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Inside Real Estate
Interview With Bob Walters - President and COO of Quicken Loans
October 03, 2018 Inside Real Estate

Bob talks about the future of the market, brokers vs retail, and technology. 

Bob talks about the future of the market, brokers vs retail, and technology. 

Episode Transcript

Speaker 1:0:02Inside real estate all things real estate that brings you all the hottest topics and insights directly from those who might enjoy the site. You like that.

Speaker 2:0:17So it's good. One of the Spice Girls. Yeah it's crazy spice. I think she's crazy actually. What's up everyone. Fall Vasilakis got Salvatore who's mano.

Speaker 3:0:28Brad wise Gerber very special guest today. Mr. Bob Walters from Quicken Loans the president broke the Internet today broke the internet broke the internet took it down. So we were chided when you're trying to get out or try to get out of line. There's a bunch of people trying to get and watch us and we screwed it all out. Well I think it's your fault actually. Yeah I don't blame Zuckerberg it's also saw Bob obviously you come from Quicken Loans. You've been there for a lot. You've been there since 1997 so you've kind of been there from the very beginning really.

Speaker 4:1:00Yeah. You know it's interesting when I got so the company was founded in 1985 and founded with his brother and another gentleman. And so I got there I guess 12 years into it we were about 240 250 people when I got there. Now the family company 17000 people so it's been it's been an incredible journey coming that's crazy.

Speaker 3:1:18So just so the audience knows I was there in 2003 and I was like You know it's just you know quick it was just kind of getting rolling. People didn't know what an online mortgage was crazy like like nobody really was like doing a mortgage online like what like the Internet had just been born. Right.

Speaker 4:1:35It was kind of not so great because people like there's no chance no one is ever going to do alone online it's just not going to happen ever. No way. And then they'll certainly never do a purchase loan online that'll never happen ever. And so you know we were proud last year to become the largest lender in the country. And again it's all out of centralized centers in Cleveland and Detroit and in Phoenix. And then if you look at our purchase business now it just our purchase business we'd be the fifth largest lender in the country. So this really just shows how much things change people would have said. There's no way people are going to buy shoes on the Internet. It's just not going to happen. You've got Zappos and there's no way the largest retailer in the country is going to be online. Things change.

Speaker 3:2:24Just interesting. I'm not I'm not going to walk into a Best Buy anymore. When's the last time anybody walked in.

Speaker 2:2:28As of last week you know you walk in and you take a picture of the thing and you order it on. I get it cheaper and cheaper right. So yeah. So obviously quicken.

Speaker 3:2:40I mean really like changed the perception of how to do a mortgage and you as a company you guys have been really in the forefront of technology of growth of just doing things different. Right.

Speaker 5:2:52And a lot of that goes to your ism's and a lot of the things that you guys believe in as a company. So kudos to that obviously. So today what I really want to talk about three things you talked about the market. I want to talk about this whole broker hotel that whole thing but we won't get too far into it and then I also want to talk to you about technology. Yeah I think those are three things that you guys are really going into right now so let's talk about the market. Obviously you've been through a lot Eisel listen you usually just audience as I work at Quicken and I will leave voice messages for the whole team and tell them what's going on in the market was like a market update was awesome. I really taught me a lot about you know 2008 happened you kind of lived through that it was like very it was an anomaly kind of situation right. And then we've come out of that since then. So right now it's kind of a weird place because we've been on fire for the last 10 years. Right. What do you see happening going forward from here.

Speaker 4:3:48You know it's fascinating. It's the 10 year anniversary now. Yeah I think it was August when Lehman Brothers collapsed and I remember that anybody in our industry remembers that and I came up through the capital markets side. And so during that period of time watching the financial institutions that we all take and know we believe were solid rocks watching them starting to crumble. What's fascinating I was just. A lot of the news reports last week or last month talked about that 10 year anniversary.

Speaker 6:4:18I remembered where I was and I remember you know all these different things happening in legitimately thinking that that you know we could we could lose it all every mortgage company relies on warehouse lines of credit and where else lines of credit comes from banks and banks we're in deep trouble and it was just a fascinating scary difficult time. But to your point what I think is interesting is how what's happened since. Yeah and I think there's a lesson there and we'll get to the markets in a second but for sure the lesson is actually sometimes everybody nobody wants really really bad. Tough times. Nobody wants that but keep in mind when all heck is breaking loose when terrible things that there is opportunity everywhere. And so yes a lot of a lot of mortgage companies a lot of institutions got crushed. But coming out of it there were a bunch of companies that really took advantage and really did well.

Speaker 6:5:14And there was tons of opportunity for the companies that were run well and the companies that took advantage of both technology and then had the right cultural makeup to go forward and I look at Quicken Loans in the last 10 years have been to some of our best 10 years. We didn't want to have to go through 2008. Nobody did. Coming out of it was an extraordinary opportunity so I always like the times you know things are getting a little tougher right now certainly nothing like they were 10 years ago. And so you know people in our industry are really struggling fighting for their businesses in many cases and it's tough. But I think they should keep in mind like this is a tough time but this is where this is where careers are made. This is where businesses are made in the tough times often more so than in the good times. So I think that that that's just one reflection on that as far as where we're going.

Speaker 6:6:06You know it's pretty clear that that the economy is doing doing really well. I mean I saw something yesterday one of the Fed governors said this is like the Goldilocks kind of times. Interest rates are pretty low inflation is pretty low unemployment is low. Oftentimes you don't see that you see like you know when unemployment is really low you see inflation kicking up which pushes rates up. But but rates rates are ticking up the Fed is taking short term rates higher. They're going to do it a couple times maybe two or three times next year take rates higher short term rates higher. The question is What does that do to longer term rates that we care about our industry. And you know anybody in our industry knows that it's not a one to one when the Fed pushes short term rates up a quarter that doesn't necessarily push long term rates up a quarter.

Speaker 6:6:53In fact right now we have a Superflat know curve. We don't want to go into nerd ville here but what meaning short term rates and long term rates are about the same. Right. Usually when you get a really flat yield curve or even an inverted meaning longer term rates start to get lower than the short term rates. That's basically the market predicting potentially a recession. I'm not so sure that that's the case. But this expansion is now 10 years old and that's pretty long that's a long so. So will we see a recession. I don't think we'll see a recession in the next couple years and I think interest rates stay generally low. But here we were probably what the low fives high for 30 years. If you asked me to bet in 2019 I think we stay in a half point range from where we are now. I don't think we see him rocketing above 6 percent. And I also don't think that we're going to see him fall much below four and a half percent. It's a point in a half range but I think you stay in that five to five and three quarter kind of a kind of an area that would be my prediction.

Speaker 3:7:58Do you think the Fed policy you know they've been buying bonds for so long. Right. And they've been really stimulating the economy kind of protecting it. Now there's that safety that's gone up. Right. So if you're in the market now you know if something happens there's no more like we're going to help you out. Right. And the Fed kind of said that with their last minutes right they're not going to accommodative anymore. Right. So how does that play in everything.

Speaker 6:8:22You know basically accommodate. I like the. Now I like analogies but my analogy on this is accommodative means that they're pushing on the gas pedal instead of but right now they're if they're if they're like tightening they're pushing on the brake if they're accommodative then they're pushing on the gas put it right now like the feet are off coal can break and the gas posted there saying OK this economy is doing its thing good with that we're going to stay with it. But over the last ten years they like had it they had the accelerate here Barrie. I think they were pushing it through the floorboards. I mean not only were they take they took short rates short term rates down to Darner zero. Right. And they started buying mortgage backed securities. Trillions of dollars of it. And so that was very limited. Right now they're backed off. They're basically saying this economy is fine on its own. So we're not going to we're not going to push.

Speaker 7:9:11I think to the consumer. They have to realize you know how spoiled they were the past 10 years basically you're off. You know it's it comes down to probably redefining what a low rate is. So you know a record low is different than still a low rate 5 percent.

Speaker 3:9:25What do you do. Chill out. I mean it's really not that great. It's not that bad. So yeah it's interesting I really like. It's an interesting time again it's been like through these last 10 years. You know a lot of different things have happened that have you know in the past you haven't seen the Fed be so active in the market. I mean they really basically propped it up and saved it on some level.

Speaker 7:9:48Right. Well in this housing market's been rebuilt basically rock solid on solid bonds.

Speaker 6:9:54Well that's true. So. So every crisis is different. That's the thing. But he says the next crisis is going to be it's always a little bit different. And you know the one in the big crash in the Great Depression in the late 1920s was largely driven by a stock market crash. You know a number of other things the one ten years ago was a housing bubble you just had way too much speculation going on the housing market and housing market is such a big part of our country's economy that when that got over inflated then started to come in. It just took things with it. So it started taking down lenders and bondholders and so that's that's what took it down the next crash we'll have one. There'll be another one I'm sure we don't know when but it will be something else and they're all they all have something in common. And that generally is is that certain things get overheated whether it's a labor market whether it's a housing market whether it's a stock market they just get overheated they become too speculative. There's too much money and then when they start to crumble those losses then start to spread. And that's what always hits them. So what would you speculate is going to be the cause of the next one.

Speaker 2:11:04I agree with you that it is going to sound loans. I mean a lot of markets.

Speaker 8:11:09You know a lot of things are happening in the economy. What do you think. If you're speculating like a hole into it but what would what's going to drive the next one you know.

Speaker 6:11:17Right. I don't see I don't see a lot of asset bubbles at the point I mean you can look regionally and you can say Southern California or you can see some and you're always going to be some regional bubbles regional bubbles don't take economies down it's generally national but those that do that on a national basis while housing prices have increased I don't see any stuff that's just bananas like we saw in the past. Stock market while pricey is not something where like that's. I mean you know price earnings ratios are on the high side but they're not just through the roof where you're like That's just craziness so I don't see I don't see that it's the next one. You know it might be some kind of an external event God or God forbid a war or some kind of a trade embargo like if we got into a trade war with China and other countries if that fully broke out that could trigger a recession. Something like that. Those are the kinds of things that might do that.

Speaker 3:12:09I think it's crypto crypto currencies and they're just like oh I lost a shit ton of money.

Speaker 2:12:17Obviously it's us. Well obviously I mean there's a lot of things happen in the market.

Speaker 3:12:21I do want to talk a little bit. I want the audience to understand this there's there's two kinds of parts of the business right. You've got retail which is you know more consumer direct with it you guys do a lot of and you've got guys like us who's a broker who have different options from from investors or partners that we used to do mortgages for a very long time and quicken was very just retail driven.

Speaker 5:12:43Right. And I think not recently but it's been some time now. But you guys have recently in your history started doing wholesale. So I'm curious to you and I know you're kind of getting a lot of that. How is that going. Where is that going in being that the perception of quick I mean retail for so long can both those coexist within the same house.

Speaker 3:13:07That makes sense.

Speaker 6:13:08Yeah I think absolutely. I think really that there's retail meaning the Purt the company is doing business directly with the consumer. So you guys are retail right and Enzo and then there is what are called correspondant being companies that are buying closed lung's loans that have closed. Right. That's the way I see the world. So when we think about what we're doing through Quicken Loans Mortgage Services Kule amass it's really an extension the way it is. You've got tens of thousands of mortgage brokers small business people and you know we've been talking about the economy in more than 50 percent of the employee employers in our country have 50 employees are left unless that is the bedrock of our economy a small business is just flat out is. And so everybody talks about the General Electric's and the General Motors and stuff like that and of course important but the small business that's where innovation comes from.

Speaker 6:14:06And that's what really drives things and even in our industry that the mortgage brokers are a huge driver of what's happening in our industry. They're the ones with the relationships on the street. They're the ones who understand you know the realtors really well there's lots of folks so the way I see it is what have we built to Quicken Loans. We've built a lot of things. We built a lot of technology and we continue to build technology and innovate because innovation is what drives everything innovation is what drives economies in a deviation is what drives social change. Innovation is what drives things and so we have more than 2000 people for example in our technology group. And so we're building that technology by the way and then we've also built a huge amount of process. And so how do we how do we take advantage of that in a lot of different ways and so of course we've got a retail platform.

Speaker 6:14:57But to the to the to the extent that we can extend that to the broker community and also bring in great high quality loans and help the broker community. It's a win win and that's really how we think about that and what we get excited about when I talk to a lot of brokers. They've got the relationships. That's not their issue. They've got their cultures in their teens they know their communities what they don't have is technology right. They don't have the money. They don't have the expertise to hire lots and lots of people and technology and so they need to work with companies that can help provide that technology to let them do what they do best. You know I always say around our office. Let's build process systems such that let computers do what computers do well so humans can do what humans do well. And usually I'm referring to you know if you've got a human sitting there taking a piece of paper and looking at it and keying in information all day long that's not what humans do do really well. A computer could do that better. Let the human do things like computers What are computers good at they're good at automation they're good at repetitive things what are human computers.

Speaker 9:16:14Suck it computers suck at building relationships. They suck at influencing and persuading other human beings they suck at empathy. They're not good at those kinds of the humans are really good at those kinds of things some got you. But in our business the ones that are good at it are the ones who thrive. The ones who build businesses around that thrive.

Speaker 10:16:34But but if they then have to pay lots and lots of people to do all this automation and if they're if if they rely on their clients to do a lot of work like OK OK send me this document and that document and this document and that document come here and do this and answer this phone call versus a much more automated process. That's the key. So very long answer. That is what we think our value add and we've more than doubled this year in that and that's exciting. And so part of it is being very intentional about growing but a lot of it is the value proposition we're providing.

Speaker 3:17:07So to that point I know I don't Quicken in another culture. Generally you guys don't do things half assed right. So is your goal on the on the wholesale side to be the number one wholesale internet in the country. Is that where you're going.

Speaker 9:17:24You know we don't sit there and obsess about that. But but but you're right. And I think this is for any company that is is well run that has a great culture that believes in itself. That's you know it's not like well we have a lot of our ism's is numbers and money follow they do not lead. And what that means is if you're like my goal is to make a ton of money that is my number one goal is to make a ton of money those people rarely do. Right. But if it's like you think about it Jeff Bezos for example I bet his goal in 1997 or whenever he started Amazon was not like I want to be the richest guy in the world. That is what it's all about. He was just like I wanna be. It started with I want to be the number one online bookseller.

Speaker 9:18:08I want to change the way people buy books and then I want to change the way people buy this. And it's been we talked about innovation. I want to change this I want to make this better one click. Amazon Prime all these kinds of things and then you wake up one day you're like oh crap all that worked and now not oh crap. Oh great. Now I'm the richest guy in the world. It followed it didn't lead to the same thing for us. It is constant and we don't sit there and go what we need to be number one. Well we need to make the most money it is can we innovate can we make things that consumers are delighted by the brokers are delighted by that anybody. And it just makes it better and better. And if you do those things the money follows.

Speaker 8:18:44Well we talked about something that as well we don't call it innovation or. How can we innovate this or that. We always talk about how do we add value. How do we add value to the buyers out there. How do you get value to the real estate agents. How do we add value to everything we touch. Because it's not financially driven. It's more we know if we add value to whoever we talk with whatever issues we have we're going to be successful.

Speaker 7:19:05So it's kind of the same thing which is kind of where you end up with just a scorecard right. Right exactly right. You know you're either you're either number one or you're not. And that's only indicative of what you do.

Speaker 9:19:15And you know the beauty the beauty of our system capitalism has lots of benefits and there's but the beauty of capitalism is that if you provide value then those benefits come. But if you don't you get killed. And so what's beautiful about that is that means that we're all spending our time to get better and better and better. If you don't you're going to get killed if you're in a market where there's no competition you can be really bad and continue to get along with the government. So but but you see it. And so I think brokers are in the best spot when they have a lot of folks competing for their business because they have those people competing for your business have to keep getting better. They have to keep pushing each other and they have to provide better technology and better marketing and better pricing and better products because if they don't they get that as the benefit.

Speaker 9:20:10So I came up through the capital markets side of the house. And so I was always on the other side of. We were up until 10 years ago. You know we would sell a lot of our services and so I was very. That was my role through either through mostly correspondent relationships and I always wanted liquidity. I wanted liquidity and so that was the benefit I could have. I would have never won a single source myself. So it was this balance. Like I want liquidity but I also want to work with a couple of really high powered competitive firms that listen to me and kept giving me value and kept each other honest. But I didn't like I didn't want to have 30. That was a waste of time. I always wanted to be relevant to the companies that I was selling to because they would listen to me if I wasn't relevant relevant. They wouldn't. I've always been mystified when people have 32 partners of 30 to rate sheets that just didn't feel like you need a relatively small number so you can build process and inconsistency. But you also need a tough competition to keep people on.

Speaker 3:21:11Well you get diluted at some point. That's right. It's totally diluted. So I mean it's so one thing that's happening in our businesses there is this like a rift between the brokers and all this stuff and there's a lot of stuff that's happening out there the narrative right now is that it quickens the bad guy almost right. And why would you work with Quicken. How how are you changing that perception. You know that's it or is there any truth to it.

Speaker 10:21:34Well you're right it is a narrative and it's a narrative that you know certain folks are putting forward. It's it's interesting again when I was on the market side and people came in whether it was a mortgage insurance company or it was a lender or whomever. I was always the people that came in and talked about the value they would provide to listen to me about what I was trying to accomplish. You know the difference between listening and listening listening is like I'm waiting for my time to talk and listening is OK so a second ago you said this that this is important to you guys. Tell me a little bit more about I always thought if they asked me more questions than I asked them I wanted to work with them because they were curious about what I was doing they were interested and they were really trying to provide value if they asked a lot of questions and if they were synthesizing what I was saying and trying to help me find value I really wanted to work with them.

Speaker 10:22:28I love the companies that were fighting value. The companies are the people that came in that I was suspicious about wanting to bad mouth they want to bad mouth the competition. And I always felt if you're spending your time badmouthing others you're either hiding what you don't have or your ego is really thin and you know that's just how you did that. So a lot of that narrative of big bad whatever is just that it's to take the eye off the ball of what's really important to brokers. Yeah I mean we have a we have a really large marketing budget and we do that so it's an easy scapegoat. But the reality is is that we'd be right. I mean the narrative is oh well we're just doing this to steal your clients. That's just the silliest thing ever because if we did that we'd be out of business in five minutes. And we just know that's not true. We know that you know. You know it's just it's it's a little maddening but we just keep our nose to the grindstone really.

Speaker 11:23:28We were talking before we started recording the the the brokers that are doing really really well. The brokers that are there like I don't care I don't care.

Speaker 9:23:39Let's talk about my business. Let's talk about how I'm going to talk about some of the challenges I'm having let's talk about penetrating the real estate market or the realtors talk about how I can get into the builder community. Let's talk about some of the technology that I'm working on or strategy or whatever that kind of stuff. The ones that are struggling. They like those scapegoats like yeah. It's that that's why I'm not doing well it's this. That's why I'm so it's kind of a convenient excuse for people that are struggling.

Speaker 7:24:05Well I think a huge thing and a mindset you should have as a businessperson or a broker is you know how to do more business. And yes if you're doing a good job you can retain what you have but you can only do that by reaching out. You can't expect anyone because there's so many ads above and beyond what say you know Quicken Loans or whoever calling that client after they close. I mean they could walk into their bank they can turn on the TV they can see the billboard that can log in online. You have to stay in front of them or they're going to work with someone else regardless and if you don't do that you're not doing your job as a broker in my opinion.

Speaker 3:24:37So you're talking about. So you're what we're talking about it's like urban Tallaght the perception in the industry is that from a broker standpoint the quick gain once they once used are wholesale they go through and quicken closes the deal the perception is Quicken now start marketing aggressively to that client and now take that cly for themselves basically taking it from a company like us which is which is obviously what you're saying is not the case right but that is the mentality. What Saúl saying is which I think is true and poignant is it doesn't matter somebody is marketing to them. So we've got to see in front of him regardless. We got to play about it.

Speaker 7:25:12If a client doesn't call you and they receive a piece of marketing in the mail which mind you they get all the time from different people. Right. I get it all the time. You don't deserve that. You should've played better. Yeah.

Speaker 12:25:22You know the play about it we tell we're very intentional.

Speaker 11:25:26If if a broker we brokers loan if they're working with us we are not campaigning to those clients we wall that off we do not outbound go after those for retention.

Speaker 13:25:40Now if there's a if the client clicks on the dancing bear through one of the lead buy things and nine nine different companies buy the lead and we're one of those or if the. Yeah of course that's the case. But this is here's the other reality where the narrative is flawed is that there are certain companies because they don't have retail presence that you're safe. That's a. I mean I know that most No that's silly. But some some don't. The reality is the brokers are I'm sorry the lenders that don't have that retail presence. Most of them are selling their service. So they may hold it for a year for tax purposes or whatever but then they sell it. And we know that most refinances are most next purchases are well beyond a year. And they sell it to very large servicing buyers and those very large servicing buyers pay an awful lot of money.

Speaker 13:26:31A lot of money for that servicing. And so the value that they get when they pay that money is twofold. One they're getting a stream of cash. They expect that loan will stick around for a while and they get a stream of servicing income. But the second is they know some portion of those will either refinance or get their next home with them because the companies that these these these large wholesale lenders sell their servicing to have big retail retention arms. And so that's what's happening. So if you think like oh well I'm not selling it. I'm not brokering through a company as a retail arm I'm safe. That's just crazy. That's just it's just really flawed thinking and a misunderstanding of how things really really work. But the narrative out there is like take your eye off the ball. No no no. You're safe. You're not.

Speaker 7:27:18Well I think it's still kind of goes back to it doesn't really matter even if it is true. Right. Because ultimately if you want to be a successful broker you have to stay on top of your client pressure and that's really what it comes down to in the broker community is like you need to work with the people who can build your business the best it's on you to retain it.

Speaker 3:27:37Sal is very big like you know sometimes having it in the smell that I'm like this person is like Dude shut up. It's what we do that matters. It doesn't matter what anybody else does. So that's kind of his mentor. He kind of kicks me in the ass sometimes. I mean if you lose alone you lost it. Yeah and move on.

Speaker 13:27:53Nine times out of ten because you weren't good at them. You know one of the things I say around the office sometimes is whether it's your fault or not it's your fault. And what I mean by that is what I mean by that is because I feel that that's a powerful statement is when someone says you know there's two different kinds of people. One is like why did you screw this up in somebody. There's two people one person is like no I didn't screw it up. Hold on a second. I've saved every e-mail that I've ever sent in my life and I'm going to come back. I'm going to come back and I'm and approved you. No no no I'm right. Hold on. I'm the show here I got this to approve this. I got this. There's another person who's like I don't know if I did or not doesn't matter.

Speaker 13:28:30You know what let's say it's my fault. I own it. I'm going to get better. Let's move. And I respect the power that comes with the ownership of problems because that's a strong ego that's a person who's like if I've lost something if I've lost a client if I've lost an opportunity it's not someone else's fault it's my fault. Those are powerful people because they're like I'm going and I'll get better I'm going to do something they're in control of their lives with the other people are victims. And so always look for people who aren't interested in spending lots and lots of time blaming others. You know there are a few other isms. One is we are the they and that means you know they people well they said and they did. And they who is they we we screwed it up. We accomplished this. We did better we failed. That's power. They that just means I'm a victim and I'm not in control and I really appreciate and want to work with people that are in control. If the client went somewhere else. It's not I'm not going to yell and scream but the other thing why didn't I stay in front of. Why wasn't I relevant. What's wrong with my marketing. That was I not as persistent about staying in front of them as something about my programs can I work on my marketing whatever the case is. Those are people's acts.

Speaker 7:29:41And you can't win if you don't lose. You know you've got to learn from it and don't lose. It's kind of the scorecard right. Did you get enough value. That's right and if you didn't you probably lost. That's right. You had to get better.

Speaker 3:29:52OK. Last question on this topic that will move on to technology. I'm curious in your opinion. Obviously you've got so like I'm a consumer right. So in your opinion when is it correct to let's say go to a quick and or go to a broker. Is there a difference or is there something that brokers do that are better or do you see what I mean. So I'm a consumer now. Okay I can go to Paul.

Speaker 5:30:15I can still go through Quicken but why would I go through Paul as opposed to going through just directly to quicken because when I was on the other side of it because I was at Quicken I spent a lot of my career selling kind of against the broker a little bit right back then it was just like all the know and there was always a narrative that I could spend there. Now I'm on this side and you've got to have to spin the narrative the other way because it's kind of like Well don't go to wild don't go to Bank of America don't do this don't do that because we can do X right. Being that now you can have both factions in your house in your opinion which you know what is better for that that makes sense from a consumer's perspective.

Speaker 10:30:50I think it comes down to really if I'm a consumer there's no advantage. 1 like 1 1 division or another it comes down to the individual and it comes down to the experience do I trust you. Yeah that's a big place to start. Do you have the products and the pricing that is in my best interest. That's important. And can you make my experience refinancing or buying a home is easy and convenient as possible. Do I trust you. Do you have the products and pricing and my best interest and can you make this a good experience. And if the answer to those three things is yes it doesn't matter if you're a big company or if you're a small company if you've got a cool logo if you've got a terrible logo it doesn't matter. The rest of it is noise. It really comes down to the tip of the spear and the tip of the spear is all of us who are speaking to the consumer and from a consumer perspective you can have a terrible experience with a big lender. You can have a terrible experience with the broker gave a terrible experience with a bank or you could have a fantastic experience with a bank broker or a big loan.

Speaker 13:31:54It doesn't it doesn't matter doesn't. Down to the individual. Which is why though. You know I think we're talking there's a lot of brokers listening today is how do I do those three things. So number one how do they trust me that's largely on all of us. That's largely on the broker that's our personal integrity that's the way we run our businesses. That's the way that we portray our brand in the marketplace. So that's on us the second thing is products and pricing. I think that there's a lot of it's pretty generic in the world. But again that's where competition comes in. If you have no competition I learned this when I was on the capital market side if I would just sell to x y x y z all the time over time X Y Z pricing would get squishy and it's not because they're bad guys they're capitalists they're capitalists. They're taking advantage of that.

Speaker 10:32:43So everyone needs to be their own advocate for their pricing and for products. And if you if you just take if you're just selling to one entity it's going to you're not making sure that it's a great deal you're not going to get the best opportunity nor will your client. So competition comes in and that last piece though this is where I really think this is where I think the differentiation happens. This is where I think from a broker's perspective as to what they can provide their clients comes into play and that is the experience the client experience. And this isn't like you know as you're or you're pastries tasty and you call them your hair in a nice way. This is what kind of technology do you have for the for your clients. What does your Web site look like. How easy do you have document upload or do you have to.

Speaker 10:33:31Do they have to bring all their documents to you. Can you get alerts in the middle of the night or do you have to wait for some 47 phone call of the day. How easy can you make it what kind of technology what kind of integration what kind of process do you have. This is where working with lenders that are that are on the advanced side of technology and process really can change it for brokers. And when you change when you change that experience for the broker what they can provide that's what they're providing their clients it's the last thing I say. You will see. There will be brokers over the next five years that will not do well that will die if they don't adopt the technology to work with people. People are no longer going to accept just like yes there's a few people that go into hardware stores somewhere like to look around and stuff but the world is changing very very quickly. And so if people aren't changing and adapting to technology adapting to what people want as far as how they get mortgages it's going to get increasingly difficult for them to operate in that world. And so that's why they have to continue evolve and that's why they have to plug in and work with companies that will help them.

Speaker 3:34:39So. Q All amassed in your opinion a goal of theirs is to provide good technology for the brokerage community. That is one of your initiatives.

Speaker 12:34:50It's the top initiative because again. Otherwise anybody can offer a rate sheet. All right anybody. We could all start a mortgage company tomorrow and kick out rates. That doesn't take any thinking that doesn't take any skill that doesn't take any any investment. It really comes down to technology process. Those are two things that are going to make the difference.

Speaker 7:35:14And I think that this market right now is a good test subject to or at least to transition into that next era because refinances are way down. Right. So lenders will or brokers I should say we'll adjust our margin to be competitive no matter what the rate is as long as they're working with the right partner who can get that loan done provide a good experience or get referrals.

Speaker 13:35:37That's right. If you have an unbelievable experience that's all a matter as a client or a realtor if you're like that was flawless and all the technology let me know where I was the whole time I had clear. That's really what people want they want transparency and certainty. That's what they want I want to know what's going on and I want to feel good that I believe is going to happen happens. And if those two things happen I am good and prices then down the line. I still need a good price but it doesn't just come out. That's right.

Speaker 7:36:04You don't need to necessarily be the boss. And I think that good brokers understand that as well that it's not about I don't care about making the most money on one loan. I want to do a lot of loans. That's right.

Speaker 8:36:14I call it being scrappy. So like to your point I think a consumer can get have a great experience and have a better avenue for getting a mortgage through a big bank through retail direct lender through a broker. It's all but it's all about the person right. It's like it's her walk straight into a bank sits out in front of a guy that was like eating a sandwich and watching ESPN on his computer. There's a higher likelihood that it's going to be a great experience because you just put it in their lap right. They don't really care where if you go online fill out a form and you get thirty five phone calls in five minutes. Those are the scrappy people that are going to fight for your business. They give a fuck about what you're doing and are going to fight for you right to give you a good experience.

Speaker 3:36:55So that's that's I think where you want to go. That being said I do think things are changing a little bit. People don't want 35 phone calls anymore. Right. You know but that's for their lineage though. Yeah 35. It's a lot. It's a lot. Well let's move on to technology because we're running out of time and I think this is poignant. Obviously if Quicken you guys through the years have been on the forefront of technology always like it even when I was there in 2003 through 2008. It was like it was something the technology was always on the forefront. You guys came out with rocket mortgage the digital experience. To be fair I did on the consumer side. It's probably a lot more digital. But the reality is there's still a lot of humans on the back I'll do a lot of manual stuff to get that deal done. When do you see a true digital solution to the mortgage where like we talked about before you're on your cell phone you push a couple of buttons. You get in approval of you. It still hasn't gotten there in my opinion.

Speaker 12:37:54No you know what's interesting is far. Well let me take a step back today at Quicken Loans bout. It's a small percentage but it's growing. It's about 2 to 3 percent of our refinance loans go from what we call we call set up where basically the client is provided us the most information that we need to what we call final sign off meaning we've gotten everything we need from an underwriting perspective we're done about 2 to 3 percent of our refinances do that in less than 48 hours.

Speaker 10:38:31So they're getting property inspection waivers you know of course but we're you know the client is doing a document upload we're running an advanced income. So incomes being calculated it does an underwriter doesn't have to do that that's being calculated. You're doing the same day title. All these things are happening very very quickly. You know it's going through the numbers so you don't have to get a verification of employment you have to call the employer. And if if the client you know gave the we got the duck page and pulled that in. It's happening that fast. It's a small percentage but I bring that up because it's like a window into the future if you can do it for a small percentage then you can continue to grow that and you continue to knock down the barriers that prevent others from closing that fast.

Speaker 13:39:18So we're a ways away from most loans closing like that. But every day the barriers of what takes so long in our industry and why there's so much human involvement start to fall down. The one part though that I strongly believe will remain will be the relationship. I you know there are people that are comfortable with doing everything online but there's an awful lot of people that want to talk to somebody you want to explore options and want to make sure that you know this is not an insignificant transaction. So I think that from that perspective people who have that relevant relationship with clients with realtors are going to you know they're going to do well but they're only going to do well. It's not like a broken record but it's just true they're only going to do well if they can plug into the technology as well. Because if I trust you. But the process is a dumpster fire. And it's like you know I got to bring stuff in and it's crazy town in the 40s like then I'm going to be like I love you. But I got to go with a place that's going to be able to do things and take advantage of the modern technology to take advantage of the things that I heard my uncle Louis say and it was so great. So that's why I think that is really important.

Speaker 7:40:25And I think also realizing that a smooth loan process right now that might say hey loan closed in 21 days right. No no issues came in that could be the dumpster fire of the future.

Speaker 2:40:38It took 21 hours ago. That's our average.

Speaker 7:40:41It's like like hey I mean it could be we could be in a situation in the future where it's like you plug in an address and it's like thumbs up. Everything's all pre underwritten and everything somehow you know Fannie Mae accepted some AVMA in lieu of appraisals and now it's all over. You're approved but not pre-approved to your point Bob.

Speaker 3:41:02I mean I truly see it like this. I see that technology is like the icing on the cake right. It has to enhance the relationship right. And if you don't adopt that to your point you're going to become irrelevant pretty quickly. All right. The question to me is so if I if I'm a broker today right and we rely really on our partners to provide because we don't have the resources to build an app to do this and do all these other things. At what point potentially could it become where there's a little doomsday but I don't think this is the case where you know we're being provided all this stuff and it's not really in-house that you'll always be taken away from us. Right so that's the fear too as a broker. It's like if our partner devolves something that's so over-the-top out of this world why don't they just keep all that business instead of sharing it with us.

Speaker 12:41:51It's a great question. I can't you know I can't. You know what a Luddite is.

Speaker 2:41:57Enlighten us. I just realized I just don't myself that door.

Speaker 12:42:02But a Luddite. These people get this right. So if I don't get it perfectly right be nice to me. But I think they were a group of people. Think they lived in England hundreds 200 years ago and they mostly made up like they made wool fabric. They made clothes much of England Yeah they did it but they did it with the handheld machine you know they did the looms by hand and all that kind of stuff. And then all of a sudden came along the mechanized loop that came along.

Speaker 13:42:32And so when they brought that to their town the Luddites they were that was the type that was the name of these people. They went into these factories and they burned to the ground. They're like we're going to stop all this this mechanization we're going to stop all this innovation we're going to burn it that's our you know that's our solution. Of course you can't stop it right. You can't stop it and. But what's interesting something interesting happened. You would think like Oh well all these people were completely out of a job in the short run. I'm sure some did because the the mechanized loon could do it much faster than they could but something really interesting happened. When the price of clothing started to fall because the mechanise Lou made it easier to make more clothing people bought more clothing instead of people just having two pairs of pants and two shirts.

Speaker 13:43:20That was all they could afford because that was like a month's wages. I can now afford more. And then all of a sudden the people who used to do the loom by hand work the machine and they had jobs. So yes I'm not saying that the world is perfect when innovation comes. We saw that here in Detroit when when when robotics and that kind of thing it really was difficult for a lot of workers but the prices of cars fell. And then the you know the value of cars went higher. So I say all that because that's our industry. The price is going to fall. The ease of getting a mortgage is going to change. There are undoubtedly going to be some losers. It's going to be you know I think you know if like some of the rolls that are pretty pretty wrote in some of those roles are going to go away but there's going to be a lot of winners too.

Speaker 13:44:04And I really think high functioning really talented loan officers will benefit. Why. Because I could do more now. I'm not screwing around in the pipeline all the time I'm not trying to figure out what stuff's going on. It's happening faster. Things are being uploaded in an automated fashion. Income is being calculated. I don't have to sit there and hold on with an underwriter and wait for somebody else's decision. It's happening. I'm in control. Can you imagine just dream for a second. What if I mean you go how long does it take finance a car. Same day same day. And by the way you could roll the collateralize wheels on it it can go away at 70 miles an hour. But let's just say that we can get to a place where from from application to clothes that can happen in a couple days and I know we get trade these days and let's just say it could happen a couple of days. So we would need less people in our industry and that's a bummer. But on the other hand if I'm a high powered loan officer who has a lot of relevance wouldn't I just crush it go just crush it. Yeah. And that's the part that I think starts to get exciting is how you view the world. You're not going to stop it. You're not going to stop technology can you instead of it being a being a horse that runs you over can you ride that.

Speaker 8:45:14The officers that swim in their pipeline and want to know everything about the process and really just delve into the details they're going to go live. So it's the people that are front and focus to create.

Speaker 13:45:23I call those lone Sherpas. And so look lone Sherpas have had a lot of value over the years because it's a hard processing process where it's a hard confusing process so a big value of loan officers to clients was going to be your lone Sherpa I'm going to walk you through this this hard confusing process and get to the other end. But as the process gets easier and easier and easier the value of being a lone Sherpa falls. But the value of being an influencer and a persuader and being relevant in your marketplace and being a rainmaker goes up. Those people are going to kill you.

Speaker 7:45:55You have to be the Sherpa that opens the heated gondola top and right.

Speaker 2:46:00I mean Bob we've got to wrap this up.

Speaker 3:46:03If you saw if you had one message of the broker community what you all iness doing and kind of change you know change the narrative a little bit across the board obviously for the 4000 people that are listening might hear it. I have to message Yeah yeah.

Speaker 9:46:18Number one messages is thank you. I can't tell you how impressed I am when I talked to you know you talk about being scrappy. I love you know our company we're big now but we started out. Dan started this company. He and his brother out of the back of their car. That was scrappy. And so that's the that's at the root of who we are as a company is that scrappiness that entrepreneurial ism. I get energized talking to brokers around this country because every month they start at zero and there's a there is something so respectable and honorable about that.

Speaker 10:46:55There's no like well you Mike my Cecco cash. They started 0 and they have to they have to scrap it out and fight it out every single month. They have to innovate they have to know their market they have to get better. And I draw from that. And so we don't take that for granted and I think most most lenders don't either. And we appreciate that and we honor that. Second thing no I think is is that Kule the mass is growing. We doubled more than doubled were up 150 percent year over year. We will do the same thing next year. We are we are coming after it in a big way. We love this market. And but we're only going to be as good as the value we can provide. And so that's our job every day is to kick butt and provide things to the broker community that they need that differentiates them in the marketplace.

Speaker 8:47:45For other brokers there for the last question I know but I guess so other workers that are listening that are maybe intrigued a little bit about finding out more about what you guys are offering and what you can offer them how can they find out how can they get a hold or get more information.

Speaker 12:47:58Yeah I mean gosh they can start with email me Bob Welches the Quicken Loans dot com. I'll get it to the right people. But hopefully they know an account executive in their area but that's just give us a call. E-mail me. Let's go.

Speaker 3:48:15All right Guy so that's our show. Thank you all for listening. Find us on the podcast right or wherever. Like we're everywhere right now. We have a Web site.

Speaker 8:48:25I wonder can you ask Alexa to find out.

Speaker 2:48:27Do what you can get someone to get a mortgage now.

Speaker 3:48:32So go to iare podcasts dot com we'll be on there you go to our Facebook page. We'll be all over the place to just get you good. Thank you for helping us today. Great. Thanks. Yeah. So Sal you look good. And you think you get a haircut and you've been wanting to get a haircut for like like weeks. Yes I have. Bob thank you so much for doing the show.

Speaker 5:48:52We really appreciate you guys thanks for coming in. You guys have a great day.

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