Episode 5: Rent vs Own: The Cold Hard Truth

This week on No Surrender, Greg Sher, Erin Dee, and Coby Hakalir tackle one of the biggest questions in housing today:

Does it actually make more sense to rent instead of buy right now?

From affordability pressures and rising insurance costs to declining values in certain markets, the crew debates whether the traditional “buy at all costs” mindset still holds true in today’s economy.

They also dive into:

•  Whether loan officers should advise caution to buyers 
•  The future of home affordability 
•  AI-driven mortgage fraud concerns 
•  Growing risks in the non-QM market 
•  Rising rates, inflation, and global conflict impacts 
•  Housing policy fixes that could actually move the needle 

One of the most heated — and honest — No Surrender episodes yet.

Transcript

SPEAKER_03 0:39

Boom. You love that. That never gets old.

SPEAKER_01 0:43

It's great.

SPEAKER_03 0:45

It is great. Good to see you two. My friends. We were just together in New York City for the secondary conference. We attended our first Yankees game together. Everybody was looking for Aaron's autograph, wondering what the heck she was thinking joining two guys like us. But she was fierce in her defense. Thank you very much.

SPEAKER_01 1:06

I've never made good decisions when it comes to men. So, you know, it just seems about right.

SPEAKER_03 1:10

You know what? Uh fortunately I have over the years. I'm I'm elated to share with you. Kobe, uh, were you aware that the two fingers were behind your head?

SPEAKER_05 1:19

Uh, you know, I sense that was going on. I wasn't sure. Um, you know, I just kind of let it happen.

SPEAKER_03 1:25

Good times. That was a good time. Appreciate the invite to that. Really appreciate uh my utilities hosting us. That was very nice of them.

SPEAKER_01 1:35

Yes.

SPEAKER_03 1:36

And I'm glad to see Aaron is in the center today because last week this is what she looked like. Uh her chair was like had like a brain of its own. It was like moving. It did not want to be on the camera.

SPEAKER_01 1:50

I had some coaching, I had some producer coaching this week, so thank thankful for that.

SPEAKER_05 1:56

We're happy to see, we're happy to see you stabilized. Yeah, we have a lot of new artwork behind her, too.

SPEAKER_01 2:02

New artwork. Beastie boy is my favorite.

SPEAKER_03 2:05

I like that. You know, Kobe, we will have known we made it when there's a picture of the three of us on that wall.

unknown 2:11

Right?

SPEAKER_03 2:12

That's true. That's true. We're gonna start things off here. We have a lot to cover today. Uh, we're gonna talk about uh Mr. Barney Frank. And of course, he was the co-author of Dodd Frank, 32 years in Congress, and uh guy who his legacy is a little bit mixed. It kind of depends on on who you ask in terms of what uh what he meant to the mortgage industry. What are your thoughts, Aaron?

SPEAKER_01 2:40

Well, you know, as much as I have definitely been in disagreement with a lot of his policies, he has made an impact on housing. And, you know, he also did a lot to help the gay community, and I think that's pretty rad. He did a lot to help help a lot of my friends in that community. And so, you know, I think I think he's definitely going to be be missed.

SPEAKER_03 2:59

Yeah, for sure. Cob.

SPEAKER_05 3:02

Yeah, I mean, the legacy speaks for itself. Uh, I think you said it's 16 terms, 32 years in Congress, the first openly gay congressman, the first congressman to marry same-sex while in office. Um, you know, a little bit of a mixed checkered record when it comes to housing reform. He was kind of uh, you know, on the on the dovish side prior to the Great Recession, where he wanted to let let the good times roll. Um, and then post with his role at signature bank, um, you know, perhaps letting uh you know, making some excuses there where he was a little bit tighter on other banks that he wasn't involved with financially. But it speaks for itself. I mean, his legacy endures. Um, you know, what he authored, what he has fingerprints on in this industry, far reaching, impacts us every single day, each and every one of us. Um, obviously a lot that should probably get fixed at this point, but uh there's no question that um there's perhaps no single other politician that has had as big an impact on our industry as him. You could make that argument.

SPEAKER_03 3:58

He was really good at playing on both sides of the aisle, and not a lot of people are are really great at that, uh, especially in today's politics. That's for that's for darn sure. Um Dodd Frank, it's been great. You know, there are there are some nuances to it that I'd love to see uh tightened up. LO Comp was an overreach for sure. Um, and that's something that I think that they're gonna uh that will be addressed, you know, Aaron, in your time at uh at Resbog and your close association with the NBA, think that will happen eventually. I'm not sure it's like the highest of priorities, but but based on all the knowledge that you have on this, do you think that that's something that will be uh addressed here in the not too distant future?

SPEAKER_01 4:42

I I don't know how hopeful I am. I know that uh we want it, we are pushing for it, and we really believe that there is room for common sense reform to be made. The big question really is going to be the staffing level at CPB and their priorities. I know 1031, I know that uh RegX for servicing is a big deal. They're close to the finish line on that. And obviously, we have you know everything with the executive orders that came through. So we're gonna continue to push for it. And I would love to see it. I'm not sure how hopeful I am in the near term just because of the staffing limitations.

SPEAKER_03 5:15

So I had a chance earlier to talk to Scott Olson. He's the executive director at the Community Home Lenders of America. That's another trade group that does great work in our industry. And he was the former housing policy director on the housing financial services committee. He actually sat with Barney Frank and helped to write Dodd Frank. He sat with him real time live and worked with him for several years. And earlier today we had a chance to catch up and he shared these sentiments on the late Barney Frank.

SPEAKER_02 5:44

Today he tallied up what changes he was able to make. And he taught me, I can't tell you how many times I've been in meetings where people say, Well, you can't do that because the law doesn't. He goes, We are the law. If it's a if it's a mistake, we can fix it. And that's the way he looked at everything. He always thought you can always make things better. So um that's what he was about. And um, he was a great boss to work with. Um, you know, he kind of had a reputation of being tough on people, and he was. I mean, he yelled at me there. If he didn't ever get mad at someone, then they weren't really doing anything for him. But he's the only boss I've had out of four members of Congress that actually wrote me a personal note thanking me for the work I'd done on a deal. And you really can't ask for more than that to have a boss that criticizes when you screw up and compliments you when you do a good job. To me, that's about as good as it gets.

SPEAKER_03 6:42

And so uh we wish him, you know, all the best. May he rest in peace. Um, certainly made an impact and worth mentioning here right off the top. And, you know, good segue is how much he cared about underserved communities. You know, he he was a staunch advocate for putting people that otherwise wouldn't be able to afford uh low-income housing into houses. And it's uh it is the great segue into this next topic here, and that's rent versus buy. And we're gonna spend some time on this because Aaron, um, we started to talk about this a couple of weeks ago, uh, as far as does it make sense to rent versus buy? Uh, does it make sense to buy versus rent in today's climate? And the numbers are telling a cautionary tale when it comes to buying versus renting.

SPEAKER_01 7:29

Yeah, and it's it's all market specific. There's some markets where the the advantage to buying is is clear, but it there are some markets where you do have to ask yourself, does it make sense, right? I mean, we're in an environment now where asset prices are going up because of inflation. And so does it make more sense to save money every month, um, put it, put it in and invest it in the stock market and rent. Um, also, you have to say, Do I make enough money to afford a home? And that's obviously the crux of the affordability issues that we've been seeing, where people just simply cannot afford to purchase a home in many markets that have seen an extreme increase in valuation that is not kept up with an increase in prices. Um, and with the inflation that we've seen, um last week we had CPI uh or we had inflation come in at 3.8, income growth at 3.6, which means nominal income growth is at negative 0.2%. So there's just a lot of markets there where it people either just cannot afford or they can make the personal decision where they can actually be better off renting, see what happens with values, because values are not rapidly increasing. If anything, they're decreasing in these areas. And so maybe from a personal investment standpoint, it's easier to save the money, put save it, put it in the market, and wait for another day to purchase.

SPEAKER_03 8:50

Kobe, what are your thoughts on this, buddy? Rent versus buying. To me, it looked to me to me, it's pretty, it's pretty ominous the clouds that have gathered here and the signs point to renting being a better bet right now than buying.

SPEAKER_05 9:05

You know, I was a loan officer for a long time. Um, I originated loans for the first uh I don't know, probably 14 or 15 years of my career. Um, you know, I people that are making enough money, that are looking for roots in a community, that are looking to establish their lives, if they can afford it, they want to buy. I never once recall at least a customer coming to me when they're trying to compare payments and saying, well, I think as long as the housing payment is less than what I'm paying in rent, I'm gonna do it. Otherwise, I'm not going to do it. The question was, this is my budget. Can we get it to that number? And if it works in that number, because it's all about the monthly payment, can we get it to that number? And if we can, I want to do this because I want to buy. People do want to buy homes, they want to control their destiny, they want to own their real estate. It's part of the American dream. Um, are the numbers skewed right now? Well, of course they are, especially in these markets that we've got in front of us. Um, you know, but I I think this, you know, should we rent versus buy? Well, you know, of course I think the answer is people should buy homes and if they can, and people want to buy homes if they can. So I don't think people are doing this equation of, well, it's $2,000 to rent and it's $4,000 to buy. So obviously I'm gonna rent. If they can afford to buy, they want to buy. We've seen that. We're still doing five million of these a month if you take existing home sales and new home sales, five million, sorry, a year. So if you factor that in, there's still 5 million transactions a year. People that can afford to buy are buying. And at the peak, we were at what, six million? So we're we're not completely way off from that number. We're you know, 20% down. Um, but people are still buying, even in this economy where you have the uncertain that we have, the uncertainty that we have, the higher rates that we have, uh, the inflation that we have, the inflation outpacing wage growth, we're still seeing. And we have a stronger purchase market this year than we had last year. So I'm not sure what the crux of this argument is right now, but um, you know, are the numbers off? Yeah, you know, can we solve that with with uh with more supply? Yes. So, you know, I'm not sure there's an argument to be made here.

SPEAKER_03 11:03

Well, the more supply, the more the more supply thing is a completely different conversation because that's not that doesn't that doesn't appear to be happening anytime soon. Um if we if we can just look at why people own homes, right? I think you touched on the number one factor that is to be a part of a community. But the other thing is is to have a great investment. And so when you when you look at that thesis right now, when you look at uh out of control insurance, when you look at rates that appear to be rising, when you look at overall inflation, what it's costing people to just fill their tank the other day, $140 to fill my gas-guzzling SUV, I think it's reasonable to ask the question is the first-time homebuyer because I put them in a completely different category. And the most important category, as far as I'm concerned, um what's the best advice to give them right now? Are they catching a falling knife? You know, and I think that the real litness test to me is what would you tell your kid? And what I would tell my kid right now, if he asked dad, should I buy a home? I would say, if you can get an unbelievable deal, do it. If you can get full concessions, if you can get a lot off of the asking price, if it's going to appraise for more than what you're buying it for, a bunch of variables would have to be in line for me to say to my kid, buy a house today. This is a sound investment that will yield dividends in the next five years or so. I mean, some analysts are saying that uh break-even periods, which the old school was two to five years, could be seven to nine years now. Aaron, what are your thoughts on this conversation? What would you tell your kid?

SPEAKER_01 12:49

Well, you know, I think it's good. What I think is really cool, honestly, about this conversation is I actually think that this just adds a different level of nuance or complexity to the home buying decision, regardless of first-time homebuyer or not. So it would depend on where my kid lived, right? If they're in Pittsburgh, I might say bye, it's worth it. You know, um, I would just move out of Houston, Texas. And in Houston, Texas, I made a very cognizant decision not to purchase a home because I saw property values declining. It was super cheap for me to rent. The property insurance or the insurance um is going up every single year, rates are high. And so for me, it did not make financial sense. I was able to put more money away than and wait to see what happens with values and let them level out before I went to purchase, right? And so I think the fact of the matter is is there's just now a different equation that people can take into consideration depending on the very nuance of the market that they're living in. And I think that's the part we can't get away from in this conversation, is it really just depends on where you live. And this market is becoming so completely fractured. Real estate's always been local, but it's even more local than ever. And it's almost like we have a K-shaped housing economy as well, where you have some areas that housing is doing great, you're having appreciation, there's good demand, right? But then you have other areas that are are languishing that aren't aren't doing as great. And some of these markets are it. I mean, I own a home in Austin, Texas that I purchased in February of 2023. And, you know, I would have to write a hundred thousand dollar check right now to to sell that house. Um, and so I to me, like the interesting part of this is that math, that equation, a lot of it depends on where you live. And if you're a first-time home buyer and you want, you want to go ahead and jump in and buy, um, that's great. And I think you should, but I I think you can also take a step back and say, well, what's going on with property values? Is this going to be a great investment for me now, or should I hold out a year or so and wait and to see if property values have bottomed? And and I think that that's just kind of where my head goes when I look at all of this.

SPEAKER_03 14:52

Kobe, would you encourage that analysis? Erin is saying that she might tell uh her kid, you know, maybe it's uh a good window to just take a little reprieve, take a breather and view from the outside for 12 months or so.

SPEAKER_05 15:05

You know, I look, you know, if you're talking about it.

SPEAKER_03 15:07

I know you don't I don't I know you don't agree with it. Come on, don't be politically correct. Come on, buddy. It's no surrender, man.

SPEAKER_05 15:12

Hot takes if you if you look at if you look at where people are buying homes right now, if you look at the top 10 markets, and realtor.com just did an infographic about this, and I did a post a couple of weeks ago. It's cities where large industry has left about 30 to 40 years ago. So it's places like Flint, Michigan, it's places like Akron, Ohio, it's places that left a lot of dead inventory where the prices fell and people can afford to buy. If you can afford to buy, there is no question that that's the right thing to do. That may not be the case in every market. If you're a first-time home buyer, are you gonna get a better deal in Flint, Michigan than you are in San Francisco? Absolutely, but you're not gonna see the same appreciation. The biggest single lever we have in this country for economic gain is the 30-year fixed mortgage. That was a game changer when that came out. It's been a game changer. Um, values have historically risen. The 30-year fixed is the equalizer because it keeps a fixed payment and against inflation as a hedge. So you've got that same payment. The only thing that's the variable are the are the insurance and the taxes, which we know are issues that we've addressed on this show. Um, but but the single lever, greatest lever to wealth that most Americans have in this country is the equity that they build in their home. And and Aaron, if you're talking about you know, paying rent and then investing some money, well, this chart shows you exactly what that is. There's your $1,900 in rent and your $2,600 in payment. So you're investing that extra $700 in the house and you have a place to live and you don't have to move, and you're in a community that's probably safer than a community that's full of renters.

SPEAKER_03 16:35

And you're paying you're paying a ton of interest. You're paying a ton of interest too. So you're not knocking out.

SPEAKER_01 16:40

And if your property values are declining, then you know you're you're you're not you're losing money, and you had your down payment.

SPEAKER_03 16:47

You know, you could have put that, you could, you could have put that in something else.

SPEAKER_01 16:50

That's why, like, it's market specific. Like, I can't answer this question uh as a whole. I like it, it just depends on what market you're in and understanding the market dynamics at play.

SPEAKER_05 16:59

But show me a market that has historically declined in value since that's been tracked. Show me the single market.

SPEAKER_03 17:04

Show show me show me an environment that has been as volatile as the last seven years with COVID, with rates at three, with rates at eight, with the rapid appreciation. This is not an apples to apples moment. You cannot look you cannot look at history in this moment.

SPEAKER_05 17:23

Yes, I can. If I look at if I look at where insurance was and where interest rates were in the late 70s and early 80s in this country, absolutely I can make the comparison because that was a much worse time economically. Housing prices were lower, but interest rates were twice or three times as high, actually. So, I mean, there there are comparisons to be made. We go through volatile economic cycles in this country all the time, and through all that, historically, home rise home prices have always risen through it. And that's a fact.

SPEAKER_03 17:47

Well, you're coming off a period of time, Aaron, though, where rates have where uh appreciation has you know it's doubled, tripled in some instances.

SPEAKER_01 17:54

Yeah, and and sellers are still trying to get a price for a house that was supported at a 2% interest rate and not at a knocking on seven interest rate, right? And so so I'm sorry, but if you look at at markets in Florida, markets in Texas, markets right now that that are depreciating, there they're I think there's a value, a value, like an actual argument to be made that holding off and pausing purchasing for six months for a year, this is not don't ever purchase a home. This is understanding the market and saying, hey, maybe I can forego like I'm not uh that this market is still going down. So why would I buy it today's prices when in six months to a year I might be able to get a better deal? Then I can jump in and save some extra money in the meantime. And so again, I think it's just doing an equation of where you want to buy. I ultimately I'm in housing. Housing is, I think I believe I'm in this business not because I get a paycheck, but because I believe in what housing does for our economy. Um, but I do think it's it's it's understanding what is the best investment for your own personal situation at the time.

SPEAKER_05 18:50

Aaron, if you're a loan officer, are you going to tell a customer now what the advice you may give your son or daughter, but if you're a loan officer, you've got somebody coming in applying for a loan, are you going to tell them, hey, you should maybe wait six or 12 months for the market to get softer?

SPEAKER_01 19:04

No, I'm not because it's not my decision to make for their own personal well-being, right? And we keep, I, you know, I know this conversation came up about loan officers saying it. What about real estate agents, right? When I went to go purchase a home in Austin, I told them that, hey, I might want to make this a rental property in a couple years. And he was like, okay, well, just then let's look at what the average rents are so you can see if you're even going to cover your nut on this payment, right? And so we I had that conversation with my real estate agent. But honestly, like people need to make these decisions for themselves. And I don't know that it's the loan officer's responsibility to come in and be like, Are you sure you want to do this?

SPEAKER_03 19:39

No, hang on though. Hang on, because Kobe's stealing my thunder. He teed it up for us. So we'll go, we'll we'll go deep into that. Uh, I like it, Kobe. I appreciate that. That was very uh slick. So hats off hats off to you. Um so let's get into this conversation. What is the responsibility of the loan officer to share with the consumer, with the borrower in this moment in time? What is the responsibility? I think what I'm hearing Aaron say is the responsibility is to provide great loan terms and to be a conduit to getting them into their home.

SPEAKER_01 20:15

Yeah, and make sure that they're they can afford it.

SPEAKER_03 20:18

Yeah, okay. Make sure they can afford it. We we all agree on that, right? And I love housing as much as anybody. Okay, so let me just get that out there um as well. And we close 20,000 loans a year at NFM. So I mean we need to close loans. We need to encourage people to believe in the dream. This is just a pragmatic reality moment kind of check thing here. Let me reposition this, Kobe. You're on the phone with that consumer. Now you're the loan officer. You used to be an LO and I'm the consumer. And I say to you, Kobe, I'm really not sure. I see what's going on, I see the headlines, I see 8% rates, I see my neighbor's insurance has tripled, complaining about their payment going up. You know, they were at 45 LTV when they bought the home. Now they're at 60 having to make choices. Kobe, you tell me, is this a good time to buy a home?

SPEAKER_05 21:04

And I'll tell you what I've told many customers over the years that approach me, you have to decide whether it's a good time for you to buy a home. That's the answer I gave to many customers that would ask me, is now a good time to buy? They would ask about rates. First thing they ask, what are your rates? Is now a good time to buy? Question is, is now a good time for you to buy a home?

SPEAKER_03 21:20

Yeah, and they're gonna say to you, You're the you're you're the expert. I'm asking you. You're the guy that puts people in houses. Tell me, Kobe, is that a good time to buy a home? What's your answer? That's a comment.

SPEAKER_05 21:30

I would, I would, I would give them all of the context necessary. Um, I would not be in a position to warn them. I mean, look, you know, an LO, a loan officer in this country, by law, we are not fiduciaries. Loan officers are there to to to facilitate the financing of a home, to disclose things properly, to have those conversations. We are not a fiduciary. It is not our responsibility to say, I don't think you should buy this. In fact, we're not even allowed to do that for fair houses.

SPEAKER_03 21:52

I wouldn't say that. That's not what I'm saying, but you could say, great question. Great question. What's what's the number one important thing to you, borrower? Well, the number one important thing to me is that my money pays off. I've got to go into my 401k and grab this 50 grand for a down payment. So I'm counting on appreciation, Kobe. Do you think we're in that kind of environment right now? What should I expect from my $300,000 purchase after five years? Is my home going to be worth a lot more than $300,000, Kobe? What do you think?

SPEAKER_05 22:18

And I would show them the chart I've showed many customers, and then I alluded to on the show, which is that historically in this country, home prices have always risen. So you're I get it.

SPEAKER_03 22:27

I get it. Historically, right. Well, I personally think that uh history is history goes out the door here in this moment in time. And I do think it is the loan officer's responsibility to level up with the consumer and let them know. I think the history timeline is appropriate. I appreciate that, but the moment is the moment, and the headlines are the headlines. And there's no consumer worth their weight that is coming to the table without a really good cursory understanding of what's going on in the market right now. You talk about financial literacy, you know, uh, people like my friend Dave Savage at First Home IQ, who talks about how we are the first responders, you know, to this financial literacy crisis. Well, what is financial literacy, Aaron? Isn't financial literacy the conversation we're having right now?

SPEAKER_01 23:18

Well, I think financial literacy is also saying this is an investment I want to make a long-term investment for my family. And because I want to, I can afford this, right? To me, financial literacy is also the affording. And some people want to purchase a home and they know that long run they're there for the long run. And so I don't think that that saying, hey, maybe the next six months isn't the best time to buy really is financial literacy. I think it's what do you want for your and for your long-term financial health for your family? And if this is what you believe it is and we can afford it, right? To me, the affordability piece is huge, then then I think that that that is satisfied.

SPEAKER_03 23:54

Yeah, I think charts are misleading in this moment. So if you're a loan officer and you're just gonna pull up a chart and talk about history, you're you're doing your consumer uh disservice. That's my thought on that. So we don't we don't agree, which is which that's healthy, I think, Kobe. That's what makes us brothers from another mother. You know that, right?

SPEAKER_05 24:11

It is, it is. I love you despite the disagreement. But if the argument is that, you know, we can't use historical data to make an argument about what may happen in the future, we have to just throw all of that out and say the future now is different. Hard for me to argue against that with you.

SPEAKER_03 24:26

Hard normally, but these are this is an unprecedented moment here. So, you know, caught caution to the wind. Certainly owning a home, you've got you've got to hope, despite all the headwinds, that it's gonna continue to be the true American dream, right? And with that in mind, there are levers that our administration can pull. And I want to talk about what those best measures are. What is our best idea for pumping some life into um this idea of owning a home? You know, that the $10,000 um interest deduction cap, uh, which used to be uh unlimited or a lot higher, um, I would love to see that reversed at least temporarily. And then, of course, the LLPAs, right? Like, I think we've all come to terms with the fact that Fannie and Freddie are going to be cash cows cool. But if you're gonna have that, if you're gonna be able to take all that in, at least use that lever when needed to thwart, you know, to put momentum in place. Um I I think they should do that. Like if Barry Habib is listening, who is on the board of Fannie Mae and is uh has a direct line into into Director Poulty, like you know, we've got several months till the midterms, midterms, and they need a win badly right now, and housing is is a big topic.

SPEAKER_01 25:40

Yeah. I mean, you see, you know, talking about the taxes, I I think we should absolutely leverage tax incentives. I think that's wonderful. We on the other side, though, however, need to have spending reductions by the government, right? That that's the other half of that equation. And we don't seem to be able to get those. And so, you know, that that's that's a hard pill to swallow because then you're just increasing your net your national deficit. So the other part of that conversation has to be where are we cutting our spending to pay for that? Um, and the LLP conversation, you know, I completely agree. I mean, Fannie and Freddie continue to rake in tons of money. They're not leaving conservatorship anytime soon. Um, and and if there's there's an opportunity there to make housing more affordable in this market that has just become insanely prohibitive in many markets, uh, I think we need to look at that.

SPEAKER_05 26:31

Yeah, the um the the danger of those things, and I'm and I'm for both of those things, but we have to we have to look at the all-above solution, which is if we start putting demand-side solutions into the market like tax incentives, like you know, even LLPA reforms, and you bring more buyers into the market, what that does in the short term, the the benefit of that winds up going to the sell side because we are supply constrained. So we have to look at what the net effect of that is. Does it bring more buyers? But if it does bring more buyers, does the chart that you guys just put up before, does that chart look even worse because now we've pushed the prices up even higher with more entrance into the market and no more supply? So I think that's why these conversations have to be dual-sided. There have to be the levers on both sides that balance the market a lot more than just saying, well, let's make it more affordable so more people can enter the market. The incumbents in the market, the ones that are keeping prices high, we need to address that issue just as much as the new entrants.

SPEAKER_03 27:24

What about as it relates to just first-time homebuyers, Kobe? Same position, or does that change a little bit?

SPEAKER_05 27:30

Look, I there's there there are there are a lot of things that we can do for first-time homebuyers that don't require tax incentives or even LLPA reform. There's there's seller buy downs that we could use, there's uh there's down payment assistance, there's down payment, there's down payment uh gifts and grants, there's uh gifts and grants from family. I mean, there's a lot of ways to help first-time homebuyers into the market. And the advice I would also give first-time home homebuyers is you know, there are pockets of real estate in this country, even outside of the bigger markets where you can still find affordable housing, but a lot of that still comes down to we need to build those homes for people. And if we take away some of that, and Scott Turner calls it the hundred thousand dollars worth of regulation that comes with building a new home, if we peel that away and we incentivize supply by taking some of that away, and a lot of that's at the state and local level, um, we can build more homes for first-time buyers. So a lot of these solutions are really an all of the above approach.

SPEAKER_01 28:21

Well, and I think really quick on that, I think that another thing, the one thing the government can do, uh specifically like and the FHA side to help with supply that will actually help bring prices down is we also need to make sure that when we do need to foreclose on people, they do need to exit their homes. It's not a three or five year process that it's a quick process once once they've exhausted all of all of their options to try to stay in a home because that's going to help put supply on the market, will help bring houses down and and lower prices is you're right, completely correct, Kobe. Ultimately, what's going to help affordability?

SPEAKER_03 28:54

Yeah, or the 12 to 15 million vacant homes that would help to get those in the market, or the 664 million acres that the government owns. Of course, less than 1% is uh habitable, but still every little bit matters, right? Or the $2 million properties that the government owns that are dilapidated that could be I mean, there's a lot of little things that can happen. Of course, there's the Yimbi movement. I'm a NIMBY guy. Um, but uh what are you, Aaron? Are you Yimbi or NIMBY?

SPEAKER_01 29:23

Uh I think it would have to depend. I don't know.

SPEAKER_03 29:27

On whether it's your neighborhood or not, whether that condo is going up across the street from you.

SPEAKER_01 29:31

Well, I know. I mean, like what type of building are they doing? What type, you know, what are they doing? If if it's something that helps create a community that is a beautiful space and is a is affordable for people to live and helps bring prices down, then I'm for it.

SPEAKER_03 29:47

What about you, Cob? NIMBY or Yimbi?

SPEAKER_05 29:50

I'm a Yimbi guy. We need to build more homes. We need to build more types of homes that are affordable. I think it helps all of us at the end of the day. I mean, in in my community where we live in Sonoma, California, we used to have three elementary schools, now we have two. Do you know why we have two? Because we had to close one down because we didn't have enough young families living there, and we didn't have enough ability to send kids to school. So we had to consolidate the schools. When you start doing that, you start to have an aging community, you start to have a deteriorating community. Prop 13 in California is one of the worst measures in anywhere in the country, and we're seeing the net effects of that. Older people not selling their homes because their taxes aren't going up, so they're not incentivized to leave. People living in six million dollar properties that have $3,000 a year tax bills. I know two people like that. Um, and so we we need to figure out how do we get more young people into communities. That's what makes communities thrive, and that's what historically has pushed values higher and higher in this country over time. If we stop doing that, we're headed for decline. And then I agree with you that the paradigm has shifted and we need to start giving different advice.

SPEAKER_03 30:48

Yeah, I think NIMBY, uh Yimbi Yimbi, yes, in my backyard is like the last measure. There's so many other things that can be done. And there are stories out there that have circulated over the years of uh condos being uh erected in areas in in in cities, and it has changed the it has changed the landscape, and people have left those cities and and it has then created a whole nother problem.

SPEAKER_05 31:12

So um it's I think it's okay to be smart, not okay to be exclusionary.

SPEAKER_03 31:17

Yeah, all right. Well well, this guy's pretty smart, Vashal Greg Garg, he's the founder and CEO of better.com. Boy, did he drop a bomb. Uh, was reading this on the train to secondary. Um, now, of course, they have Tin Man and they're very heavy into AI, and they've raised well over $2 billion. And um they appear to have momentum, and Tin Man is this software that is very heavy AI that eliminates some of the human capital needed to make decisions. And um, he talks about this stare and compare approach that involves a lot of hands and a lot of eyes, processors, underwriters. He says it's proven ineffected, contributed to the last credit crisis when essential judgment and diligence were overlooked by these same licensed stare and compare experts. Furthermore, this method will not effectively combat the rising tide of AI-driven fraud. This is where it gets really interesting, including fake tax returns, pay stubs, W-2s, uh, bank statements, and HOA questionnaires that no human starer can detect. I wonder how many loans are defective every day and being delivered to the agencies by lenders who just don't know any better. We're just bringing, we're just brewing the next putback tsunami simply because we refuse to part with the past. Wow. That is uh uh that's a bomb drop right there. Kobe, you lead this one off.

SPEAKER_05 32:48

Yeah, I mean, a few things uh in in that in that comment there are, and I like Vishal. I I had the chance to meet him this week here in New York City, and uh he's you know, he's actually a really nice, warm human being when you meet him in person. So a little bit different than the image that he sometimes portrays. Um, where does that $9,500 in production cost attributed to this come from? Uh we just we we know that's not the case. That's number one. Number two, um, you know, what are the numbers? How many, how many fake tax returns are being pushed through the system? We have ways of verifying that. Um, you know, the the systems that we have now are so sophisticated. Um, you know, and I know that you can have AI, and I heard Jen McGuinness talk about this the other day on your show, that you can have AI uh create something that another AI, you know, couldn't detect. And it's and it brought me back to the philosophical question of can God create a rock that he himself couldn't move? And it's like, well, you know, if you have the AI just competing with itself to create documents that the other AI can't detect, um, you know, at what point, you know, do we say, all right, well, we can no longer accept documents and we have to have a whole different way of verifying things independently without customers uploading docs? And if we can get to that, great. I'm not sure we have a problem, first of all, of $9,500 per loan and stare and compare costs, number one. Number two, I'm not sure we have such an overarching problem with fraudulent documents. Number three, he talked about it contributing to the last credit crisis. Is that really why we had a credit crisis in the Great Recession because of fraudulent loans? We had it because of the loans we were making that were 100% real that shouldn't have been made. So, you know, I don't know.

SPEAKER_03 34:13

Yeah, well, whoa, whoa, whoa. People were false. People were lying about their income all over the place. We were encouraging them to do it, but we encouraged them to do it. That's not the point you were making. You said this was fraud really the reason. Yeah, fraud was a big reason.

SPEAKER_05 34:25

Yeah. Well, I mean, is it's hard to call it fraud when the whole when the loan was called no income, no asset, or you tell us what you're making, and we'll just believe you. It's hard to call that. No, no, no.

SPEAKER_01 34:36

Even full doc loans back then had so much fraud. I I was a subprime underwriter. I can tell you that the even the docs that were the loans that were full doc had a ton of fraud.

SPEAKER_05 34:45

You were a subprime underwriter?

SPEAKER_03 34:47

Option one, maybe. She has done it all. She's amazing. That's so lucky. We're so lucky to have it.

SPEAKER_05 34:54

That's like the wrestling referee who doesn't see anything.

SPEAKER_01 34:59

I was an excellent underwriter. Thank you, sir.

SPEAKER_03 35:01

So look, you right now you're the you're you're the you're the chief operating officer of a billion-dollar IMB, right? Something in that range. So I mean, it how concerned are you when reading a post like this? Was this already on your mind? Is it on your mind even more after reading this?

SPEAKER_01 35:16

It's been on my mind now. Now, Kobe's correct, like it's an advertising post, right? Like, so so let's set that aside that he's advertising his own system. But the where where the truth is, is that we are seeing fraud. I am seeing it. And so one of the the at Interlink, what we're looking at are AI systems that can help detect fraud, where it's looking at has have the metadata been adjusted, it's able to detect things that your eyes couldn't normally see. So, you know, if the AI is creating things that other AIs can't detect, but the fact of the matter is, is there's still a lot that can be detected, and we need to be on the lookout for it because I know for a fact that the GSEs are using AI to detect fraud on documents that get delivered after they're closed. And I've been told that as of now, there is zero desire or willingness to push that forward to give that to us as a resource on the origination side. And so those of us on the origination side need to be aware of this, and we need there's always been fraud. There always will be fraud, right? And they're getting smarter. And so we've got to be making sure that we on the origination side are doing our part to detect it.

SPEAKER_03 36:19

There is an irony here. Do you mind if I point it out? And let me put a disclaimer in here. I like Vashal myself. We've had several calls one-on-one. I've not met him in person, but he's been very gracious with his time and is clearly a brilliant next level intelligence guy. But when you talk about his persona, this is a guy that made a bad name for himself in a in a moment where he made a judgment mistake in in laying a bunch of people off, hundreds of employees off, and uh in what was characterized by those on the receiving end as cold and callous, right? And so those are a lot of operations people, underwriters, processors, right? And here we are years later, and he's kind of making an argument doubling down, yeah.

SPEAKER_01 37:07

Yeah, absolutely.

SPEAKER_05 37:09

Wow, yeah, you know, you know, but again, you know, this is uh there's no question there's fraud. I think I think when there's a question of people trying to obtain large amounts of money from a financial institution, whether it be a casino, whether it be a bank, whether it be a mortgage company, you're going to have fraud. The question is, how rampant and widespread is the issue, and how little control or or control do we have over the matter? I think for the most part, we've got a pretty good amount of control. We have a good awareness. Um, you know, the reason that we have the credit reporting that we have today is because we were worried about people creating their own credit reports uh back in the 90s. And so we went to the standardized system, uh, and to which now we're saying, hey, maybe we should make credit reports portable again, because now we have enough safeguards in place to allow that process to happen. So I don't think we're, I think this conversation is out of place in terms of where we are right now with our abilities. Um we all have safeguards, you know, the the stare and compare is not the ultimate arbiter. It's it's it's all the different verifications that we have that each of us, whether it be the 4506 or a VOE or all the different levers we can pull to make sure that this issue is limited. And I I just I think it's a non-issue, to be honest.

SPEAKER_01 38:19

Well, that all costs more money, more money, more money, more money.

SPEAKER_05 38:22

No money, no problems. Are there efficiencies to be had by using automated systems? A thousand percent. And that's a conversation to have, not we need this now because otherwise we're gonna drop off the cliff of fraud.

SPEAKER_01 38:33

Well, and I think also, like to your point though, the direct to data, I mean that that is ultimately where we need to go. That I think is the next iteration, is is we, and you know, and I even saw was it like super FICO or something? I don't remember, but where it's like comparing it's bringing in your credit report data along with your banking data. And that I think is really like I like that. And I think that really is kind of the next iteration of where we need to be going is that direct to data.

SPEAKER_03 38:56

Yeah. Well, two things I like.

SPEAKER_05 38:58

What a great, what a great process that would be for consumers too, if they didn't have to provide any documents.

SPEAKER_03 39:04

I admire uh Vishal for for I think this is constructive, even though it appears to be a little bit of an advertisement potentially for Tin Man, his system that he's selling on the open market. Uh, it's still it's got this conversation going, and he's raising awareness. Like to me, that is great leadership. So, uh Vishal, I commend you for bringing it up. Uh, as self-serving as it might be, it's still an important conversation for us to have, and I really appreciate that you pushed it out into the fore for us to have this conversation. And you talk about data, Aaron. We're gonna jump into the next topic here, and that's uh non-QM loans. This is something that I touched on late in our conversation um last week. And um, you know, the question is is uh is is there another side to the craze, right? Like I saw a stat the other day that that uh non-QM, I believe, is is inching towards uh nine, 10% of the total market share. Um is that a concern, Yukobi? I I remember you or the you or somebody told me that these loans presently are performing as well or better than conventional loans. Let's unpack it.

SPEAKER_05 40:14

I don't I don't think that was me saying that. Um but what I what I what I will add to this conversation, um, and this is based on my own research and several conversations I've had with Logan Matashami, um, is that you know the the the idea that these loans will ever have as prevalent a place in our market as any of the subprime loans had prior to 2010-11, not to Dodd-Frank, um, you know, we just we're just not in that business anymore as an industry. Um so I I think while these loans are concerning in terms of the rising levels of delinquencies, the the net effect that they have on our industry and the net size that they have on our industry in terms of a percentage of the total business being done, um, you know, it's nearly negligible, even though more of it's being done every year. But, you know, I just don't think we're gonna get to a point where we have to worry about these loans the same way we have to worry about the subprime prices.

SPEAKER_03 41:03

That's that's I don't know how you can call it negligible. It's it's it's growing in a big way. I mean, I know just I know us at NFM, we've doubled down on it three years in a row. Some of the biggest lender names that we know have also doubled down on it. They're really leaning in. Um, so I don't think it's negligible. I think it's concerning um when you have all these people running towards a product that is that the majority of these loans, the majority, so more than 50%, um, are qualified based on rental income. And we just had a whole conversation about uh the environment that we're in. And um, you know, if we have a if we have a real slowdown in the economy, which we could have, Aaron, then uh rental, it's gonna be you're gonna be able to get, I think rents are going already going down in certain places, right? And and so you've got rents going down. Um, you have these DSCR loans that are attached to uh the assumption that this payment's gonna come in and stay in. Uh what's your what are we looking at on this graph that you drummed up and what's your opinion on the non-QM space right now?

SPEAKER_01 42:02

You know, so I think if you look at this and compare it to FHA, which is third 30, 40% of the markets, uh, I think it's not nearly as scary as what could be happening on the FHA space. Um, I think I was actually surprised. So I I kind of dug into these numbers a little bit. Um, and DSCR uh delinquency is actually well below bank statement loan delinquency. And and part of that that I read is is because you have DSCR that are at 100, 125 plus percent of rental income. So, so to me, I think this is not going to be anywhere near what subprime was, but I do think that lenders need to be very cautious about the loans that they are offering in this non-QM space. So there's a very real, there's a very big place, a very good place for non-QM borrowers. But if you're offering you know DSCRs in an area where the the rental values are declining and you're doing a 70 0.75 DSCR, that's a problematic loan, in my opinion. So I think just like anything else, we need to be smart. Um, but for me, this is this is while it's on the radar, I'm paying more attention to to the FHA space.

SPEAKER_03 43:10

All right, and that's fair, right? We're seeing rising delinquencies. I think we're up above 13% right now, right? One in every nine uh FHA loans. It last I looked was delinquent, and that was not getting any prettier, Aaron. But wait a minute. You're a former underwriter, right? So put your underwriting cap on for a minute, take off the COO hat, and and I want you to tell me from a risk standpoint, um, underwriting a loan like this and knowing the climate that we're in and might be going in, what your thoughts are on the solvent, yeah, how solvent these loans are. Like how how comfortable are you knowing what you know and knowing what it takes to qualify for a DSCR loan?

SPEAKER_01 43:56

I'm real concerned for anything over a one to one. DSCR ratio. To me, anything below that is absolutely terrifying to me. I'm also concerned about, you know, is this reverse occupancy fraud, right? That's something we see a lot. And Baltimore had a real big problem with that in the last year, right? And so, so there is a concern for me, especially in the DSCR space when you go at the super low ratios, but I don't think it's enough for me to say that that this product is comparative to subprime. It's just not a good idea.

SPEAKER_05 44:27

No, it definitely is reverse. Sorry, Kobe. When you say reverse occupancy fraud, you mean people using these loans, claiming their rentals, but really moving into them to get the correct their primary residences because they can't doc they can't dot qualify.

SPEAKER_01 44:40

So they're basically treating them like stated income primary residences.

SPEAKER_05 44:44

Got it. Um I just Greg, I want to put you on the spot for a second. If you don't have the numbers in front of you, you don't. Um, but you had 20,000 loans at NFM. How many of those were non-QM and how many of those were actually defaulted? I don't know. You may not have that number number in front of you.

SPEAKER_03 44:59

Don't I don't I don't have the second number. I'm too scared to look. I'm kidding. I'm not too scared to look. Uh, but I know that we were at, you know, 2%, 4%, 6%. We want to get to 8%, you know, maybe 10% next year. And that's the Kobe, that's the concern that I have. Like this is not a checker conversation. This is a chess conversation, okay? And the concern that I have is when you see so much money coming into any aspect of the business, especially tied to bank statements or an assumption tied to a rental payment, and you have payups as good or better in some instances than conventional loans, that you you know right away that there's a lot of capital flowing into this, and the appetite is huge. And one thing we are terrible about in this industry is is our amnesia problem. Okay. So let me tell you how I let me tell you how this looks. Those people start to go, oh shit, you know, we have something's cracking over here, or you something fundamentally happens where it's not growing the way they want it to grow. And let's just compare it to a rising FHA default rate, right? There's only one way for that to go down, right? It's not just do better loans today, it's throw more at it. So my concern is that these folks that are backing this, and there's got to be a lot of money, man, backing it, are gonna say, what's the next product we can create? And that's the chess conversation. And that's what got us into the that's what got us into the trouble with subprime, okay. And if we're not careful, that is what will get us in trouble here. I know you both want to comment on this.

SPEAKER_05 46:36

Yeah, look, we had this conversation on a previous episode where we talked about that equity select program, and we talked about you know the short memory of the industry and how we really can't be trusted to start, you know, going off the rails with our lending products. The reality is, while there are some fundamental issues with some of the non-QM lending, it's a whole different ballgame. And I and I think Aaron, you can attest to this, it's a whole different ballgame than what we were doing during the subprime era. I I think it's there there was there was a lot more risk in those loans. The leverage was a lot higher, the the chance for default and payment shock was a lot higher in those loans. Um, I think structurally, these loans are better. Um, I think there's definitely danger in what you're saying, Greg. If you know, if we if we continue to push the envelope, if Wall Street and the secondary markets decide we want more of this product, we do have a bad history of saying, okay, yeah, sure, we'll take it and we'll push it out. So that for sure. Um, but you know, are we in crisis mode right now with this? I don't think so.

SPEAKER_03 47:29

We're not. But this is where this is where the conversation starts, right here, right now, Aaron.

SPEAKER_01 47:34

Well, and I think that and the a wild card that I think is gonna drive more loans into the non-QM space or the upcoming Fannie Freddie uh condo changes, because you are now with elimination of limited review, with the new budget changes. Um like they're now is going to push way more overnight. You're gonna have way more uh condo projects that are now non-warrantable and potentially being pushed to this non-QM space. So now you have a borrower, first-time borrower with one of the few affordable properties getting pushed into higher rates. Then what happens when their HOA dues go up because they have to meet the, you know, like what happens when their insurance goes up? So um I that's I think is a wild card that I'm I am a little concerned about is what is gonna happen with condos going into non-QM.

SPEAKER_03 48:16

That's a great call, Aaron, that you pulled that limited uh warranty in there. And you know, it's like a mic drop moment. I'm just gonna take my entire thing. This is like a mic drop for you. I just dropped it. I mean, you dropped it like it was hot. You gave me the you know that at the end. Are we done on this topic?

SPEAKER_05 48:34

We have a lot of comments in the in the I'm not sure what it's a couple of nail files in there. Like what was happening in that it's yeah, well, I I do have an L file.

SPEAKER_03 48:43

I saw a pair.

SPEAKER_05 48:43

I saw a pair of children's scissors.

SPEAKER_01 48:46

Well, listen, we know he can't be chart, he can't be responsible, like he sharp things, no.

SPEAKER_03 48:50

So somehow, uh somehow I have a Q tip in here. I'm not sure who was using this or what's on it, but God forbid that came out of someone's nose or nose or ear. It wasn't mine.

SPEAKER_01 49:00

Someone's someone's.

SPEAKER_05 49:01

I didn't I didn't think we'd see anything worse than the Kobe sock this week, but we've managed to top it.

SPEAKER_01 49:06

It's crustier.

SPEAKER_03 49:08

No question. Well, uh no, the sock has gone into the hall of fame. Um, you guys know what this is, right?

SPEAKER_05 49:17

Oh, yeah.

SPEAKER_03 49:18

Yeah. Um, we know all too well. Um, this is just in the last month. We've seen the 10-year uh shoot up. You know, it's amazing. Uh I'm surprised things aren't worse. You know, to me, there's been amazing resiliency in the 30-year fixed rate. Um, you know, maybe that'll come to a head, maybe it won't. Uh, I want to play uh something that Logan Matashami, uh chief economist with Housing Wire, had to say earlier on their podcast. Of course, we all love and respect him so much. So let's uh let's let's throw a comment in here from him.

SPEAKER_00 49:54

What's happening is that we took all the rate cuts out of the system and we put a rate hike in. So the variables that took us here are inflation, the labor data destabilizing, and a conflict. One thing can end quickly, the other two can't. So just keep that in mind going out of the future. And if things get worse, you do have upside here, but a lot has been priced in. That's the key of today's conversation.

SPEAKER_03 50:17

Yeah. Do you uh do you take comfort in that, uh, Kobe, that a lot's been priced in, or are you uh you know weary of what uh weary, weary of what's going on as this continues to drag on? I mean, Logan also said, as so many did, that you know, this conflict needed to end March 21st, I believe was the date that he threw out there. And you know, I just feel like uh there are prognosticators. I'm not referring to Logan, but we just have people that keep pushing and pushing and pushing and pushing it out. It's not that bad, it's not that bad, it's not that bad. Love the positive uh vibes for sure. Then I read something uh where uh a former New York Fed governor or someone high up in the New York Fed, maybe not a governor, said that we could be looking at 8% pretty soon.

SPEAKER_05 51:02

Yeah, it's possible. I mean, that there's no question that the that the 200 billion of uh MBS purchases has has kind of kept the spreads a little bit better than they otherwise normally would have been. Um Logan's right, you can end the war today, you can't, but ending the war would also end some of the inflation trajectory. So the war does have impact on some of those other things. Um, you know, uh I think a lot of people thought if you were to tell a lot of people, and we had this discussion last week too, but if you were to tell people um, you know, that in January that we would be in a in an eight-week war that that you know so far shows no sign of slowing down or stopping, um, well, some signs of slowing down, that we'd be at 4.6 or 4.5 on the tenure, they wouldn't be surprised. Uh, and they would say, well, I would imagine it would be higher at this point. So we've we've actually um kept it to uh you know at a pretty good level. The question is now that we've broken through that four and a half technical level, is it now going to start running away and are we now gonna start inching towards seven and a half, eight percent rates? It's very possible. You know, I'm I'm not I'm not a great prognosticator. I can tell you though, we've we've been involved in long-term Middle East wars, and and usually these things do even out. We do get back to business, the price of oil tends to settle. Um, people start to move on. And, you know, unfortunately, we we just send more and more young people to fight these wars and we kind of move on to the next thing. Um, so am I super concerned about this conflict going on? No. Am I more concerned about other fundamental issues in the economy? Absolutely.

SPEAKER_01 52:28

Well, I mean, I think that this war is creating a lot, especially when you look at all of the not just oil, but everything else, um, you know, the the impact of this. And when Robert Kagan, the the guy who wrote the project for New American Century, even says that this war needs to end, then it needs to end. Um, it's creating untold economic misery all around the world, and including in our interest rate environment. And even if we end it today, it's going to still take months and months to get through all of the repercussions of it. And so, you know, I I am glad it's not worse. And I do think it could get a lot worse. I hope it doesn't.

SPEAKER_03 53:01

Kobe, I'm all over you today. I got to take you to task again, man. And I if I if you're with me, I'd hug you. You're one of my favorite people on earth, but you can't compare this to other times in the Middle East. You can't compare this to running over Saddam Hussein and pulling his statue down. You can't compare this to anything like that. This is uh this is a country with 90 million people, okay, bit off way more than we can chew. And I am a tr I voted for Donald Trump, okay? But this is like we got to take our toys and go the hell home and get out of there as quickly, as quickly as we can. And this is not this is not something we can keep fighting where there's gonna be a win or an outcome. It's just not gonna happen, is my opinion.

SPEAKER_05 53:43

First of all, love you too, and I'll take the hug anytime. I I I am not a proponent of the war. I'm not advocating we fight this forever. I'm advocating we find a way to get out of there. I find, of course, I want to dismantle the regime. We're not at war with 90 million people, first of all. We're at war with a regime that is pointing missiles at everybody. We need to we need to topple the regime if we can or reach some agreement with them if we can and end it. There's no question about that. What I'm saying is if it acts, if it winds up rolling out the same way many of our Middle East conflicts do, here's what I think will happen from an economic standpoint. I'm not saying we should keep fighting this thing until you know we run out of breath or people, um, but I'm I'm just saying what I think is going to play out from an economic standpoint based on history. Once again, based on history.

SPEAKER_03 54:30

You don't want to base it. You're going back to you're going back to the history thing again. Well, we'll go back to the rent versus zone and the appreciation. You're a big, you're a big, you're a big history guy. This is yeah, this is very similar to this period of time that was not not like any other, with in terms of three percent than eight percent, then appreciation that we've never seen before, the lock-in effect. That's the moment that I think that we're in right now. This is not anything that we can compare uh to. And and uh I mean, I I have to also say as as uh as a Jewish person, which I am, uh I I do feel like Netanyahu got Trump into this. You know, I mean that's that this is a whole different conversation, right? And we probably probably probably don't want to get deep into politics here. This is a this is a mortgage show, but it's it's concerning when you see a guy who I think believed what he said when he ran, that he didn't want to be, he wanted to be the president that ended wars. And he was he was on a good track there. And I really believed him at the time. And I think he was convinced that he would go in and get out, and it would be just like Afghanistan, just like Iraq. It would be just like that history that you want us to look at. But guess what? It's not, and we're two months in, and the economy's all kinds of messed up. 140 bucks to fill my gas tank. Um, you know, people are struggling, and it's uh it it is a code red moment, it feels like to me.

SPEAKER_05 55:58

What better way to bolster your record on ending wars than by starting a lot of them? There's no other way to get the numbers juiced. Um, you know, I I I agree with you. I think I think uh he definitely doesn't want to be in this. I think he got coerced to be in this. Um, and again, that's that's still a political discussion that everybody's got different opinions on on this show, I'm sure. Um, but you know, I look, my argument for for for judging the future based on history is we have nothing else to go on. We always think we live in unprecedented times with no historical parallel. Um, you know, I I I just I have to look at what's happened in the past to just get a glimpse of what I think is gonna happen in the future. But you're right, I could be wrong. Um, but history tells me otherwise.

SPEAKER_03 56:37

Yeah, that's a great point. You you you brought it you brought it all the way back around. We have a lot of comments in here. Uh Larry Silver, your friend and mine, this is one of the great guys. Would you tell your children to buy your rent today? Apparently, he really liked that one. Uh Sue Rainwater, what's up, Sue? One of the greatest recruiters ever to live. Uh, average sales price in my town in Danville, California is two million rentals, average 5,500. Okay.

SPEAKER_05 57:02

Danville's a nice place.

SPEAKER_03 57:04

If the loan is like, I noticed he didn't try his last name. Yeah, uh Clawbund. Clabund. Go ahead, you try it. Uh Clubundi.

SPEAKER_01 57:18

I was going with the Bundy. That was where I was going to be. Clubundy. It's just a fun name to say.

SPEAKER_03 57:26

Yeah. Kobe, you want you want to read this one?

SPEAKER_05 57:31

If loan officer become if loan offer officer, I'm assuming, becomes a business coach to an aspiring real estate investor and guides them to a great business decision, then they become the gift that keeps on giving with multiple purchases and refines a year. Uh, when we bring investor intelligence, everyone wins. So he's saying be the trusted advisor because that's going to get you more referral business. I 100% agree with that. You should, you should be the trusted advisor. Yeah. Dave Savage will tell you the same thing.

SPEAKER_03 57:56

Aaron, you can take this one.

SPEAKER_01 57:58

Oh, Ramon Cabrera. Lowering LLPAs for higher LTVs just adds fuel to the housing price fire and makes housing even more unaffordable.

SPEAKER_03 58:06

This guy agrees with Kobe, the great Kobe Hackalier, who, who, by the way, I mean, the best comment in all of these comments is this one right here.

SPEAKER_01 58:13

That's my homie. That's my that's my board buddy. I love that guy.

SPEAKER_03 58:18

And Aaron, uh, we all agree on that. I feel like we could just talk forever. We're coming up on an hour here. We never know how long these things are going to last, but this has been an incredible discussion. I hope that's a good thing.

SPEAKER_05 58:28

So hopefully not too much longer.

SPEAKER_01 58:30

I got to meet with my CEO, and and so I need him to stay happy with you.

SPEAKER_05 58:33

We didn't even talk about NBA secondary. And by the way, I was going to bring up, if we did, that right behind me in that window, through that window, is the Marriott Marquee where NBA secondary was held this year for the last time, moving to Chicago next year. Um, and I'm still in New York City, but leaving right after the show.

SPEAKER_03 58:49

I think uh the most powerful thing I learned, Aaron, at the NBA secondary conference was that uh in 2022, Kobe Hackalier was a bartender.

SPEAKER_01 58:58

In 22.

SPEAKER_03 59:00

Yeah, it was coming off of it was in the throes of COVID. He, you know, what wanted to do something different. There were only a couple things you could do at the time, and that was one of them. So, I mean, I bet he pours a mean drink.

SPEAKER_01 59:11

You know what? We should have a contest. I was a bartender in college. Let's go.

SPEAKER_03 59:14

Oh gosh.

unknown 59:15

Yeah.

SPEAKER_05 59:16

Well, I did it right out, I did it right after college, and then during COVID, as Greg said, you know, it was the only two things open was the bar and the fire department. I joined them both.

SPEAKER_03 59:25

Yeah. My thanks to Nyoung for helping organize this. Uh, no surrender is uh is peace out. Uh I would drop my mic, but it's all over my desk right now. Uh we'll see you again next Thursday at 1 p.m., everyone. Take care.

SPEAKER_06 59:41

No surrender on the show. We go toe to toe. What fail, what fails? Who gets the whole? Hot news, hot takes, raises takes.