local mortgage broker, you will get lower

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Speaker 1: rates and So what we've done is we provided and

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Speaker 1: that's always been the case, so you know, very the

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Speaker 1: difference is it's always been the case you get lower rates.

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Speaker 1: But what's changed is we've we've enabled them with technology.

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Speaker 1: So what we've done with our mortgage brokers, there's fifty

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Speaker 1: loan officers about the country. You have to get a

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Speaker 1: loan through a loan officer. They're either captive to one

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Speaker 1: lender or they're independent. We work with the independence to say, hey,

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Speaker 1: use our rates, use our technology, and we'll make us

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Speaker 1: so you can compete with the biggest lenders in the world.

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Speaker 1: And that's what we've done, and that's why our business

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Speaker 1: has exploded, is that we've basically democratized technology. We've enabled

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Speaker 1: the mortgage brokers to succeed and thrive by giving them,

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Speaker 1: of course the lowers lowest rates, but beyond the lowest rates,

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Speaker 1: it's the best technology and fastest process that closes. Because

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Speaker 1: you know, I'm in an interesting industry. Nobody wants my product.

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Speaker 1: Nobody wants the mortgage. They want to buy the house,

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Speaker 1: they have to get a mortgage to do it. They

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Speaker 1: want to save the money, they gotta get a mortgage.

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Speaker 1: We're selling a product nobody wants. We've gotta make it faster, easier, cheaper,

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Speaker 1: and that's what we've done with mortgage brokers. Really quite interesting.

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Speaker 1: So I'm a little curious, what are the advantages of

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Speaker 1: being a non bank lenser versus a banking lens. You're

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Speaker 1: like Wells and Cities it the ability to work with

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Speaker 1: independent um mortgage brokers. What what advantages does your structure

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Speaker 1: give you? Yeah, well, being a non bank lender. A

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Speaker 1: lot of people think, oh, that means you have less compliance,

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Speaker 1: less regulatory. I argue the reverse. I have more compliance,

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Speaker 1: more regulatory. I mean, I gotta do with fifty individual states.

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Speaker 1: When you're a federally charter bank, you gotta deal with one, right,

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Speaker 1: you don't have to deal with each state level stuff.

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Speaker 1: We have more compliance and more regulatory things that I

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Speaker 1: think in a lot of respects the big advantage and

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Speaker 1: one of the things that I think about building wealth

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Speaker 1: and building success is the reason I can beat those companies,

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Speaker 1: and reason we have beat those companies is extreme focus.

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Speaker 1: I'm not trying to be the best bank. I'm not

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Speaker 1: trying to be the best everything. I'm trying to be

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Speaker 1: the best mortgage lender. All we do is dominate the

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Speaker 1: mortgage process where a big companies, smart companies, Chase well

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Speaker 1: as probably these are great companies obviously, but they gotta

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Speaker 1: do the posits. They gotta do credit cards, they gotta

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Speaker 1: do boat loans, they gotta do they have to do

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Speaker 1: a bunch of things, and therefore they're not extremely focused.

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Speaker 1: I'm extremely focused. I got nine thousand three people that

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Speaker 1: focus on being the best wholesale mortgage one in the country,

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Speaker 1: and we have no question on what we're trying to

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Speaker 1: do every day. And so I think singular focus is

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Speaker 1: a huge advantage. And if I was a bank, that's

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Speaker 1: one thing that I probably wouldn't be able to do

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Speaker 1: because they want you to diversify in different respects. But

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Speaker 1: the thing is a mortgage. It's not like this little

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Speaker 1: thing you're doing. This is a huge part of someone's

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Speaker 1: life and dominating on it. It's like it's like the

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Speaker 1: way I would explain is like the Wells, Fargos and Chases.

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Speaker 1: In these big companies, they have to be, you know,

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Speaker 1: a general doctor, like you're you're general practitioner right there.

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Speaker 1: You're not, but I'm the I'm the heart surgeon. When

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Speaker 1: you when you get a hearty you don't go to

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Speaker 1: your main doctor. You actually want to go to your

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Speaker 1: heart the best heart person in the country. And that's

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Speaker 1: what a mortgage is. You only do it once every

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Speaker 1: three or four years. Do you want to get the

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Speaker 1: best in the country, And that's what mortgage brokers are

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Speaker 1: and that's what you WM does. So so let's hold

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Speaker 1: aside the big banks like City and Wells and JP Morgan.

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Speaker 1: What what's your advantage when you're competing with firms like

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Speaker 1: Rocket Mortgage or a Quicken. How do you go head

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Speaker 1: to head with the folks who are similarly like you

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Speaker 1: really focused on just underwriting mortgages. I just got work them.

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Speaker 1: It's very simple. So I'll work them and I invest

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Speaker 1: in technology, and so I love that. I love that

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Speaker 1: they have a similar set up as us because we

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Speaker 1: can compete head to head and we find out who's better.

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Speaker 1: And we believe in our model. We believe in doing

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Speaker 1: right by brokers and consumers, and we have a different

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Speaker 1: model mentality than some of those other companies. Other other

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Speaker 1: companies are focused on for on profit profit profit. We're

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Speaker 1: focused on winning, winning, winning, and profit follows and that's

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Speaker 1: worked year over year as we've continued to grow. You know,

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Speaker 1: when I took over in two thousand thirteen, I think

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Speaker 1: we did it, you know, or two dozen two took over,

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Speaker 1: we did about ten billion. We did a hundred eighty

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Speaker 1: billion dollars of mortgages this past year, and we're gonna

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Speaker 1: do more in two thousand one, and everyone else is

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Speaker 1: not going to Everyone can do well in rache Al

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Speaker 1: really low. Some of those competitors you talked about, they're

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Speaker 1: extremely focused on refinance. Once again, that's great when rates

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Speaker 1: are two percent two and a half percent, it's not

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Speaker 1: gonna be as great one rates or four and a

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Speaker 1: half percent. So our business model is much more balanced,

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Speaker 1: much more focused on consumers and brokers. And at the

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Speaker 1: same time, I think it's much more long standing, and

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Speaker 1: you'll see that as we take over the number one

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Speaker 1: spot in the coming years. So I have a ton

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Speaker 1: of interest rate questions for you. We'll we'll circle back

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Speaker 1: to that in a little bit. Um. I want to

429
00:20:09,880 --> 00:20:13,000
Speaker 1: ask about the speed of transactions. You guys seem to

430
00:20:13,600 --> 00:20:18,960
Speaker 1: have a reputation for turning things around very very quickly.

431
00:20:19,080 --> 00:20:21,959
Speaker 1: Tell us a little bit about how you were built

432
00:20:22,280 --> 00:20:27,560
Speaker 1: for speed. Yeah, well, once again, mortgages, nobody wants so

433
00:20:27,560 --> 00:20:30,280
Speaker 1: you gotta make it faster, easier and cheaper and so cheaper.

434
00:20:30,440 --> 00:20:32,440
Speaker 1: We already are that that data and you can prove

435
00:20:32,480 --> 00:20:35,320
Speaker 1: that faster. Same thing. I you know, a couple of

436
00:20:35,320 --> 00:20:37,720
Speaker 1: our competitors, obviously one of them that you talked about earlier, Rocket,

437
00:20:37,800 --> 00:20:40,200
Speaker 1: they went in public and they touted their technology and

438
00:20:40,200 --> 00:20:41,879
Speaker 1: they've done a very nice job. Dan Gilbert's done a

439
00:20:41,920 --> 00:20:44,520
Speaker 1: good job at their business and built something very successful.

440
00:20:44,720 --> 00:20:46,720
Speaker 1: But you know they talked about technology. How do you

441
00:20:46,760 --> 00:20:48,479
Speaker 1: know you have the best technology, Like, what's the measurement?

442
00:20:48,520 --> 00:20:51,320
Speaker 1: It's either your cost to originate your expenses that you

443
00:20:51,320 --> 00:20:53,080
Speaker 1: can you can make things more efficient, or you close

444
00:20:53,119 --> 00:20:56,359
Speaker 1: loans fast. Right, Well, the industry closed loans about forty

445
00:20:56,400 --> 00:20:59,560
Speaker 1: seven days. Rocket did a great job. They're closing loans

446
00:20:59,560 --> 00:21:01,840
Speaker 1: in twenty n days. They're better than most. We close

447
00:21:02,080 --> 00:21:05,480
Speaker 1: in sixteen seventeen days. Here, our technology has differentiated because

448
00:21:05,480 --> 00:21:09,719
Speaker 1: we've built our technology from scratch. I got actually made

449
00:21:09,720 --> 00:21:14,000
Speaker 1: a little technology. People here at our company every single

450
00:21:14,080 --> 00:21:17,840
Speaker 1: day grinding, working hard to make prietary technology for our clients.

451
00:21:17,880 --> 00:21:21,199
Speaker 1: And so speed solves everything. You make things fast, Like

452
00:21:21,240 --> 00:21:23,000
Speaker 1: if we make a mistake, we solve it fast. Right,

453
00:21:23,000 --> 00:21:25,159
Speaker 1: We're trying to figure out things, and so we're always

454
00:21:25,200 --> 00:21:28,119
Speaker 1: focused on speed. Nobody wants the mortgage process that you're like,

455
00:21:28,200 --> 00:21:29,920
Speaker 1: what are you gonna call the underway to find out

456
00:21:29,920 --> 00:21:32,600
Speaker 1: thirty days later what's going on. It makes the process

457
00:21:32,720 --> 00:21:35,560
Speaker 1: grueling and not fun when someone's trying to buy a house.

458
00:21:36,000 --> 00:21:38,199
Speaker 1: And so speed is a big deal. It's tied to

459
00:21:38,240 --> 00:21:41,840
Speaker 1: our technology, and that's how we've differentiated. Uh. The house

460
00:21:41,880 --> 00:21:45,040
Speaker 1: I'm calling you from now because we're still working from home.

461
00:21:45,640 --> 00:21:50,560
Speaker 1: We purchased in September, and I cannot begin to tell you.

462
00:21:50,600 --> 00:21:54,480
Speaker 1: I'm just laughing as you're describing it. What an ordeal

463
00:21:54,800 --> 00:21:58,800
Speaker 1: it was to get a mortgage for this house. And

464
00:21:59,160 --> 00:22:02,919
Speaker 1: I'm good, have Craig credit score. I'm putting a stupid

465
00:22:02,920 --> 00:22:05,960
Speaker 1: amount of money down. This should have been a no brainer,

466
00:22:06,160 --> 00:22:09,280
Speaker 1: and I guess it was because everybody I was dealing

467
00:22:09,280 --> 00:22:13,960
Speaker 1: with apparently had no brain. It was Do you hear

468
00:22:14,000 --> 00:22:17,040
Speaker 1: those sort of complaints to people tell you like horrible,

469
00:22:17,080 --> 00:22:18,879
Speaker 1: So let me tell you about what a disaster in

470
00:22:18,960 --> 00:22:22,719
Speaker 1: my mortgage was when they meet you personally. All the

471
00:22:22,760 --> 00:22:25,680
Speaker 1: time people people have mortgage stories, and especially when talking

472
00:22:25,680 --> 00:22:27,600
Speaker 1: about two four and fifteen. But the reality is this,

473
00:22:28,560 --> 00:22:31,120
Speaker 1: people don't know how to get a mortgage. They don't

474
00:22:31,160 --> 00:22:33,359
Speaker 1: know where to go. They think that you see a

475
00:22:33,359 --> 00:22:35,240
Speaker 1: commercial and you go there, you call your bank, you

476
00:22:35,280 --> 00:22:38,200
Speaker 1: go there. That that that's the biggest problem. So consumer

477
00:22:38,280 --> 00:22:39,600
Speaker 1: education is a big focus of mine. One of the

478
00:22:39,600 --> 00:22:42,040
Speaker 1: reasons we went public was to help educate consumers and

479
00:22:42,080 --> 00:22:44,240
Speaker 1: get myself out on a platform. Because if you go

480
00:22:44,320 --> 00:22:47,080
Speaker 1: to find a mortgage broker dot com or you call brokers,

481
00:22:47,600 --> 00:22:49,280
Speaker 1: you do one of those things, you will find a

482
00:22:49,320 --> 00:22:51,840
Speaker 1: broker in your community. They will shop on your behalf.

483
00:22:51,920 --> 00:22:55,359
Speaker 1: It will be a fast, efficient, cheap process. Period. I

484
00:22:55,400 --> 00:22:58,199
Speaker 1: have the utmost confidence in that because I see it

485
00:22:58,200 --> 00:23:01,320
Speaker 1: every single day. But most consumers, they get lured into

486
00:23:01,359 --> 00:23:03,760
Speaker 1: some TV ad or they hear something like they don't

487
00:23:03,840 --> 00:23:06,400
Speaker 1: really know how to do it. And so part that's

488
00:23:06,400 --> 00:23:08,399
Speaker 1: part of my mission right now is how do we

489
00:23:08,440 --> 00:23:10,000
Speaker 1: get more people to understand how to get it broke.

490
00:23:10,000 --> 00:23:11,399
Speaker 1: Even if it doesn't come to u w M. Go

491
00:23:11,480 --> 00:23:13,159
Speaker 1: to find a mortgage broker dot com doesn't mean he's

492
00:23:13,160 --> 00:23:14,399
Speaker 1: gonna come to u w M. It goes to one

493
00:23:14,400 --> 00:23:16,399
Speaker 1: of the other. But if you go there, then that

494
00:23:16,400 --> 00:23:19,760
Speaker 1: that that that professional can say, Okay, Barry, what are

495
00:23:19,800 --> 00:23:21,480
Speaker 1: you looking for? I'm looking to close in thirty days

496
00:23:21,480 --> 00:23:23,639
Speaker 1: at a great rate. Okay, well here's the lender I'm

497
00:23:23,640 --> 00:23:26,480
Speaker 1: gonna go with then, rather than well, here's what we offer.

498
00:23:26,520 --> 00:23:28,560
Speaker 1: It's gonna take sixty days, and we're gonna be like

499
00:23:28,920 --> 00:23:31,480
Speaker 1: certain lenders are paying on certain things. Certain lenders are

500
00:23:31,520 --> 00:23:34,320
Speaker 1: fast for certain things. Certain lenders cost more. They know

501
00:23:34,440 --> 00:23:36,119
Speaker 1: these things. You have to go to the expert. You

502
00:23:36,200 --> 00:23:39,920
Speaker 1: gotta go. It's like going to your general doctor and saying,

503
00:23:39,920 --> 00:23:42,080
Speaker 1: who's the best heart surgeon. He'll refer you to the

504
00:23:42,119 --> 00:23:44,160
Speaker 1: right place rather than just look it up online and say, oh,

505
00:23:44,320 --> 00:23:45,920
Speaker 1: this guy says he does a good job with hearts.

506
00:23:46,000 --> 00:23:48,520
Speaker 1: You know, I'm not going to that guy's. It's funny

507
00:23:48,560 --> 00:23:54,560
Speaker 1: because I recall using UM a mortgage broker in twenty fourteen,

508
00:23:55,119 --> 00:23:57,399
Speaker 1: but a lot of my roller decks, a lot of

509
00:23:57,440 --> 00:24:01,680
Speaker 1: my contact list of mortgage brokers, half these guys were

510
00:24:01,760 --> 00:24:03,920
Speaker 1: out of the business. So let me circle back and

511
00:24:03,960 --> 00:24:09,040
Speaker 1: ask you UM a great financial crisis question. You know,

512
00:24:09,119 --> 00:24:11,520
Speaker 1: what was the lesson from that and and what did

513
00:24:11,560 --> 00:24:15,840
Speaker 1: you personally learn from companies like Countrywide that had such

514
00:24:15,840 --> 00:24:20,399
Speaker 1: a successful business and then blew themselves up. What we

515
00:24:20,560 --> 00:24:23,240
Speaker 1: learned is quality always wins, and so I want to

516
00:24:23,280 --> 00:24:25,560
Speaker 1: be the biggest, but I'm not gonna have a sacrifice

517
00:24:25,560 --> 00:24:28,080
Speaker 1: being the best. We are the best mortgage coming in America,

518
00:24:28,520 --> 00:24:31,040
Speaker 1: and we were proud of that. Our technology, our service,

519
00:24:31,080 --> 00:24:33,080
Speaker 1: are pricing, everything is the best. But we are not

520
00:24:33,119 --> 00:24:34,560
Speaker 1: the biggest. We are number two right now, but I

521
00:24:34,600 --> 00:24:37,960
Speaker 1: will never I'd rather be number thirty eight, as competitive

522
00:24:37,960 --> 00:24:40,520
Speaker 1: as I am, then sacrifice the quality what we do.

523
00:24:40,560 --> 00:24:42,119
Speaker 1: So what happened in the past, and I don't know

524
00:24:42,200 --> 00:24:44,720
Speaker 1: Angelo Mozillo and country wide that well, Um, all I

525
00:24:44,760 --> 00:24:46,600
Speaker 1: know is I study things and see what people have done.

526
00:24:47,040 --> 00:24:49,359
Speaker 1: I know that the type of loans we do is

527
00:24:49,400 --> 00:24:52,000
Speaker 1: the key, and people focus on like, oh, well I

528
00:24:52,000 --> 00:24:53,359
Speaker 1: could do more. I could do more loans right now,

529
00:24:53,440 --> 00:24:55,240
Speaker 1: right now, I could do Maybe I could be number

530
00:24:55,280 --> 00:24:57,480
Speaker 1: one if I if I opened my credit box to

531
00:24:57,560 --> 00:24:59,280
Speaker 1: do loans for people that maybe are a little bit

532
00:24:59,320 --> 00:25:01,399
Speaker 1: more on the gray or Yeah. We had our company

533
00:25:01,480 --> 00:25:04,120
Speaker 1: believe in long term success, not short term, and we're

534
00:25:04,119 --> 00:25:05,960
Speaker 1: gonna we're playing the long game, and so we're gonna

535
00:25:05,960 --> 00:25:07,960
Speaker 1: focus on doing the right things because I'm gonna be

536
00:25:08,000 --> 00:25:10,200
Speaker 1: here running it. I'm gonna I still own ninety four

537
00:25:10,200 --> 00:25:12,159
Speaker 1: pers And someone said oh, you're your shareholders. I go

538
00:25:12,280 --> 00:25:14,840
Speaker 1: my shareholders. I have one of the have billion shares.

539
00:25:15,200 --> 00:25:17,480
Speaker 1: I'm the biggest shareholder. I promise you I'm doing everything

540
00:25:17,520 --> 00:25:19,960
Speaker 1: best for the shareholders all the time because I'm I'm

541
00:25:20,000 --> 00:25:21,560
Speaker 1: the biggest one. We're all on the same team. But

542
00:25:21,960 --> 00:25:24,520
Speaker 1: that does not mean what's best for shareholders or best

543
00:25:24,520 --> 00:25:26,880
Speaker 1: for anyone is to do something crazy in third quarter

544
00:25:26,920 --> 00:25:30,320
Speaker 1: two one that will pay for in two And I

545
00:25:30,359 --> 00:25:32,000
Speaker 1: think that's what happened in the past in the mortgage

546
00:25:32,000 --> 00:25:34,200
Speaker 1: industry is people got a little bit focused on greedy,

547
00:25:34,400 --> 00:25:36,159
Speaker 1: got maybe a little greedy, maybe got a little over

548
00:25:36,200 --> 00:25:38,280
Speaker 1: the skis on certain things that's not gonna happen at

549
00:25:38,320 --> 00:25:42,160
Speaker 1: you WM. Huh really quite interesting. Let's talk a little

550
00:25:42,160 --> 00:25:45,760
Speaker 1: bit about what's going on with rates today. Um, and

551
00:25:45,960 --> 00:25:48,800
Speaker 1: obviously we have to look back at what took place

552
00:25:49,400 --> 00:25:54,680
Speaker 1: last year. How did the pandemic impact home sales and prices?

553
00:25:54,720 --> 00:25:58,160
Speaker 1: And when did you first start to see things, uh,

554
00:25:58,200 --> 00:26:00,800
Speaker 1: in the mortgage market that eight things. You're getting a

555
00:26:00,840 --> 00:26:04,719
Speaker 1: little low wacky out here. Yeah, you know, obviously at

556
00:26:04,840 --> 00:26:07,439
Speaker 1: the pandemic or when the pandemic you know, first started

557
00:26:07,440 --> 00:26:09,760
Speaker 1: back in March of last year. Um, you know, a

558
00:26:09,800 --> 00:26:12,440
Speaker 1: lot of crazy things are happening. Rage dropped because the

559
00:26:12,480 --> 00:26:15,200
Speaker 1: feed is buying you know, um, a lot of mortgage

560
00:26:15,240 --> 00:26:17,359
Speaker 1: backed securities. A lot of things happened that people were

561
00:26:17,400 --> 00:26:20,000
Speaker 1: not expecting. Um, it all kind of settled down. It's

562
00:26:20,000 --> 00:26:22,680
Speaker 1: still buying a lot of mortgage in Rates were extremely

563
00:26:22,720 --> 00:26:25,119
Speaker 1: low for the second half of last year. Thirty year

564
00:26:25,200 --> 00:26:27,880
Speaker 1: fixed in the twos, which is never seen before, right,

565
00:26:28,119 --> 00:26:30,879
Speaker 1: and so thirty year fixed rates in the two's was

566
00:26:30,920 --> 00:26:33,520
Speaker 1: what was common. And the crazy thing is it's still

567
00:26:33,520 --> 00:26:36,000
Speaker 1: common today. It's still happening, and so rage dropped and

568
00:26:36,000 --> 00:26:37,679
Speaker 1: I I think they had as low as two and

569
00:26:37,680 --> 00:26:39,440
Speaker 1: a half thirty year fix, two and three eights thirty

570
00:26:39,480 --> 00:26:41,359
Speaker 1: year fix. So if you're getting a conmentional alone, should

571
00:26:41,359 --> 00:26:43,359
Speaker 1: be getting two and a half two and three eights.

572
00:26:43,400 --> 00:26:45,600
Speaker 1: But then rache went up for a little bit this

573
00:26:45,680 --> 00:26:48,159
Speaker 1: year and everyone says old rates and went off, everyone's

574
00:26:48,200 --> 00:26:49,959
Speaker 1: gonna slow down. Well, rates are still two point eight

575
00:26:49,960 --> 00:26:52,720
Speaker 1: seven five. You know, there's still all time lows. And

576
00:26:52,760 --> 00:26:54,520
Speaker 1: so anyone that didn't take advantage of it is still

577
00:26:54,520 --> 00:26:56,760
Speaker 1: can take advantage of today. People that are buying homes,

578
00:26:56,800 --> 00:26:58,200
Speaker 1: which is a big deal right now because that's a

579
00:26:58,240 --> 00:27:01,360
Speaker 1: big percentage of our business. There actually taken advantage of that. Hey,

580
00:27:01,359 --> 00:27:04,600
Speaker 1: that three thousand house I can actually buy with two

581
00:27:04,640 --> 00:27:06,560
Speaker 1: points on five interest rate rather than three and a

582
00:27:06,560 --> 00:27:08,600
Speaker 1: half or four percent, which is actually giving them a

583
00:27:08,640 --> 00:27:11,560
Speaker 1: great opportunity to buy a house to maybe they couldn't

584
00:27:11,600 --> 00:27:14,280
Speaker 1: buy because rache Al solo. So rates are extremely low

585
00:27:14,359 --> 00:27:16,520
Speaker 1: right now. They I believe they're gonna stay low through

586
00:27:16,560 --> 00:27:19,480
Speaker 1: the rest this year. Um, but they are going to

587
00:27:19,560 --> 00:27:20,959
Speaker 1: take up and they have picked up a little bit

588
00:27:21,000 --> 00:27:24,960
Speaker 1: so far. So banks are known for making money on

589
00:27:25,080 --> 00:27:28,840
Speaker 1: the spread, and that spread gets wider the higher rates are,

590
00:27:28,920 --> 00:27:31,640
Speaker 1: which raises the question how hard is it to make

591
00:27:31,680 --> 00:27:34,400
Speaker 1: money on a thirty year mortgage with rates under three?

592
00:27:35,840 --> 00:27:38,800
Speaker 1: What does that do to your profit margin as an

593
00:27:38,880 --> 00:27:42,600
Speaker 1: underwriter and a wholesaler? You know, it doesn't really impact

594
00:27:42,640 --> 00:27:45,160
Speaker 1: it much. So you know, we're not we're not portfolios.

595
00:27:45,160 --> 00:27:48,360
Speaker 1: Los loans are being securitized with Fannie May Freddie mc

596
00:27:48,440 --> 00:27:50,600
Speaker 1: Jinny May. And so whether the race two eights on

597
00:27:50,720 --> 00:27:53,320
Speaker 1: five or three eight five, the difference than what we

598
00:27:53,400 --> 00:27:56,240
Speaker 1: make is not is negligible, It's the same thing. And

599
00:27:56,280 --> 00:27:58,359
Speaker 1: so I actually make an argument the reverse that as

600
00:27:58,440 --> 00:28:00,560
Speaker 1: rates go up, you make less because there's left loans

601
00:28:00,560 --> 00:28:03,399
Speaker 1: out there, so people are competitively pricing their loans or

602
00:28:03,440 --> 00:28:06,800
Speaker 1: making trying to squeeze their margins to get more business

603
00:28:06,920 --> 00:28:09,320
Speaker 1: rather than make more money. And so when rates are

604
00:28:09,359 --> 00:28:11,359
Speaker 1: low is actually when people make a good amount of

605
00:28:11,359 --> 00:28:13,520
Speaker 1: money on on the loans, because there's so many loans

606
00:28:13,520 --> 00:28:15,439
Speaker 1: out there that people don't have to be as price well.

607
00:28:15,480 --> 00:28:17,000
Speaker 1: And that's why it's so important to go to a broker,

608
00:28:17,040 --> 00:28:18,840
Speaker 1: because if you go to some lender, you don't know,

609
00:28:18,880 --> 00:28:20,840
Speaker 1: like you're not in the business berry you don't know

610
00:28:20,960 --> 00:28:22,400
Speaker 1: three and an eighth is the right rate or two

611
00:28:22,440 --> 00:28:25,240
Speaker 1: points and five you don't know. But the mortgage broker

612
00:28:25,280 --> 00:28:27,160
Speaker 1: will know, and he'll say, no, you're actually two point

613
00:28:27,240 --> 00:28:28,800
Speaker 1: seven five in here's the lender that we can sell

614
00:28:28,840 --> 00:28:30,879
Speaker 1: it to and work with on it. And so I

615
00:28:30,880 --> 00:28:32,959
Speaker 1: think that's an important thing is that as rates go up,

616
00:28:32,960 --> 00:28:35,040
Speaker 1: it does not mean you make more money. It's actually,

617
00:28:35,240 --> 00:28:37,400
Speaker 1: I could make an argument that's the reverse in many respects.

618
00:28:38,240 --> 00:28:42,200
Speaker 1: So so let's say rates go over four percent at

619
00:28:42,240 --> 00:28:44,600
Speaker 1: some point in the future, and right now, where are

620
00:28:44,600 --> 00:28:48,000
Speaker 1: we fift of people have mortgages with rates under four percent?

621
00:28:48,480 --> 00:28:52,080
Speaker 1: What does that mean for the volume of new originations

622
00:28:52,520 --> 00:28:56,280
Speaker 1: And what does that mean for refinancings. Yeah, it's gonna

623
00:28:56,280 --> 00:28:58,440
Speaker 1: slow it down substantially. And that's actually gonna be the

624
00:28:58,440 --> 00:29:00,840
Speaker 1: part that helps you w M my company become the

625
00:29:00,880 --> 00:29:03,480
Speaker 1: number one overall lender because we are not dependent the

626
00:29:03,520 --> 00:29:06,160
Speaker 1: number one lender right now. It does about their business

627
00:29:06,240 --> 00:29:08,760
Speaker 1: is refinance. So yeah, it's great when rache a two,

628
00:29:08,800 --> 00:29:11,640
Speaker 1: eight and five. What happens when there's three and five, Well,

629
00:29:11,680 --> 00:29:13,760
Speaker 1: there's me a lot less reefinance. It already slowed a

630
00:29:13,800 --> 00:29:16,000
Speaker 1: lot of people down if you foul you know, our

631
00:29:16,040 --> 00:29:19,120
Speaker 1: earnings call and in the number one lender rocket there

632
00:29:19,240 --> 00:29:22,920
Speaker 1: they guided to do fifteen less business than the second quarter,

633
00:29:22,920 --> 00:29:24,800
Speaker 1: that is the first quarter, because rates went up just

634
00:29:25,000 --> 00:29:26,680
Speaker 1: from two and a half to two points then five.

635
00:29:27,160 --> 00:29:29,040
Speaker 1: I guided the reverse. I said, we're gonna do more

636
00:29:29,120 --> 00:29:31,680
Speaker 1: business in the second quarter than the first quarter. And

637
00:29:31,760 --> 00:29:34,680
Speaker 1: so the point is when you're doing purchases and you're like,

638
00:29:34,760 --> 00:29:37,560
Speaker 1: our business is not a cyclical and so rates. A

639
00:29:37,560 --> 00:29:40,560
Speaker 1: lot of Organs shompanies are strictly refinance shops. Well that's

640
00:29:40,600 --> 00:29:42,840
Speaker 1: great in a two thousand twenty boom year, but what

641
00:29:42,840 --> 00:29:45,800
Speaker 1: about a two thousand twenty two rising rate year. How

642
00:29:45,840 --> 00:29:47,520
Speaker 1: are you gonna live, How you gonna survive, how you

643
00:29:47,600 --> 00:29:50,480
Speaker 1: gonna succeed? And that's why we're excited about the opportunities.

644
00:29:50,480 --> 00:29:52,600
Speaker 1: So when rates do go up, well we'll win in

645
00:29:52,680 --> 00:29:54,680
Speaker 1: the low rate environment. When rates go up, that's actually

646
00:29:54,720 --> 00:29:58,120
Speaker 1: when the power of our business really shines. M That's

647
00:29:58,160 --> 00:30:03,320
Speaker 1: that's really interesting. So in terms of those refinancings, how

648
00:30:03,360 --> 00:30:06,840
Speaker 1: aggressively are people tapping the equity in their homes compared

649
00:30:06,920 --> 00:30:09,880
Speaker 1: to I don't know, mid two thousands of five oh six?

650
00:30:10,240 --> 00:30:14,360
Speaker 1: Is this really that large a driver? Someone says of

651
00:30:14,440 --> 00:30:17,920
Speaker 1: their business is refies that seems to be really cyclical

652
00:30:18,360 --> 00:30:22,480
Speaker 1: and and rate sensitive. It is, you got it here

653
00:30:22,480 --> 00:30:25,840
Speaker 1: exactly right. There is something that's cash out and people

654
00:30:25,880 --> 00:30:27,840
Speaker 1: tapping that with the house is probably a little less

655
00:30:27,920 --> 00:30:31,920
Speaker 1: rate sensitive, but it's still rate sensitive. You know, no

656
00:30:31,960 --> 00:30:34,600
Speaker 1: one's gonna people, you know, and obviously housing values have

657
00:30:34,640 --> 00:30:36,440
Speaker 1: gone up, so there is a little equity and pupil's houses.

658
00:30:36,440 --> 00:30:38,680
Speaker 1: But the reality is this, if your business is nine

659
00:30:38,840 --> 00:30:42,720
Speaker 1: percent anything, you're probably going to be in a tougher position,

660
00:30:43,000 --> 00:30:45,240
Speaker 1: especially if it's something you don't control, which is the rates.

661
00:30:45,240 --> 00:30:47,360
Speaker 1: Nobody controls the rates. I can't keep rates low and

662
00:30:47,400 --> 00:30:49,360
Speaker 1: then there can the other lenders. You know, you gotta

663
00:30:49,760 --> 00:30:51,760
Speaker 1: you gotta live with whatever rates are, and you gotta

664
00:30:51,760 --> 00:30:53,600
Speaker 1: make the best out of it. So if your business

665
00:30:53,680 --> 00:30:56,920
Speaker 1: is to one one focused on we really win when

666
00:30:56,920 --> 00:30:59,560
Speaker 1: low rates happen. What happens when high rates happen, right,

667
00:30:59,720 --> 00:31:02,000
Speaker 1: and and that's gonna happen right even to the point

668
00:31:02,080 --> 00:31:04,440
Speaker 1: that you made earlier. Even if races don't go high

669
00:31:04,600 --> 00:31:06,240
Speaker 1: from what you and I would think of as high,

670
00:31:06,240 --> 00:31:09,720
Speaker 1: which is five six seven percent relatively, they just go

671
00:31:09,800 --> 00:31:12,400
Speaker 1: to three and a half, it will stop the refinances

672
00:31:12,440 --> 00:31:14,720
Speaker 1: because that means almost everyone there's no reason to refinance

673
00:31:14,760 --> 00:31:16,040
Speaker 1: if you have a three and a quarter per cent

674
00:31:16,120 --> 00:31:18,520
Speaker 1: rate or two point eight five. So many people have

675
00:31:18,560 --> 00:31:20,360
Speaker 1: a thirty year fixed in the twos right now that

676
00:31:20,360 --> 00:31:22,080
Speaker 1: they're not going to be refinancing into a three and

677
00:31:22,080 --> 00:31:24,160
Speaker 1: a half. So therefore, the only time you really need

678
00:31:24,200 --> 00:31:27,160
Speaker 1: to revorce a refinances a divorce or a cash out.

679
00:31:27,200 --> 00:31:28,920
Speaker 1: And people aren't gonna cash out and pay a higher

680
00:31:28,960 --> 00:31:31,560
Speaker 1: interest rate unless they really need the cash out of

681
00:31:31,560 --> 00:31:36,000
Speaker 1: their house. Huh. Interesting you mentioned home prices ticking up.

682
00:31:36,040 --> 00:31:39,160
Speaker 1: I keep reading lots and lots of people claiming it's

683
00:31:39,160 --> 00:31:41,880
Speaker 1: a bubble. What are your thoughts on these increased to

684
00:31:41,920 --> 00:31:46,480
Speaker 1: home prices. Is it just limited supply, limited inventory or

685
00:31:46,520 --> 00:31:49,560
Speaker 1: is there something else going on here? Yeah, so it's

686
00:31:49,600 --> 00:31:53,040
Speaker 1: limited inventory, but partially because remember we're still finishing up

687
00:31:53,040 --> 00:31:55,240
Speaker 1: this pandemic or getting through a pandemic where you know,

688
00:31:55,240 --> 00:31:58,000
Speaker 1: there's over a million consumers right now that aren't making

689
00:31:58,040 --> 00:32:00,840
Speaker 1: payments on their mortgage, so they're in four earrants. Well

690
00:32:00,920 --> 00:32:02,280
Speaker 1: what does that mean. Well, if I'm not making a

691
00:32:02,280 --> 00:32:04,160
Speaker 1: payment on my mortgage, I'm not not settling in my house.

692
00:32:04,160 --> 00:32:06,440
Speaker 1: It's pretty good deal I got going right now, right,

693
00:32:06,560 --> 00:32:08,880
Speaker 1: And so people aren't selling at the pace that they

694
00:32:08,880 --> 00:32:10,720
Speaker 1: should be. When that changes, I think there will be

695
00:32:10,720 --> 00:32:13,040
Speaker 1: a lot more inventory hitting the market. Now. Is it

696
00:32:13,080 --> 00:32:15,560
Speaker 1: a bubble? No, it's not a bubble. It's not. Well,

697
00:32:15,760 --> 00:32:17,400
Speaker 1: don how you to find a bubble? So I think

698
00:32:17,400 --> 00:32:19,360
Speaker 1: housing value should be going up ten percent a year.

699
00:32:19,440 --> 00:32:21,720
Speaker 1: Absolutely not. I think they go up one to three

700
00:32:21,720 --> 00:32:24,200
Speaker 1: percent a year, and that would be more normalized. It's

701
00:32:24,240 --> 00:32:25,960
Speaker 1: not like two thousand eight. Someone said to me, it's

702
00:32:25,960 --> 00:32:27,520
Speaker 1: just like two thousand day. Is that it's not like

703
00:32:27,520 --> 00:32:29,040
Speaker 1: two thousand eight? You don't know if you're talking about

704
00:32:29,040 --> 00:32:30,680
Speaker 1: It's nothing like two thousand and eight two thousand and

705
00:32:30,720 --> 00:32:33,680
Speaker 1: eight was a bubble bigger than this one, but it

706
00:32:33,720 --> 00:32:36,960
Speaker 1: was built on a a horrible cracked foundation in the

707
00:32:36,960 --> 00:32:39,360
Speaker 1: mortgage industry. The mortgage ry is not like that. People

708
00:32:39,360 --> 00:32:42,120
Speaker 1: were getting loans when they didn't even qualify for back then,

709
00:32:42,120 --> 00:32:44,120
Speaker 1: so when and they're also doing adjustment rape, so then

710
00:32:44,120 --> 00:32:45,920
Speaker 1: there rate went up, you had to sell, and the

711
00:32:45,960 --> 00:32:48,920
Speaker 1: whole thing collapsed. That's not happening right now, I'm sure

712
00:32:48,960 --> 00:32:52,320
Speaker 1: of that. What is happening is that there house today

713
00:32:52,560 --> 00:32:54,640
Speaker 1: that maybe should only be worth three twenty because it's

714
00:32:54,680 --> 00:32:56,920
Speaker 1: kind of went up faster than you expected. Should you

715
00:32:57,000 --> 00:32:59,400
Speaker 1: still buy it at three thirty? You probably should, because

716
00:32:59,400 --> 00:33:00,720
Speaker 1: you know, unless you're only be there for a less

717
00:33:00,720 --> 00:33:02,360
Speaker 1: than a year or two, because housing values is not

718
00:33:02,400 --> 00:33:05,600
Speaker 1: gonna go from three nine, maybe three thirty and three

719
00:33:05,640 --> 00:33:07,680
Speaker 1: thirty two next year and three four the following you

720
00:33:07,760 --> 00:33:09,640
Speaker 1: doesn't go fast, but you're still getting in at a

721
00:33:09,640 --> 00:33:12,080
Speaker 1: two point seven five interest rate. So people thinking that

722
00:33:12,120 --> 00:33:13,880
Speaker 1: this whole thing is gonna collapse, they just don't know

723
00:33:13,920 --> 00:33:15,800
Speaker 1: what they're talking about. They're just not right. Right. You

724
00:33:15,840 --> 00:33:18,280
Speaker 1: gotta focus on the cost to carry, not what you

725
00:33:18,320 --> 00:33:21,560
Speaker 1: are actually paying, but but that raises the interesting question.

726
00:33:21,600 --> 00:33:25,200
Speaker 1: You mentioned adjustable rate mortgages. I'm kind of surprised to

727
00:33:25,240 --> 00:33:28,600
Speaker 1: see a lot of ads for arms when rates are

728
00:33:28,600 --> 00:33:31,040
Speaker 1: this low. What what are your thoughts on on people

729
00:33:31,040 --> 00:33:36,840
Speaker 1: who are underwriting a ton of adjustable mortgages these days. Yeah,

730
00:33:36,880 --> 00:33:39,440
Speaker 1: so adjust for rate mortgages these days are much different

731
00:33:39,440 --> 00:33:42,160
Speaker 1: than back then. Now, we don't do very many at all. Actually,

732
00:33:42,120 --> 00:33:43,880
Speaker 1: I could almost say we had do zero because it's

733
00:33:43,880 --> 00:33:46,480
Speaker 1: it's not even a uh point one of a percent

734
00:33:46,520 --> 00:33:48,480
Speaker 1: of what we do, but we'll call it. We don't

735
00:33:48,480 --> 00:33:49,800
Speaker 1: really do them. We have it on the rate sheet,

736
00:33:49,840 --> 00:33:52,200
Speaker 1: it's available. Well, here's what I think about arms. Arms

737
00:33:52,240 --> 00:33:54,080
Speaker 1: are different today than back then. Back then it was

738
00:33:54,120 --> 00:33:58,160
Speaker 1: two year arms with pre payment penalties, and the rates

739
00:33:58,200 --> 00:34:00,320
Speaker 1: went up like a half percent I mean extumely or

740
00:34:00,440 --> 00:34:04,560
Speaker 1: multiple percent per year or per adjustment period. These arms

741
00:34:04,600 --> 00:34:06,960
Speaker 1: today are done through Fannie Mae, Freddie Mac. It's it's

742
00:34:06,960 --> 00:34:10,880
Speaker 1: with the CFTDE what they've done. They are much safer arms. However,

743
00:34:11,360 --> 00:34:13,880
Speaker 1: thirty year fixed in the twos unless you're selling in

744
00:34:13,920 --> 00:34:15,319
Speaker 1: the next two or three years, how are you not

745
00:34:15,360 --> 00:34:18,040
Speaker 1: taking a third year fix at two points and five? Right?

746
00:34:18,160 --> 00:34:21,279
Speaker 1: And so people, you know, most people are doing a

747
00:34:21,360 --> 00:34:25,200
Speaker 1: fixed rate. Um. I think sometimes people are market arms,

748
00:34:25,239 --> 00:34:26,919
Speaker 1: and that's part of the problem with why people don't

749
00:34:26,960 --> 00:34:28,880
Speaker 1: go They go to these big commercials you see some

750
00:34:28,880 --> 00:34:30,680
Speaker 1: one time about arms or jumper rate more. You see

751
00:34:30,760 --> 00:34:32,320
Speaker 1: a teaser rate of two and a quarter. Oh, I

752
00:34:32,360 --> 00:34:34,120
Speaker 1: want two in a quarter. When you call them, you

753
00:34:34,160 --> 00:34:35,640
Speaker 1: find out it's an army, find out it's a three

754
00:34:35,719 --> 00:34:37,600
Speaker 1: year arm or five year. I'm not really what you want.

755
00:34:37,920 --> 00:34:39,919
Speaker 1: And then you end up staying with them and getting

756
00:34:39,920 --> 00:34:41,360
Speaker 1: a thirty year fix at three and three eights and

757
00:34:41,400 --> 00:34:42,680
Speaker 1: you don't even know the difference that you should have

758
00:34:42,680 --> 00:34:44,799
Speaker 1: got two point seven five. And that's part of the

759
00:34:44,800 --> 00:34:47,080
Speaker 1: the the issue with going to a mortgage broker rather

760
00:34:47,080 --> 00:34:49,440
Speaker 1: than going to these big lenders. So let's talk a

761
00:34:49,480 --> 00:34:52,880
Speaker 1: little bit about the state of the national housing market.

762
00:34:53,480 --> 00:34:57,680
Speaker 1: What are your thoughts here. It seems like the underwriting

763
00:34:57,719 --> 00:35:02,120
Speaker 1: has become much more it's called it's circumspect or conservative

764
00:35:02,160 --> 00:35:06,400
Speaker 1: than it was a decade or two ago. Yeah. Absolutely,

765
00:35:06,440 --> 00:35:08,840
Speaker 1: I mean I think a decade or two ago it

766
00:35:08,960 --> 00:35:12,719
Speaker 1: wasn't it wasn't responsible ending. There's some things that happen

767
00:35:12,760 --> 00:35:14,399
Speaker 1: back then that we're not the right way. I think

768
00:35:14,560 --> 00:35:16,920
Speaker 1: there's a lot of rules in place now. It's a

769
00:35:17,040 --> 00:35:19,279
Speaker 1: very strong foundation of the mortgage industry. Right now. There

770
00:35:19,320 --> 00:35:22,960
Speaker 1: is not these shake shakier loans being given, like the

771
00:35:22,960 --> 00:35:24,839
Speaker 1: way you want to help everyone get a house, if

772
00:35:24,840 --> 00:35:26,520
Speaker 1: they want a house, but you've got to make sure

773
00:35:26,520 --> 00:35:28,840
Speaker 1: that they meet all the criteria. They have the income,

774
00:35:28,880 --> 00:35:31,080
Speaker 1: they have a job, the house is worth what they

775
00:35:31,080 --> 00:35:32,719
Speaker 1: say it's worth. Right, there's a lot of things you

776
00:35:32,719 --> 00:35:34,839
Speaker 1: have to do and back then there's a lot Uh,

777
00:35:35,000 --> 00:35:38,040
Speaker 1: I don't the right word is flimsier rules, crazier rules,

778
00:35:38,200 --> 00:35:41,759
Speaker 1: rules that were not responsible ending right now responsible ending.

779
00:35:41,880 --> 00:35:43,759
Speaker 1: It's not hard to get a mortgage right now. If

780
00:35:43,800 --> 00:35:46,000
Speaker 1: you qualify, if you have if you pay your bills

781
00:35:46,000 --> 00:35:48,040
Speaker 1: on time, and you have a job and you make income,

782
00:35:48,360 --> 00:35:50,239
Speaker 1: mortgages are easy to get. You've got to, you know,

783
00:35:50,239 --> 00:35:51,799
Speaker 1: find the right person to help you get it. But

784
00:35:51,960 --> 00:35:55,040
Speaker 1: it's not if you you know, you're self employed and

785
00:35:55,080 --> 00:35:57,719
Speaker 1: you don't show any income, well it's a little different now.

786
00:35:57,920 --> 00:35:59,719
Speaker 1: You actually gotta prove that you make the income. Everyone

787
00:35:59,719 --> 00:36:01,839
Speaker 1: wants to proof that you can pay your mortgage right

788
00:36:01,880 --> 00:36:03,560
Speaker 1: so I just want to make sure I'm checking the

789
00:36:03,640 --> 00:36:06,799
Speaker 1: right boxes. If you want to mortgage, you have to

790
00:36:06,840 --> 00:36:09,120
Speaker 1: have a job, you have to have a credit history,

791
00:36:09,320 --> 00:36:12,840
Speaker 1: and the house has to be worth what you're paying

792
00:36:12,880 --> 00:36:16,080
Speaker 1: for it. These are like crazy restrictive rules. I mean,

793
00:36:16,719 --> 00:36:19,279
Speaker 1: who could buy the house into those? What? What's so

794
00:36:19,320 --> 00:36:22,840
Speaker 1: amazing because what you're saying is so obvious and self evident.

795
00:36:23,360 --> 00:36:26,080
Speaker 1: But how on earth did we ever go off the

796
00:36:26,200 --> 00:36:30,000
Speaker 1: rails in the mid two thousand's where uh, you don't

797
00:36:30,040 --> 00:36:32,400
Speaker 1: need a job, you don't need a credit history, and

798
00:36:32,440 --> 00:36:35,200
Speaker 1: who cares what the house is worth? That seems just

799
00:36:35,719 --> 00:36:40,160
Speaker 1: absolutely insane. Yeah, well that that agreed gotten the way

800
00:36:40,239 --> 00:36:42,960
Speaker 1: people started, you know, one upping each other, trying to think,

801
00:36:43,040 --> 00:36:47,080
Speaker 1: and they didn't understand the constant the whole American world

802
00:36:47,160 --> 00:36:50,160
Speaker 1: are really the whole world weren't And so now everyone

803
00:36:50,200 --> 00:36:53,880
Speaker 1: understands it and respects that housing drives the economy in

804
00:36:53,920 --> 00:36:56,000
Speaker 1: such a way to do and to mess up or

805
00:36:56,040 --> 00:36:59,440
Speaker 1: break housing, Um, it's not it's not a way that's

806
00:36:59,440 --> 00:37:01,920
Speaker 1: gonna win long term. And that's what happened. People got greedy,

807
00:37:02,040 --> 00:37:04,440
Speaker 1: people got were trying to make money. Things weren't working. Well,

808
00:37:04,480 --> 00:37:07,279
Speaker 1: they're kind of one upping each other on products and nuances,

809
00:37:07,360 --> 00:37:09,200
Speaker 1: and the whole thing kind of fell apart. And I

810
00:37:09,239 --> 00:37:10,799
Speaker 1: don't think that. I don't think i'll see that happen

811
00:37:10,840 --> 00:37:13,080
Speaker 1: again in my lifetime. Does it mean that there won't

812
00:37:13,080 --> 00:37:15,839
Speaker 1: be some gray area stuff going on. I'm sure there

813
00:37:15,880 --> 00:37:17,520
Speaker 1: will be, but it's not gonna be at that extreme.

814
00:37:17,880 --> 00:37:21,960
Speaker 1: So you mentioned earlier, you're gonna see volume drop when

815
00:37:22,080 --> 00:37:26,080
Speaker 1: rates run up. For some of the other mortgage underwriters

816
00:37:26,600 --> 00:37:29,799
Speaker 1: are what happens to their underrunning standards when they see

817
00:37:30,360 --> 00:37:33,200
Speaker 1: their their revenue drop in their volume drop. Do they

818
00:37:33,239 --> 00:37:35,879
Speaker 1: start to get stupid again or or have they learned

819
00:37:35,920 --> 00:37:39,680
Speaker 1: their lesson from you know two thousand eight oh nine. Well,

820
00:37:39,719 --> 00:37:42,640
Speaker 1: so good, great question, and yes they will start to

821
00:37:42,680 --> 00:37:45,320
Speaker 1: get I don't know if we're a stupid or riskier

822
00:37:45,400 --> 00:37:48,239
Speaker 1: or a little bit more. But because of the what

823
00:37:48,320 --> 00:37:50,880
Speaker 1: the CFU needed a guy named Richard Cordans, they put

824
00:37:50,920 --> 00:37:53,960
Speaker 1: in some rules that basically restrict your ability ever doing

825
00:37:54,000 --> 00:37:56,319
Speaker 1: it to the extremes. I'm not saying people can't get

826
00:37:56,360 --> 00:37:59,080
Speaker 1: in some of the gray areas, but on a mass scale,

827
00:37:59,480 --> 00:38:02,000
Speaker 1: the extreme teams such as back to our Roger joke

828
00:38:02,200 --> 00:38:05,600
Speaker 1: or comment about no income, no job, here's a loan

829
00:38:06,080 --> 00:38:08,920
Speaker 1: like that that that can't be done anymore? Right, that

830
00:38:09,000 --> 00:38:11,040
Speaker 1: can't be done anymore? And so therefore there are some

831
00:38:11,160 --> 00:38:13,440
Speaker 1: rules in place that it's just really not gonna be

832
00:38:13,520 --> 00:38:15,520
Speaker 1: on a mass scale that you can get those things done.

833
00:38:15,520 --> 00:38:19,560
Speaker 1: And so I'm not concerned. Do lenders lower their standards, Absolutely,

834
00:38:19,560 --> 00:38:21,799
Speaker 1: I'm sure they do um when rache go up, But

835
00:38:21,840 --> 00:38:23,320
Speaker 1: at the same time, it's not gonna be able to

836
00:38:23,360 --> 00:38:25,800
Speaker 1: be lowered to put the American economy at risk. I

837
00:38:25,840 --> 00:38:29,440
Speaker 1: ad last time. So I know the g s C

838
00:38:29,560 --> 00:38:32,520
Speaker 1: as a government sponsored entities like Fannie Mae and Freddie

839
00:38:32,520 --> 00:38:38,000
Speaker 1: Mac focus mostly on the conforming world traditional mortgages. What

840
00:38:38,120 --> 00:38:42,920
Speaker 1: about what's become a very big segment, the jumbo mortgage market.

841
00:38:43,320 --> 00:38:45,560
Speaker 1: How do you see that developing? Do you guys play

842
00:38:45,600 --> 00:38:48,360
Speaker 1: in that space? Um, tell us a little bit about

843
00:38:48,400 --> 00:38:51,720
Speaker 1: because I know the real estate it's been growing very rapidly.

844
00:38:51,960 --> 00:38:54,279
Speaker 1: What do you guys do in terms of jumbo more

845
00:38:54,760 --> 00:38:58,279
Speaker 1: mortgages and how do you see that space? Yeah, so

846
00:38:58,320 --> 00:38:59,960
Speaker 1: it's it's definitely a space we do a lot of,

847
00:39:00,040 --> 00:39:02,120
Speaker 1: isn't that We do billions of dollars a month of it.

848
00:39:02,360 --> 00:39:03,920
Speaker 1: So we're doing a lot of business and jump. But

849
00:39:04,280 --> 00:39:10,840
Speaker 1: that's those loans are put down good credit score people.

850
00:39:10,960 --> 00:39:13,799
Speaker 1: Once again, the principles that we talked about where they

851
00:39:13,840 --> 00:39:15,840
Speaker 1: have to have a job to show their income it

852
00:39:15,920 --> 00:39:17,000
Speaker 1: to prove it. A lot of these two are sell

853
00:39:17,000 --> 00:39:18,839
Speaker 1: employted and they actually have to show it on their

854
00:39:18,840 --> 00:39:21,000
Speaker 1: tax returns in order to qualify for one of these loans.

855
00:39:21,000 --> 00:39:24,399
Speaker 1: And so that's those are good solid loans, and those

856
00:39:24,440 --> 00:39:26,319
Speaker 1: are good solid borrowers, and those are people you want

857
00:39:26,360 --> 00:39:28,279
Speaker 1: to be able to serve so that they can buy

858
00:39:28,280 --> 00:39:33,520
Speaker 1: a house. Really really really intriguing. Um. So, a recent

859
00:39:33,800 --> 00:39:38,400
Speaker 1: Wall Street Journal edition had a column, real estate shows

860
00:39:38,480 --> 00:39:41,680
Speaker 1: tech is no Holy Grail. What are your thoughts on

861
00:39:41,680 --> 00:39:45,839
Speaker 1: on these so called I buyers, these tech companies that

862
00:39:46,160 --> 00:39:49,839
Speaker 1: offered almost like a used car, Hey, we'll buy your

863
00:39:49,880 --> 00:39:53,000
Speaker 1: house um directly from you. You don't have to list

864
00:39:53,000 --> 00:39:55,319
Speaker 1: it for sale. Do you have any thoughts on on

865
00:39:55,360 --> 00:39:59,880
Speaker 1: that growing industry? Yeah, no, it's interesting. I like that

866
00:40:00,000 --> 00:40:02,000
Speaker 1: people were trying to innovate in the residential mortgage space,

867
00:40:02,080 --> 00:40:06,440
Speaker 1: residential housing space. The reality is this, you gotta always

868
00:40:06,440 --> 00:40:08,560
Speaker 1: follow the money, right, Why is someone doing that they're

869
00:40:08,560 --> 00:40:11,080
Speaker 1: buying your house today because they're probably buying it below

870
00:40:11,080 --> 00:40:13,840
Speaker 1: what it actually should be selling for, right, And is

871
00:40:13,880 --> 00:40:15,759
Speaker 1: that the best for you? Is it? Is it that

872
00:40:15,840 --> 00:40:18,000
Speaker 1: hard to sell a house these days, you know. So

873
00:40:18,160 --> 00:40:21,080
Speaker 1: I guess my perspective is I'm not gonna call them gimmicks,

874
00:40:21,080 --> 00:40:24,279
Speaker 1: because I'm sure there's obviously some substantiated strong businesses, But

875
00:40:24,360 --> 00:40:27,320
Speaker 1: the reality is, you know, those things aren't gonna become

876
00:40:27,360 --> 00:40:30,279
Speaker 1: the mass right there there. There's there's different reasons they're

877
00:40:30,280 --> 00:40:32,120
Speaker 1: doing it. Everyone's trying to make money in there, and

878
00:40:32,360 --> 00:40:34,719
Speaker 1: if there's a gap, there's an arbitrage there that hey,

879
00:40:35,000 --> 00:40:36,359
Speaker 1: you want to stall your house with three hundred, I'll

880
00:40:36,360 --> 00:40:37,920
Speaker 1: buy it for two ninety to day so you don't

881
00:40:37,920 --> 00:40:39,319
Speaker 1: have to worry about it and go buy another house,

882
00:40:39,400 --> 00:40:40,960
Speaker 1: and I'll try to sell it for three or five.

883
00:40:41,160 --> 00:40:43,840
Speaker 1: They're trying to make an arbitrage right there. Anyways. And

884
00:40:43,880 --> 00:40:47,279
Speaker 1: so do I think they're long standing maybe? Do I

885
00:40:47,280 --> 00:40:49,800
Speaker 1: think they're gimmicks, Yes? Do I think that they're gonna

886
00:40:49,800 --> 00:40:54,400
Speaker 1: be mass scale? No, m That's that's really kind of interesting.

887
00:40:54,520 --> 00:40:57,200
Speaker 1: And and I want to just touch on on the

888
00:40:57,239 --> 00:41:02,000
Speaker 1: fact that you guys when public via a spack, tell

889
00:41:02,080 --> 00:41:04,439
Speaker 1: us a little bit about what that process was, like,

890
00:41:04,600 --> 00:41:07,040
Speaker 1: what why did you decide that was the right way

891
00:41:07,200 --> 00:41:12,960
Speaker 1: to go public? Yeah, so we obviously are large enough

892
00:41:12,960 --> 00:41:14,640
Speaker 1: and successful. I mean a lot of people think SPAC

893
00:41:14,800 --> 00:41:18,040
Speaker 1: SPAC must be a questionable company, and that's not anything

894
00:41:18,080 --> 00:41:20,000
Speaker 1: like I mean we we we we made three point

895
00:41:20,080 --> 00:41:22,359
Speaker 1: three billion dollars in profit last year. So we went

896
00:41:22,840 --> 00:41:25,360
Speaker 1: public through a SPECT because we chose that instead of

897
00:41:25,360 --> 00:41:27,520
Speaker 1: an I p O. We chose that because we felt

898
00:41:27,520 --> 00:41:30,920
Speaker 1: that was a better process for us for numerous reasons.

899
00:41:31,080 --> 00:41:34,120
Speaker 1: We also got partnered with Alec Goers and the Goers group,

900
00:41:34,120 --> 00:41:36,799
Speaker 1: and Alec did a great job and his team. You

901
00:41:36,800 --> 00:41:38,960
Speaker 1: know what I think about it is I'm going public.

902
00:41:39,640 --> 00:41:42,680
Speaker 1: I'm not I'm not going public again. So how do

903
00:41:42,760 --> 00:41:46,240
Speaker 1: you go public in the most efficient way possible while

904
00:41:46,440 --> 00:41:48,880
Speaker 1: having someone right shotgun and kind of advise you. And

905
00:41:48,880 --> 00:41:50,680
Speaker 1: that's what Alec Gore's and his team did. And so

906
00:41:50,840 --> 00:41:52,800
Speaker 1: we felt that the going public through a spect was

907
00:41:52,840 --> 00:41:54,560
Speaker 1: a better option for us than an I p O.

908
00:41:55,600 --> 00:41:57,879
Speaker 1: And I would do it again the same way. Now,

909
00:41:58,360 --> 00:42:00,360
Speaker 1: you know, certain every compy's kind of differ and obviously

910
00:42:00,400 --> 00:42:04,160
Speaker 1: real the largest back of all time, and but I

911
00:42:04,160 --> 00:42:06,120
Speaker 1: don't look at it based on evaluation. As I look

912
00:42:06,120 --> 00:42:08,279
Speaker 1: at is what's the best way to do this? And

913
00:42:08,320 --> 00:42:10,680
Speaker 1: I looked at both options. And although everyone in the

914
00:42:10,719 --> 00:42:13,000
Speaker 1: world tells you that I PO seems like a better option,

915
00:42:13,040 --> 00:42:14,719
Speaker 1: cause that's what everyone's always done. But I don't live

916
00:42:14,719 --> 00:42:16,640
Speaker 1: that way. I don't live on whatever one's always done it.

917
00:42:16,920 --> 00:42:19,120
Speaker 1: What's the best way, And we found that this is

918
00:42:19,160 --> 00:42:21,759
Speaker 1: the best way, and I think I chose correctly. So

919
00:42:21,800 --> 00:42:24,239
Speaker 1: what sort of guns have you gotten in terms of

920
00:42:24,320 --> 00:42:28,040
Speaker 1: how to handle suddenly you're the CEO of a public company?

921
00:42:28,320 --> 00:42:30,919
Speaker 1: Have you gotten any good advice about that? Or or

922
00:42:31,000 --> 00:42:34,960
Speaker 1: who have you been speaking to about it? No? You know,

923
00:42:35,080 --> 00:42:37,840
Speaker 1: I haven't, you know, focused my time on like what

924
00:42:38,000 --> 00:42:39,799
Speaker 1: I say. And there's a staying in business like what

925
00:42:39,880 --> 00:42:43,640
Speaker 1: got you here won't get you there? And my perspective

926
00:42:43,640 --> 00:42:45,560
Speaker 1: is what got me here will get me there. I'm

927
00:42:45,560 --> 00:42:47,400
Speaker 1: gonna stay in the weeds of my business. I'm not

928
00:42:47,400 --> 00:42:49,919
Speaker 1: gonna change what I do. I'm gonna continue to take

929
00:42:49,960 --> 00:42:52,840
Speaker 1: care of running our company for our team members, are clients.

930
00:42:53,000 --> 00:42:54,640
Speaker 1: Shareholders are always ran it, for sure. It was the

931
00:42:54,640 --> 00:42:56,879
Speaker 1: difference was sholders were only me back then. But now

932
00:42:56,920 --> 00:42:59,200
Speaker 1: I got everybody in my company's a shareholder, along with

933
00:42:59,320 --> 00:43:00,800
Speaker 1: a lot of people in the public, which we're excited

934
00:43:00,800 --> 00:43:03,040
Speaker 1: about as well. But take care of your team members,

935
00:43:03,040 --> 00:43:05,200
Speaker 1: take care of clients, take care of your you know,

936
00:43:05,400 --> 00:43:07,799
Speaker 1: the end consumer and at the same time take care

937
00:43:07,800 --> 00:43:10,239
Speaker 1: of your shareholders. And so nothing has really changed in

938
00:43:10,280 --> 00:43:13,520
Speaker 1: my business running daily. We obviously have more people on

939
00:43:13,560 --> 00:43:16,279
Speaker 1: investor relations, and we've got people on financial side that

940
00:43:16,520 --> 00:43:18,279
Speaker 1: are doing things, but running a business day to day,

941
00:43:18,760 --> 00:43:20,640
Speaker 1: I have not changed what I'm doing. Uh, And a

942
00:43:20,640 --> 00:43:22,520
Speaker 1: lot of investors back when we when we're doing this

943
00:43:22,600 --> 00:43:24,520
Speaker 1: back and the people were in our road show, we're

944
00:43:24,560 --> 00:43:26,719
Speaker 1: investing us, they wanted me to keep doing what I'm

945
00:43:26,719 --> 00:43:28,359
Speaker 1: doing because that's what they were buying into. They're buying

946
00:43:28,360 --> 00:43:30,080
Speaker 1: into our success and how we got to where we're

947
00:43:30,080 --> 00:43:31,719
Speaker 1: at and how we're gonna get to where we're going.

948
00:43:32,800 --> 00:43:35,680
Speaker 1: So what are the plans for all that capital that

949
00:43:35,840 --> 00:43:38,600
Speaker 1: you raised? How do you want to deploy that? The

950
00:43:38,640 --> 00:43:42,279
Speaker 1: big focus is one technology, continue to invest in technology.

951
00:43:43,000 --> 00:43:45,279
Speaker 1: We have done that and we're continue to innovate with that.

952
00:43:45,440 --> 00:43:48,040
Speaker 1: Second thing is we're investing in servicing. Right we we

953
00:43:48,040 --> 00:43:50,520
Speaker 1: we were Cuite. We we create this servicing asset that's

954
00:43:50,680 --> 00:43:53,360
Speaker 1: very um profitable and successful. I used to have to

955
00:43:53,400 --> 00:43:55,319
Speaker 1: sell it to bring in cash. Now I don't have

956
00:43:55,360 --> 00:43:56,920
Speaker 1: to sell it. I still can sell it if the

957
00:43:57,000 --> 00:43:58,840
Speaker 1: right opportunities there, but I don't need to sell, and

958
00:43:58,880 --> 00:44:02,680
Speaker 1: now I can want to sell. It's different. Huh. Well, Matt,

959
00:44:02,719 --> 00:44:05,520
Speaker 1: thank you so much for being so generous with your time.

960
00:44:05,560 --> 00:44:09,400
Speaker 1: This has been really fascinating stuff we have been speaking

961
00:44:09,440 --> 00:44:13,920
Speaker 1: with Matt shpa He is the CEO of United Wholesale Mortgage.

962
00:44:14,280 --> 00:44:17,919
Speaker 1: They are the country's largest wholesale lender and number two

963
00:44:17,960 --> 00:44:21,839
Speaker 1: overall mortgage lender. UM. I wish we could have done

964
00:44:21,840 --> 00:44:23,839
Speaker 1: this in person. I get the sense that you are

965
00:44:23,880 --> 00:44:28,880
Speaker 1: just a very animated, excited individual, and I get the

966
00:44:28,920 --> 00:44:32,319
Speaker 1: sense your enthusiasm is totally infectious, and I could see

967
00:44:32,320 --> 00:44:36,799
Speaker 1: why you've been so successful running the company. Well, thank you.

968
00:44:36,840 --> 00:44:38,799
Speaker 1: I really enjoyed being part of it. Appreciate you, and

969
00:44:38,920 --> 00:44:42,399
Speaker 1: uh hope to talk to you again soon. Absolutely, Thanks

970
00:44:42,400 --> 00:44:46,279
Speaker 1: so much, Matt. Thank you. Thanks to Matt SHPF for

971
00:44:46,360 --> 00:44:50,919
Speaker 1: being so generous with his time. If you enjoy this conversation, well,

972
00:44:51,040 --> 00:44:53,759
Speaker 1: be sure and check out any of the previous four

973
00:44:53,840 --> 00:44:59,359
Speaker 1: hundred discussions we've done over the past six years, seven years.

974
00:44:59,360 --> 00:45:03,439
Speaker 1: Oh my god, time time disappears. UM. You can find

975
00:45:03,480 --> 00:45:07,680
Speaker 1: those at iTunes, Spotify, Bloomberg dot com, wherever you listen

976
00:45:07,760 --> 00:45:11,839
Speaker 1: to your favorite podcasts. We love your comments, feedback and

977
00:45:12,000 --> 00:45:15,960
Speaker 1: suggestions right to us at M I B Podcast at

978
00:45:15,960 --> 00:45:19,680
Speaker 1: Bloomberg dot net. Give us a review over at Apple iTunes.

979
00:45:20,280 --> 00:45:23,959
Speaker 1: You can sign up for my daily reading list that's

980
00:45:23,960 --> 00:45:27,120
Speaker 1: at rid Halts dot com. Check out my weekly column

981
00:45:27,200 --> 00:45:30,640
Speaker 1: that's at Bloomberg dot com slash Opinion. Follow me on

982
00:45:30,680 --> 00:45:34,440
Speaker 1: Twitter at rit Halts. I would be remiss if I

983
00:45:34,480 --> 00:45:36,839
Speaker 1: did not thank the crack staff that helps put these

984
00:45:36,880 --> 00:45:42,800
Speaker 1: conversations together each week. Attika val Brunn is my project manager,

985
00:45:43,440 --> 00:45:47,200
Speaker 1: Paris Wald is my producer. Michael Batnick is my head

986
00:45:47,200 --> 00:45:51,560
Speaker 1: of research. I'm Barry Ridhults. You've been listening to Masters

987
00:45:51,560 --> 00:45:53,640
Speaker 1: in Business on Bloomberg Radio.