Episode 13: Better's Shakeup, Consolidation & Immigration

This week's show is shaping up to be one of our most wide-ranging yet. Between executive shakeups, policy battles, global market questions, political drama, and of course, Erin’s big announcement, there’s plenty to unpack. 

This week's topics:

- Vishal Garg out as Better’s CEO  
- Are immigration policies a major headwind for housing?
- Layoffs and a wave of consolidation coming? 
- What does the 10-year have to do with Japan?
- Trump throwing in the towel in November? 

Whether you agree with us or not, you'll have plenty to talk about after the show.

Transcript

SPEAKER_04 0:38

Well, hello there.

SPEAKER_07 0:40

13, baby. 13.

SPEAKER_04 0:43

Will this be the lucky? Will this be the lucky 13? That's the question.

SPEAKER_07 0:46

You're about to find out.

SPEAKER_04 0:47

We are. Look at you, Aaron. You're looking uh shiny and new. You must have a new job.

SPEAKER_07 0:52

I do. Can you believe it? Look at me wearing looking all professional. No athleisure today.

SPEAKER_04 0:57

I've never seen you uh look so professional.

SPEAKER_07 0:59

Um don't get used to it.

SPEAKER_04 1:01

And you always look professional. Um, congratulations.

SPEAKER_07 1:04

Thank you.

SPEAKER_04 1:05

Are in order. Uh, Kobe and I would like to wish you all the best at Bank South Mortgage. You are officially there. It's very big news. Um, congratulations. Really, really happy for you.

SPEAKER_07 1:17

Thank you. I'm so excited. This is such an amazing opportunity. I can't wait to dig in a little bit more with uh with Kim on it.

SPEAKER_04 1:24

We're gonna do that. Uh, we're gonna bring up on stage right now Kim Nelson, the founder and CEO of Bank South Mortgage. This is a company with so much legacy and tradition behind it. And the fact that they picked you uh to you know help continue its success is a huge testament to you and also to Kim for being a very good judge of character. Hi, Kim.

SPEAKER_08 1:48

Hi, how are you?

SPEAKER_04 1:50

You're a legend. I'm honored to be uh to be here with you and and have you on the show. In fact, I met you in person for uh the first time at the Housing Wire Gathering. I don't know if you remember this photo that was taken. This is uh this is about a year ago in Colorado Springs, my colleague Latasha Wadi and these other fabulous women. And of course, you're in the background here. I snuck into this picture. And so thank you for letting me crash uh the all ladies party.

SPEAKER_08 2:17

That's right. Really appreciate it.

SPEAKER_04 2:20

Um so uh Aaron D, what do you think of Aaron?

SPEAKER_08 2:25

Uh-oh.

SPEAKER_04 2:28

What do you think, Kim, of our friend Aaron D?

SPEAKER_08 2:32

Okay, so I'm super excited about having Aaron on board, you know, because our vision today demands capabilities that we didn't need five years ago. And um, you know, her her experience level um aligns directly with you know the chief innovation officer role that uh we created, which you know transformation, workflow modernization, uh intelligent automation, scalability, and um with everything that she brings, and I know that we'll do great things together.

SPEAKER_04 3:14

I know, I know. Um your bank has been around for a really, really long time. Give us just a quick snapshot of the history of Bank South Mortgage.

SPEAKER_08 3:22

Okay, great. So Bank South um is our parent company. Uh, Bank South Mortgage operates as a wholly owned subsidiary. Our bank is 80 years old and it's family, it's family-owned, very much a community bank. Uh, the bank is growing, it is currently uh just under a $2 billion asset size institution. And um, they recently acquired um a bank and are looking to acquire additional banks, and they also partnered with uh Sequence Holdings, who has uh minority ownership in the in the bank. It's 15% ownership, and um that's all public knowledge, but um they are a um AI workplace uh environment company, you know, that just envision that single pane of glass that sits over all of your systems and all of your data and um allows you to be you know an incredible community bank and a community bank-owned mortgage company. So we're excited about all that that brings. Harold Reynolds is the chairman and CEO of the bank. I report directly to him. And um Bank South Mortgage was founded in uh on February 11th of 2011. I actually started Lone South Mortgage September 1st of 2008, which you'll recall that that was the same month as the big short. Um, and I grew it from a small brokerage company to a correspondent lender, and then um, you know, post all of the crazy regulations that came out, you know, from 2008 to 2011. I mean, I think there were at least a hundred new acronyms that came into the space, you know, MDIA, HIRA HOPA, um HBCC, you know, LOComp, Dot Frank. I mean, it just on and on. Um, I knew at that at that time, in order for me to continue to grow, that I would need to align with um a community bank. They actually were one of my warehouse lenders and they liked the way that I performed and handled myself. So um we started having discussions about becoming you know a whole hand subsidiary bank south and through an asset transaction that happened in 2011. And today we are a predominantly southeast uh mortgage company with approximately a billion dollars in annual loan volume. Of course, in 2020 and 2021, we were just over 2 billion. Um and we've we've purposely stayed the size that we are uh because of the size of the bank, but the bank is growing faster than we are currently, and so our 2030 vision is to grow the mortgage company to a 3 billion annual run run rate and 7,500 units. There you go.

SPEAKER_04 6:16

Well, you couldn't have a more lovely person than Aaron D to help you lead that charge. She actually told me the other day she was going to get you to 50 billion within two years. So Kobe, what Kobe, what what do you have to say to Kim before we let her go?

SPEAKER_05 6:30

You know, I I I think that I don't know Kim. Kim and I haven't met. I'm I'm looking forward to getting to know Kim as she now is a part of the extended No Surrender family. But I can tell you that even though I don't know you, Kim, the fact that you hired Aaron means everything to me in terms of your ability to judge character and and personnel. So great hire. Congratulations to you both um and looking forward to big things.

SPEAKER_08 6:52

Thank you. Thank you very much, and thank you very much for having me today. Thank you.

SPEAKER_04 6:57

I noticed uh I know just as a side note, it looks like you and Aaron are going to the same beauty salon now, too. I the hair is very similar. So I mean you're changing she's already conforming. I love it. Uh brand guidelines.

SPEAKER_08 7:08

Yeah, we will make sure we start to look like each other when you work together, right? I understand that.

SPEAKER_04 7:12

Yeah, we'll make sure that we keep her in line. We love Aaron D. She's a blessing to this industry, and congratulations on the hire.

SPEAKER_08 7:20

Oh, thank you very much. We feel very fortunate.

SPEAKER_04 7:23

All right, thanks for stopping by. We really appreciate that. All right, that was very nice, yeah. Uh, Erin, again, just one more time. Congratulations to you for uh thank you for the promotion.

SPEAKER_07 7:34

Kim is an incredible woman, and to have the opportunity to come and learn behind her and and and all the opportunities that that affords is is really, really exciting. So I'm a very, very lucky girl.

SPEAKER_04 7:43

Yeah, and I'm and you uh I know you love your Interlink family, so I don't want to leave that. I don't want to leave them out because I know that uh you love that place and you love the people there. So I'll give you a minute to opine on that.

SPEAKER_07 7:53

Yeah, it was it was a it was not an easy decision. The um, you know, Gene, James, Jason, everyone over at Interlink has just always been so incredibly amazing to me. That's probably one of the most well-run companies I've I have ever seen. Um, they're very diligent, they're very purposeful, and they have an amazing culture. Um, and and so I wish them nothing but the best. I will continue to be an Interlink fan, Team Interlink. Um, you know, there's just a different opportunities afforded to me through this bank south role that that I felt that I needed to take at this point in my career. And and so um it was very amicable, and I will continue to to cheer on everyone at Interlink from the sidelines.

SPEAKER_04 8:30

Yeah, you're not the only one that's out. How about Vishall Garg? Yeah, big story this week. We're gonna we're gonna segue, we're gonna slide on over there. Yep, yep. You you uh you have you mastered it. You are one of the first to ever slide on no surrender. But um a few moments ago, I had a chance to talk to uh Ryan Grant, who is the the uh co-founder of of Neo Home Loans, and that is, of course, the retail arm of uh Better. And you know, we talked about Vishal stepping down as the CEO of Better um just a couple of days ago. Um, this happened just moments ago. Here's what he had to say, then we'll get into it. Surprised that he stepped down?

SPEAKER_01 9:14

I was. Um, I think all of us were, right? We we didn't know. Um, we don't have a ton of uh knowledge of you know board conversations and that kind of stuff. We are head down doing what we know how to do. And so uh it was definitely a surprise. But I think when you when you look at the maturation of any mortgage company, right? If you look at the maturation of uh any company in general, not just mortgage company, like they have an arc, right? And the arc is usually someone with a crazy idea, right, takes it really, really far. But without like really disciplined operators, it kind of stays in that futuristic thing. And you know, he's a guy that is driven by what's next, what's coming, look around the corner. And I if anybody can can relate to that, it's me.

SPEAKER_04 10:00

Yeah, so uh I will start with you, Mr. Kobe Hackalir, the man in pink. You can't ignore the pink shirt. I love that. It looks lovely. You look good in pink.

SPEAKER_05 10:09

I wanted to bring a splash of color. I realized that all the clips we have, I'm wearing you know dark colors, and you know, and and I've and I realize it's now you know almost the middle of August. I should celebrate the season.

SPEAKER_04 10:20

Um maybe I should maybe I should share some white and lift my shirt up because that's it would be like Casper. Should I do that? Well, it wouldn't be a normal episode if you didn't.

SPEAKER_07 10:29

Correct. Yeah. We need to see splashes.

SPEAKER_04 10:31

I did show my belly button on the last episode.

SPEAKER_07 10:34

Correct.

SPEAKER_05 10:34

You did, and by the way, I want to I want to ask you how you're how you're doing after the uh recent spill you took in Iowa last week. I don't want to talk about it. Okay, crazy.

SPEAKER_04 10:44

I I slipped and fell in the Marriott at uh Fairfield, it's the Fairfield Marriott in Des Moines, Iowa, and uh the cleaning crew left about this much water on the floor in the hotel lobby around the bathroom. No sign, by the way. There was zero sign uh on the floor, like wet floor. I went around the corner and literally just hit my ass as hard as I've ever hit it and bang my head up again against the wall. They brought a manager in from the other facility and uh he said, What can I do for you? We feel terrible. I said, Well, you tell me what you can do for me. He said, Well, what I can do for you is tell the staff, you know, to put a sign up there and make sure they don't mop the floors when there's that much activity. That was his answer. That's good customer service, huh? Anyway, so yeah, I'm feeling fine. Thankfully, um, I walked away unscathed because I'm pretty tough guy. Kobe, man in pink, man in pink, what do you make of uh Vishal's exit? Uh Rich Swarbinski this morning said he's hearing rumors that he's trying to uh raise more money and that you know he's buying more shares and he's very much still in there. So I guess if if that's true and Rich's sources are usually pretty good, um, then you'd think that, you know, this is not an exit. This is maybe a pause. Um, but certainly it looks like the board was ready for a change.

SPEAKER_05 12:04

Yeah, this is a signal to to Wall Street to their investors. 11 straight quarters of losing money. Um, I think they've lost over $2 billion since their inception. Um, Vishall is very much still in the mix. He's still their biggest shareholder. He still occupies a seat on the board, he still has by a wide margin voting rights that that trump anybody else's. Um, so this definitely looks to be a Wall Street play where it's like, all right, I'm I'm handing over the reins and we're going in a new direction. Vishall's had a credibility problem in our industry for the last few years. There's no question about it. He came into this industry on the back of a bad personal mortgage experience, saying this process is broken, it does have legs for the future, and somebody needs to come in and shake things up. So he took on a adruptor role. Uh, when that proved to be a little bit more difficult than he anticipated, and as many who have tried to disrupt our industry have come to find out, he switched to let's be a facilitator, let's let's have Tin Man and Betsy embedded. Uh, and there were a lot of claims around Tin Man and Betsy, that Tin Man is uh, you know, 30 times uh less defects if you go through that process, that Betsy has a 40% reduction in origination costs, a lot of big claims. The problem he had, um, even though they did get a number of uh companies like Saxton Mortgage and Finance of America to sign up with them, the problem he had was that of just credibility. You can't spend a decade ripping apart an industry and then decide, well, now I want to be one of the gang and I want to and I want to be one of you. Um and the losses kept piling up from a money standpoint. And I think if the company had a chance to continue on, and I think they should have a chance because they do have some value and um they needed to uh make a change there, and that's what we're seeing here. So hopefully Vashal lets Dan Lewis do his thing as CEO, and Vashal finds a way to shake hands with the industry. Um, because I do like Vashal. I know you like Vashal too, and uh, you know, we we we I think there's a place for them in our industry, and I hope they find it.

SPEAKER_04 13:56

Yeah. I saw your post this morning saying that he needs more than just a PR tour, that he needs to get to know people belly to belly. I I'm gonna challenge you on that here in a moment, but first I'm gonna have our lovely colleague here chime in.

SPEAKER_07 14:09

Yeah, you know, Ryan basically echoed kind of what my thoughts were on this, is is they have lost money and it's and it wasn't just just out as CEO. They also announced a strategy change, right? Where they're gonna kind of get out of that lead funnel business. And also they added another 20 million to the to the cuts in expenses that they want to make this year, right? So it wasn't just the CEO change, there was a very clear strategy shift. And and I think where Ryan hit it on the head was that you you can be you can be a dreamer, you can be out there on your arc, but at a certain point your operations have to be able to back that up and you can't just continue to be a money pit forever. And you have investors, so you have to show how you are also running a responsible business that can that can exist in the long term. And so for me, I think think to Kobe's point, it's we have to show our investors that we're shoring things up, we're gonna operate in a way that that can actually bring returns to shareholders. And and and it looks like they're gonna kind of shrink and focus more on just the pure manufacturing the loan from start to finish and go rely on more traditional referral type type sources for their leads.

SPEAKER_04 15:12

So he's a trailblazer for sure. And he's not the first trailblazer, Kobe, to point out inefficiencies. That was the motivation behind his trailblazing. So, you know, whether it was a PR campaign or uh ill-communicated, uh, he took a huge, mighty swing. And uh most of the time, people like that, especially people as smart as Fashaw, their bedside manner isn't necessarily that of ours, right? And so I don't see him going on a PR campaign. I don't think he needs to. I feel like uh he um is a guy that has pushed the limits and boundaries. Tinman apparently is a good system. From I know people that uh have said that, um, that are not inside of uh of better. And um, you know, his his biggest folly was letting all of those folks, the way he let all of those folks go on the on you know the on the the days of COVID on at the onset. And you know, to his credit, um, he owned that. And so I spoke with the Shaw on on one-on-one um my podcast on Mondays at 1 p.m. on LinkedIn. I'm sorry, is it one? Yeah, it's one. Today's two today. What is today? Today's Thursday. Thursday. Anyways, but I spoke to him about 10 months ago and I and I listen, he didn't know this question was coming, but I asked him if he had any regrets about how we handled the layoffs. Here's what he had to say back then. Surprised that he stepped down. I was. Um, I think all of us were, right? Oh my god, Aaron. I did that for you. Just stop laughing at me. Quiet, quiet, quiet. This is why I asked about the head injury. Yeah, so thank you very much. All right. Yes, Ryan and Vashal look like twins. Here is Vashal.

SPEAKER_03 16:50

I totally fumbled that. I didn't do a good job of being, you know, an empathetic leader to the people that were letting go. And um, you know, there obviously were major decisions that I had to make at that time, but I could wish I had done it differently.

SPEAKER_04 17:08

I mean, there you go, man. He manned up, it's over with, he can move down the road. I mean, is he the best people? Is he Ryan Grant? No, but that but he's gonna innovate at a level that very few in the industry have in terms of their losses in 11 straight, whatever you said, like, yeah, they're a tech company, they're not a mortgage company, first of all. So let's understand that. And if we start judging tech companies based on profits and losses, uh, we would be criticizing more than the majority, you know, we'd be we'd be criticizing the majority of tech companies out there.

SPEAKER_07 17:35

So well, but their strategy changes more acknowledging that they're a mortgage company, not a tech company.

SPEAKER_05 17:41

Yeah. And by the way, I I didn't I didn't say he should go on an apology tour. I said that that's not going to cut it. I said he doesn't, I don't think he needs to do that. I think what I think I laid out three things that I think he needs to do. I think he lets needs to let Dan Lewis do his job. Um, I think they need he needs to create more relationships within the industry. And I think they need to verify some of the numbers around Tin Man and Betsy and really show what the value prop is rather than just bold claims. We are an industry that gets inundated by vendors around us uh that talk about bold claims and statistics that don't really bear fruit. And I think we're all kind of inured to them at this point because we just listen to them as noise, the sponsored content, white papers that just are all over the place. So I think putting some validation to that, and I think that's what moves the needle here, not him necessarily going out and apologizing to everybody for being brash or for calling his operations people dumb dolphins or whatever the word was.

SPEAKER_04 18:32

Yeah. So he's making a huge bet, right? And I still question whether or not these bets that are being made by all of uh these forward thinkers are even going to come to or are gonna hit pay dirt, are they gonna get into the end zone? And that goes down to Rocket, it goes to Bayview, it goes to all of them. To me, the jury is still very much out. And I'll just take this moment to thank Housingwire and Zeb, Zeb Lowe and Diego, and and Clayton Collins for inviting um the three of us on stage um at an upcoming conference, uh, which you know we can highlight here shortly, but the the the title of it and it's it's sort of all wrapped around this idea of are we at, you know, we're at this point where the industry is going to change forever. And I said to Zeb yesterday and we were uh talking about it, I'm like, I think I would dispute that. I'm not sure. I think there's a better chance that the flywheel's not going to be a thing, that these bets aren't gonna pay off than they are. So if you want to just comment on that, you know, quickly, and I'm really looking forward to being on stage doing a live no surrender at Housing Wire. And Aaron, if you have the dates on that, it'd be great if you pull them up. I think it's October 1st, maybe.

SPEAKER_07 19:41

October 1st, yeah.

SPEAKER_04 19:42

Yeah. In Dallas.

SPEAKER_07 19:43

In Dallas, Texas, at the I believe it's at the George Bush Presidential Library.

SPEAKER_04 19:47

You know, what we need is a no surrender code. I'm serious to get a discount for people that uh join. And we're gonna have a uh we're we're kicking around the idea of having a FOTS dinner. That's right. Friends of the show. So we're gonna have a lot of details. It's gonna be amazing. We'll have swag. We're gonna have it all. Uh, but if you want to touch real quickly before we get on to immigration uh as a major housing headwind, uh, Aaron and Kobe, go ahead.

SPEAKER_07 20:10

Yeah, I mean, you know, I I just think that this whole industry is just going through a whole paradigm shift altogether. And you know, I think we'll talk about it a little bit later in the show. What's going on with Penny Mac, with Zillow, things like that. And so, you know, I I do think that we are seeing some structural shifts starting that are going to continue on for the for the next several years.

SPEAKER_05 20:29

I mean, we're always at an inflection point in this industry, aren't we? There's always there's always something changing. There's always something that we're dealing with, whether it's regulatory pressure, um, new compliance rules, whether it's the the talking out of both sides of an administration's mouth about the need for housing and and the topic we're about to discuss, immigration rules. Uh, we're always dealing with something that is impacting the future of our business. Right now, you can point to five or six major things, major headwinds that we have. And you can, I don't even have to include interest rates or oil prices in that. I can talk about five or six things that that are that are headwinds. Um, it's part of what makes our in our industry exciting and interesting um and what drives passion for a lot of people. But to say we're at a seminal moment, we're always at a seminal moment. And that's what makes this industry great, and that's what makes this you know so important of a discussion right now, just because we do have, I think, some more headwinds than we maybe had, you know, a few years ago. But um, you know, I just feel like that's the norm for us. The change is constant.

SPEAKER_04 21:26

Yeah, and here's one, here's one of them, Aaron. South Texas will never be read again. Home builders warn GOP over Trump's immigration raids. And Aaron, we're starting to see this policy bleed into housing. We've got workers not showing up on sites, which is delaying projects, which is inevitably going to raise the price of these homes that are being constructed. Just how big of a headwind is the immigration policy turning out to be on housing?

SPEAKER_07 21:53

Well, it's I think it's conflicting. Is it's a headwind, and it's also conflicting, right? Because he's got, you know, the road, road out. The executive orders, all of that as hey, how do we eliminate red tape? How do we make it cheaper to build? But then when you are looking in certain in certain areas, specifically, let's think about Texas, right? Um, they they rely on a large portion of their labor as immigrant labor. And so now when you have ICE, who, you know, when President Trump campaigned, it was all we're gonna go after the dangerous felons, the murders, the rapists, all of that. And what it's really turned into is job site raise, or just another one at California, I think, yesterday. And so you have now where workers are afraid to show up, they've they've mass deported these workers. And so the South Texas Builders Association recently came out and said that not only is this taking is this adding um month, a month to two months to uh building homes, it's adding $10,000 to $20,000 in costs. It's taking longer for permitting. And so what we're seeing now is the results of this this immigration policy being enacted in a way that is completely going against all of the housing policies that he's trying to put out as well.

SPEAKER_04 23:06

Yeah, there's two numbers to back onto that, Kobe. Uh the uh the credit box tightening a little bit, which I know you've pointed out um succinctly in the last couple of weeks, and it's very conflicting crosswinds.

SPEAKER_05 23:18

Well, not only that, there's there's a few numbers here, plus the fact that the the whole ability to repay rule has been expanded to include loan officers and mortgage companies being allowed to consider immigration status and who we who we lend to. That doesn't just impact ITIN loans, that impacts every loan if that becomes part of the conversation. And that's and that's something that we'll have to see how loan officers and banks respond to that in real time in the coming months. But there's two other numbers here that I find interesting. According to the survey, over 40% of contractors have either postponed or canceled a job because of either cost or inability to find labor or materials. And that speaks directly to the to the jobs and the and the tariffs right there. Uh, in addition to what we know are already very cumbersome permitting and zoning rules that go along with building a home. The other number is 349,000. And the 349,000 is the net new construction jobs that we need to fill in the next year. That is not merely from people getting deported, that's also people retiring out of the business. Every year, people get older and the new wave of people have to come in and replace them. That's just how they're gonna be able to do that.

SPEAKER_02 24:17

Hello, no surrender. Uh Brendan McKay here to talk about.

SPEAKER_04 24:21

Go ahead, keep going. Sorry. No, that was my that was actually, bro. That was actually my phone landing on my mouse and clicking left on Brenda McKay. Um, you know what? I'm always up. I'm gonna lift this up. Look, that's what happened. See that? Oh, a reverse slomo. I love it.

SPEAKER_05 24:38

Yeah, thank you. All right, yeah, go ahead, continue. I'm sorry, bro. Uh no, that's okay. Um, you know, we we simp if we keep deporting the people or not allowing people to immigrate into this country that take these jobs, then we're going to have a massive problem with building homes in this country. And and what is that going to do to the cost of homes in this country if we're not increasing the supply? We all know the answer to that. Um so you know, the we're getting squeezed from three different angles here from the ability to repay rule, from the tariffs, and from the construction labor. And all of these things are flying in the face of what the administration claims it wants, which is easier and more affordable access to home ownership. So um I think it's uh it's the other side of the coin here that that needs to be discussed in greater detail and needs a spotlight.

SPEAKER_04 25:19

Yeah. Yeah. Aaron, Aaron, for sure, Kobe's pointing out some great things um that are impacting the industry. Also, lower birth rate, condo uh changes now in like these things are not helping.

SPEAKER_07 25:31

Yeah, yeah, exactly. And and so it's to the point where you're actually seeing on the immigration side, Republicans in Texas are now going to Trump and saying, like, you've gotta, you've gotta chill out here. You're hurting us. We're not gonna support these policies. We we want we voted for you because we wanted to have the dangerous people gone, but we need to have a pathway for people who are here that are that are um you know abiding by the law, doing good work. And so that's a complete shift from the what the Republicans are saying as well. So, like this, this whole thing is just it's got a lot of different tentacles that's negatively impacting housing and giving us headwinds here.

SPEAKER_05 26:08

Yeah, one other question, Bobby. That's go ahead. Larry Silver Larry Silver wondering if you need to enter into the concussion protocol.

SPEAKER_04 26:14

I think I'm very much in it. I think anyone that's been watching for the last uh 26 minutes and 18 seconds knows that I'm deep into it. Thank you, Larry, for pointing out.

SPEAKER_07 26:23

You can help Styles give you a CTE consultant consultation if you want.

SPEAKER_04 26:26

Well, I appreciate that. You you know, you you know a lot of uh former NFL football players. Uh hope is on the way. Yep, with apparently good hands. So you know the good hands team. So uh yeah, if I need help, I will call on it. Um, I think this is a perfect time to ask the question here, Kobe. Is Trump is he just basically bailing on uh the midterms? Is he is he giving up? Is is his final act going to be something that we're not even imagining right now? Double click on this for me.

SPEAKER_05 26:55

Yeah, I think I think there's there's the public uh there's the public persona that he's putting forth, and then there's the private. And I think publicly, I think he's he's got to start pivoting past the midterms because it's looking more and more like the Democrats are gonna take the House. Um privately, though, they're putting him out on the campaign trail. He's still trying to raise money for Republicans, he's still trying to press on it because privately he knows that if the Democrats get into the House, one of the first things they're gonna do gleefully is impeach him. Um now, that's never gonna go anywhere. He won't get convicted, he's gonna need 67 votes in the Senate to get that done. They'll never get it. They didn't get it the first two times they tried it, but it is a major distraction for him. Um, and it does dilute his power a little bit. Um, and also it's uh it's a loss of face a little bit to get uh called out like he would be in an impeachment. So I think there's the public persona, which is, you know, uh uh, you know, what's more important than winning in November is making sure this company, this country stays on track, is making sure Iran doesn't have a nuclear weapon. He's been doubling, tripling down on that over the last few weeks. Um, talking about how that's even more important than the economy. He's trying to sell Americans on the fact that Iran having this nuclear weapon is more important than whatever pain you're feeling at the pump or with your take-home pay. Um, but I think privately he's he's worried about losing face. He's worried about becoming a lame duck president in the second half. Um, there's been some talk that the focus is going to shift to pardons and to other money-making uh and and king-making ways that he can still retain control of the Republican Party. Um so I think it's interesting to watch as it comes. I had thought over the last couple of weeks that he would try to wrap up this war by the time of the September FOMC meetings to try to maybe at least not get a rate hike to keep things uh as they are, because we know three different uh Fed governors voted for, Fed presidents voted for uh the rate hike. Um, but I'm I'm I'm thinking more and more it's looking like it's it's uh it's gonna be Iran all the way, and that's the play.

SPEAKER_07 28:46

Yeah. Yeah, and it's you know, back to Texas again. I I spent the week with the Texas Mortgage Bankers Association, so I have fresh Texas on the brain, but a survey, uh TSU survey just came out this week that showed Talerico is ahead two points over Paxton, and that's that's big trouble for the Republicans in Texas, right? And so so that's that's not good news for them at all. And if you look, Trump's favorability, specifically with Latino voters, went from like positive 14 points to negative 20 something points. It's absolutely insane the shift that he's had. So he he is in big trouble, and I think that it's clear when you look at his tweets. He just had one out yesterday that was like, don't believe the Democratic polls, it's all fake news. Everyone loves me, the economy's doing great, save money on taxes, we're getting Iran out of nuclear weapons, all of this stuff. And so it's just more of obviating. Um, and it's more bloviating from Trump. But I think that the more he's going out just shows he really is sweating it because sure, he can go and resort to executive orders if he wants to, but those executive orders are gonna be turned around on day one if the 28 election does not go the Republicans' way, right? And and the problem is we've been really working in this industry to try to get those executive orders that are good to become permanent, specifically with the CFPB, right? And so now if he's just gonna spend the next two years giving out pardons and executive orders, that's just gonna be even more regulatory upheaval for us that we are gonna have to deal with when it eventually will shift back again if not made permanent. And so that's my concern is if he, if he, if and when he is going into his lame duck two years, what is going to be the trail of destruction that we will be left cleaning up with EOs and and all these other temporary measures?

SPEAKER_04 30:33

Well, you just wonder when the party's gonna break from him. Like when is he gonna lose control?

SPEAKER_07 30:37

When well, I mean, Tucker just announced his new party this week.

SPEAKER_04 30:40

Yeah, like when is the juice uh not going to be worth the squeeze anymore for those people that are trying to ride his coattails? You know, I think you already see you already see JD Vance. You know, he's already separating a little bit, yeah, hinting that maybe you know he was never in favor of the war. You can already you can it's probably only a matter of time till he starts getting dumped on by him.

SPEAKER_05 31:02

You know, we know we know what happened to the last vice president.

SPEAKER_04 31:05

It depends on the too. Why are you taking my words out of my mouth?

SPEAKER_05 31:08

I'm so sorry.

SPEAKER_04 31:09

It's very rare I have something poignant to say, and here you are taking one of the probably three salient points I was gonna make right out of my mouth. I feel terrible. Do you mind putting do you mind putting it back in my mouth, Kobe?

SPEAKER_07 31:21

That's for after the show.

SPEAKER_04 31:22

I would I would never say no.

SPEAKER_07 31:24

Kobe, you're we never have yet.

SPEAKER_04 31:26

You're amazing, yes. You are undefeated when it comes to that. Um, hey, you know what? Uh you were you talked about uh the CFPB, and you know, I didn't have the exact place to drop this, but um they are currently seeking comments. Um and our good buddy Brendan McKay is uh you know has has helped with the uh CFPB RFI uh response. Um, and we're gonna play what Brendan has to say. I'm gonna do that right here, right now. Aaron, do you want to tee this up?

SPEAKER_07 31:56

Yeah, absolutely. CFPB is uh is asked for for information on changes to trade, to rescision. Um, Mortgage Bankers Association, I worked with them on their response, and it's a good opportunity for us to give feedback. So let's hear it from Brendan.

SPEAKER_04 32:08

All right, let's hear it from Brendan McKay. He heads the Broker Action Coalition. They're one of the best uh lobbying groups we have in this industry.

SPEAKER_02 32:18

Brendan McKay here to talk to you about some potential uh trade rollbacks that the CFPB is considering. So back in July, the CFPB put out a request for information, an RFI, um, asking the industry for feedback on uh the put potential of rolling back certain aspects of TRID. Now, the back, uh, the Broker Action Coalition will publish its full response next week. Um, but I wanted to go over some of the highlights uh for you guys today. So there are four main things we're asking for, and one idea that we're kind of pushing back against, and I'll start with that. So there is a little movement around the idea of getting rid of the three-day waiting period from C D D closing. And while that certainly would make our lives a little bit easier, um, we believe that it opens the door far too wide for the potential of beat and switch, um, which if you were in the industry back in 2005, 2006, you knew was a very, very real uh thing that was happening. And and we don't want that. That is bad for everybody. But there are four things that we are asking for. The first and foremost is moving lender credits from box J on the loan estimate and closing disclosure to box A. This would not only uh paint a clearer picture to the consumers on what their actual financing costs were, um, but this is a massive deal for brokers and wholesale, especially on borrowed paid compensation loans, where the APR calculation is currently broken. Um, if lender costs count towards the APR calculation, lender credit should also count. Pretty straightforward. Um, we're also uh asking to get rid of the three-day right of rescision on primary residence refinances. Um, before the three-day trade waiting period, this made complete sense, but now it it doesn't really provide any uh uh uh additional protections for the consumer and and results in longer locks, more lock extensions, and all these additional loan costs that would be better to get rid of. Um we also want the uh electronically delivered disclosures to be considered received upon delivery, not upon acknowledgement. If you've ever worked in operations at a closing department, you know how much of a pain in the ass is trying to get borrowers to sign uh e-sign disclosures at before midnight on a Tuesday. Um and lastly, we are saying keep zero tolerance um for lender-related costs when it comes to cures. But as far as third-party costs, give a little flexibility. If the settlement company provides us the wrong number for transfer and recordation taxes, that should not be on the lender uh uh to cure, um, which I think we all can agree is reasonable. So um uh pay attention when you see these responses come out, read them, talk about them. Proper advocacy requires your participation. Um, and that's it for me today. Thanks, Greg. Uh, thanks, Kobe, thanks, Aaron, back to you guys.

SPEAKER_04 34:45

What a correspondent he is. Uh by the way, he's he's on vacation. He looks like 10 years younger.

SPEAKER_05 34:51

He's got he's got the poof in the hair. He's looking like he's in summer camp. He's got, you know, I like I like digging the shirt.

SPEAKER_04 34:57

It's all working for him. What do you think of waiving the three-day rate of rescission, Aaron? What's your opinion on that?

SPEAKER_07 35:02

So I'm actually in favor of that as well. And I know that in in working with uh Mortgage Collaborative and uh on theirs as well, I believe that was part of our response, um, waiving that because you already have the three-day wait. One thing that he did not mention that I know has been part of some responses as well, was having more clearly defined where you can actually waive, you can the borrower can waive that three day. Um, he said he wasn't in favor of changing that, but um I think other industry trade groups have said, hey, the where you can say this isn't a bona fide emergency to waive the three-day from the CD receipt, um, is putting more rules around that to where you could actually provide a path for a borrower to be able to waive that. And so I know other industry trade groups have said that they would like that. Um, and then, you know, but I do think just generally speaking, there's some good area of opportunity for improvement in these roles.

SPEAKER_05 35:49

It's it's always been so frustrating to me that things that make such common sense require such bureaucracy to get done. You know, last a couple of nights ago, my daughter wanted a sleepover with her friend. And the sleepovers during the week, during the summer are always difficult for me because you know, I got to get up in the morning and the kids are up all night. And so I put some ground rules, which I actually put on LinkedIn and it got like 50,000 views. But the ground rules were like, no door dashing at 11 o'clock at night, respect each other, don't wake me up unless there's an emergency, like basic common sense things. I didn't have to submit a request for information to her. It was just like, here's common sense, just do it. Why can't we just do it? Nobody's against uh, you know, putting the borrower credits as part of the APR, nobody's against the right of precision where we already have the Trit stuff. Like, these are just such easy things. Why do we have to waste our time with this process? It's so frustrating to me.

SPEAKER_04 36:40

Yeah, it's kind of like it's kind of like when uh you know, when I'm it's discovered that I'm in the closet, you know, which um I eventually I I eventually came out of the closet, just so everybody knows. I didn't stay in here, but this was our this was our pre-production meeting uh on I guess Monday. I was I just I had just gotten back from a trip. Uh shout out to my son for winning the gold medal in the AAU Junior Olympics, his 13 and under team. I should pull up a highlight actually. Absolutely. I might send you a highlight of my badass 13-year-old making a one-handed catch on a bullet. But I was in the closet here, and Kobe uh he coaxed me out of it. So I'm officially obviously out of the closet and now in the studio. So I really appreciate that, Cob. Uh, do you guys know what this is? Have you seen this?

unknown 37:28

Yes. Yeah.

SPEAKER_04 37:32

Yeah, at Camp David. Uh they they all got together recently for some high-level meetings. And and Kobe, what are we looking at here?

SPEAKER_05 37:38

Uh, we're looking at a note that Bessent wrote himself to bail out the Japanese, which we've done before. I think the latest time was in 2011. Um, but uh, you know, the Japan has been in in just uh decades long, uh, decades-long issues with their economy. Their interest rate right now is at, I think, 1%, which is their target rate, which is what, 250 basis points below our target rate. Um you know, the the issue that we had here and why this is related to mortgage is because people were borrowing against the yen and buying treasuries, or and and and uh that was that was one thing that was putting pressure on on their economy. The other part was if they were in a need for cash, guess what? They are the largest, one of the largest holders of treasuries, like a trillion to a trillion four, and they would have sold all of those treasuries or a good chunk of that to bail themselves out. Um I know Aaron has a lot to add on this because this is this is a story that she brought up, but um I did the digging that I did into this, it just uh it looked like a good opportunity for the United States to get involved and to alleviate some of the pressure on Japan. They're they're at a 40 year low in terms of their the yen to the dollar. Um and uh I think it just it just shows to me what it really spoke to and the way that Bessin uh or orchestrated this, which was to to dump euros to buy yen. I thought that was that was pretty clever the way that you orchestrated that. This was an opportunistic uh way to save our bond market, but also help out an ally. So I like the fact that we did this. I like I like how we did it too. Um, but I think it also speaks to the fragility of our markets and how important it is to get things right. Because if you look at what Japan has been through, not just not just the fact that their target rate is 1% and all the inflation that that's led to, um, but the fact that their um debt to GDP ratio is like like 100 basis points higher than ours as well. They're they're in real trouble. We've been talking, I know each of us have had conversations about our national debt and the $9 billion of interest that's being added daily.

SPEAKER_04 39:34

Um and well, we're just a hair under 40 trillion, Kobe. Um Japan's in worse shape. In in two weeks, we're gonna be at 40 trillion the deficit. Aaron, I I know you you have a lot to say here. Uh I'm gonna make you wait another few seconds. All right, I'm gonna totally change. I always am here. Here's Scott Besson on what the hell he just did.

SPEAKER_00 39:56

Stable yen is not only uh important for the the US, but it's very important uh for the entire region. Because if the yen were to weaken substantially, then the other currencies uh would follow it. Understand that they are making serious efforts to uh stem the un substantial undervaluation in their currency. We believe that they are going to uh continue to put the right policies in place that will lead the yen to get back to more of a normal equilibrium price.

SPEAKER_04 40:27

Yeah, I mean that's not sustainable though, Aaron. He can go in there and go into the well once, maybe twice, maybe three times. But if this is what's gonna keep uh, you know, treasuries from going to uh you know eight or nine or ten and rates going just as high, uh they're gonna have to come up with something different. I don't know. So so you you were really, you were really, really all over this this week. You were dying to talk of it. I know you're bursting at the seams.

SPEAKER_07 40:53

Yeah, because there's so many different layers to this story that I think is so cool. First is there's a cautionary tale here, right? If you go back to 1999, the Bank of Japan was the first central bank to go to a zero interest rate policy. And then in 2001, they were the first central bank to do a form of quantitative easing, right? And they had just have just been injecting. So basically, this the Bank of Japan has been buying half of its own securities for years at zero percent interest rate. And so outside investors who want to or if or people who are in Japan that actually want to earn some sort of premium or some sort of rate of return on their savings have gone out to Ginny May securities, to treasuries, to agency bonds, for and they they to you know to Kobe's point, not only are they one of the largest treasury investors, but they were also one of the largest holders of Ginny May securities because they've had to come come out to actually earn interest. The problem with having a zero interest rate policy, when inflation starts to hit your economy, like what has what has happened over the last several years with Japan, they are seeing the same inflation that we're seeing. Their dollar has been completely devalued and gone down to the point where they're in crisis mode. And so, to what Kobe was saying, they could, in order to buy more yen to try to pump up the value of the yen, they could sell all of their treasuries, dump and flood the treasury market, increasing supply, dropping prices, and increasing yields. Numbers that I've seen would have increased the tenure by up to 50 basis points, right? And as much as Logan Motoshami likes to hug a spread, that still is gonna have an ugly response for us, right? And so Besson intervened so that we didn't dump, so that we didn't tank our own, or you know, our own tenure wasn't tanked. Instead, he went to Euros and he sold Euros and impacted the EU to buy yen because he does think that holding yen is a valuable um is valuable for us because he does think that that it's undervalued and that it'll eventually be a good asset for us to hold. But the long story is that that's not sustainable. I think we almost completely exhausted our supply of yens that we had or of Euros. And so, where what's the next step? And I think that's where the really interesting part of this is is what's the next step? And so they have actually said that they going forward will allow Japan to use the FEMA repo facility, which is basically similar to what our banks had, where they can go pledge treasuries overnight, get dollars, and then sell them back, right?

SPEAKER_05 43:15

They have to raise the cap significantly on that, though.

SPEAKER_07 43:17

Correct. Exactly. The cap on that is only like $60 billion per institution. So in order to do that at the level that Japan would need, they would have to completely raise that. So are is that going to be the next, the next step that we're going to do? Because then that would kind of untether the yen with our bond market. But again, how much are we going to extend? At what point are we going to continue to do that? But then the other step is now that all of these other nations have seen us unwilling to step in with the US dollar, we had to leverage the euro. Now people are calling into question our, you know, further our ability to have US dollar as the world's reserve currency. So this story has just brought out so many questions that I just find it completely fascinating. And we have not seen the end of it.

SPEAKER_05 44:00

You know, to me, to me it's also really interesting because, you know, we we've seen the president over the first two years of his term rail against uh Jerome Powell to lower interest rates, lower interest rates. We want to see and and what we're what we're learning as we start to see these levers being pulled is that it's not that simple. This is truly a global economy. I mean, we're we're selling euros to buy yen, people are borrowing yen to buy US Treasury securities. The Japanese have a have a lever over us where they can sell all these treasuries and really tank us. The Chinese are importing less oil from Iran, which makes it easier for us to put pressure on Iran. I mean, all of these things are so complicated and so interconnected that politicians' speaking points about we want lower rates and we want more housing, it's it's all fluff. There's so many more layers to it. And this just illustrates exactly how not even exactly how many, but just the tip of the iceberg.

SPEAKER_07 44:49

Yeah, it's a cautionary tale. Like you look at how long ago they went to ZERP and they they did QE way before we did, and now look at where they are. Like, I think we need to be paying attention to this.

SPEAKER_04 45:00

Yeah, we've never been in a more chaotic moment politically across the world than we are right now. It doesn't seem to be getting any calmer. You have little wars popping up everywhere. Who knows if China's gonna be next? Um, you know, if they're gonna go in there and grab Taiwan. So um, I mean, there's a there is a lot going on right now. You know, Russia-Ukraine doesn't seem like that's coming any closer to ending.

SPEAKER_07 45:22

I mean, Russia, Ukraine's getting involved in Iran.

SPEAKER_04 45:26

Yeah. I mean, it's it's it's wild. Kobe, you're right. Like when you peel back the layer on the demand of lower rates, it's just not that simple. There's way too many uh overhangs here, and they have much greater significance and consequences than uh a rate move lower by 50 basis points, which it doesn't seem like we're gonna get that. If anything, it seems like we might be heading in the opposite direction. And uh, you know, in terms of the mortgage industry right now and where we are, I think a lot of folks thought uh by now that we would be cruising, and yet here we are still, because of the war, largely in a position where pipelines are starting to really dry up, where you've got the spring market coming to an end. Last week we talked about all of the movement in the space with recruiting really picking up to a fever pitch that I've never seen before. And now this yesterday, Zillow um with 500 layoffs announced, I know a few people that were let go in that. Um, and so we're seeing uh more consolidation as well. Um, yesterday, um Mason McDuffie getting swallowed up by Envoy. Um and the question is here, huh?

SPEAKER_07 46:35

Penny Mac.

SPEAKER_04 46:36

Yeah, I mean the qu the question is, is this just the beginning of another uh you know preemptive cold winter when it comes to layoffs? And I obviously um I'm gonna say that it is, that that are gonna be, we're having uh not a lot of conversations about it, but I know other lenders that are. Um and if you've not used the period of time when things got a little bit better to figure out how to scale and turn the dial up and down overseas, for instance, which we have, um, then you're left with looking at your roster, right? And inflicting more pain on the people that are uh serving the customers that you serve. And it's a it's gonna be a sad, I think it's another, we're we're in for another sad moment in time, uh, Kobe, where there are gonna be more significant layoffs in this industry if something doesn't change dramatically. Now, if the war ends tomorrow and uh we start to see more cracks in the economy, then maybe we can see uh the 30-year mortgage go down to six and a half or a little bit lower, which would give us the relief we need to maybe not lay people off. But I I don't think you'd bet that way right now. I think you'd bet the other way.

SPEAKER_05 47:39

Yeah, I mean, we're already down 40% as far as our workforce from you know 2021, 2022. I mean, so I think there are companies out there that are still able to lay people off and and and they have some room to right-size because maybe they came into this year expecting rates to be lower than they were, and many of us did. So that's that's you know, that's that's part and parcel of this business as we come in with some expectation and we we're exiting now with a very different year. Uh and I say exit because we are in the sunset of this year. We're heading school starting soon. My daughter starts school on Monday, then you go right into the holidays. So the the super strong buyer market part of the year is over. It doesn't look like we're gonna get a refinance part of this year at all, at least not for the rest of this year. Um so I I think there aren't that many companies left that can right size. I think the the question is, are going to be more companies like Mason Mac that just decide, okay, well, it's time to cash in our chips for what they're worth at this point and see if we can scale that way. Um, I think if you look at over the last couple of years, there have been far more uh mergers and acquisitions deals going on in mortgage than there have been mass layoffs. So I think that's been the trend, and I expect that to continue. Um, you know, and we're gonna see a lot more of those deals. Mason Mac, I mean, that's that's a relatively mid-sized IMB, 100 LOs, a billion dollars in production. We just saw New Res offload their origination arm, which was almost the exact same size to American Pacific and Synergy One. Um I just feel like there are more deals like that. And if you look at who Mason Mac went to, Envoy, Envoy is a mortgage that has vertical integration with a real estate company. And I think you know, we're starting to see who's emerging as the people that are making bets in the future that can actually win some deals. Um, so further, further evidence that the future of this business is that full stack customer flywheel.

SPEAKER_04 49:28

No, that people are betting on it. That's the only evidence I see. Not that it's gonna work.

SPEAKER_07 49:32

Well, if you look at the if you look at the details, I mean, if you dig into what Penny Mac and even Zillow, you know, they're not necessarily telling the story of it's it's really bad here and we're dying. It's hey, we've implemented all of this AI, we've achieved this very specific uh level of efficiencies, we've cut our closing times from this to this, this to this. Um, Zillow talking about use of their AI chat and how it's increased. And so I do think some of this is are we starting to finally see where you know this is going to be more of a slow bleed versus big layoffs where companies are finally starting to achieve some level of efficiencies with the AI investments that they've been making, right? I mean, part of Penny Mac said that their their their lackluster financial performance was due to investments in AI. We know all know about Zillow. Um, and so, you know, I I think some of this might be, hey, these companies have doubled down, have invested, and they're now achieving the the efficiencies where they're they we are gonna see more of a slow bleed. But I thought something was really interesting in the Penny Mac numbers is they basically said they completely pulled out of correspondent out of out of agency correspondent purchases, I think in June, um, which is insane. I mean, they're usually one of the biggest aggregators out there because the competition from Fannie Freddie Cash window has been so good, they just stopped buying agency loans altogether. So is that gonna continue and are we gonna see more consolidation in that in that correspondence space, right? Because they're getting all of their efficiencies on the broker side and on the consumer direct side. So, where, you know, are we gonna start to see some cracks form in that correspondence channel, especially if it's Fannie and Freddie are sharpening their their pencil with the the you know the co the co-issue extra.

SPEAKER_04 51:12

In other words, they they may cut off a revenue, a big revenue stream for companies uh if the government's holding more of that bag. And that could put pressure on them. That's interesting. Yeah, Kobe, anything more on this? Nope.

SPEAKER_05 51:24

I think you know, we're we're you know, we're I think we're gonna see a lot more of this happening over the next few months. I think the second half, which we're already, you know, five weeks into, is going to produce a lot more consolidation and MA deals. So I'm I'm expecting a robust season and a lot for us to talk about over the next few months.

SPEAKER_04 51:41

Dude, I just want to say uh this has been hell for four or five years. Never felt any any more hot hell than this, having been in the industry 30 years and been a part of so many ups and downs, all the head fakes. We finally get to that moment where we just know it's coming. Rates are heading down below six percent, and then the president that said that he was gonna be the one that stopped all the wars starts a war, and here we are at six and three-quarters. It's it's unbelievable. And restarts it every week.

SPEAKER_09 52:09

Yeah.

SPEAKER_04 52:09

And and there are uh, you know, there are companies that are suffering out there, and you know, we're gonna take a look right now at one that may be suffering. Uh, I mean, certainly their stock prices, and uh this post by uh Mike Cortis from from Nexa. Um, wow, I mean, this was on uh Facebook where Mike took the liberty to uh take you know a pretty open out in the open shot at Lone Depot whose stock price on July 30th fell 30%, uh down 90, I'm sorry, down $30, 90 almost 97% down to under a dollar, which is the danger zone for any publicly traded company. Um, so which one of you wants to take this? And this is the sorry post, and then I'm gonna show you the sorry not sorry post. Actually, this was the shot. Then there was the sorry, not sorry post.

SPEAKER_07 52:59

Well, you know, I you know, I think this is just yet another doubling down of uh it's it's like there's this effort to go after Lone Depot. Recently there was an activist shareholder coming out and saying that they needed to, um, that they needed to sell the company, that the performance is not what it should be. And so um Lone Depot right now, it just feels like they're kind of getting attacked from from multiple angles, um, this being the latest one.

SPEAKER_05 53:23

I couldn't help when I read this to think about the public fight you had a few weeks ago with the recruiter who was making calls within the house talking about how NFM is uh cutting off 25% of the staff. This is the public version of that. Uh your house is on fire. Um come over to us. Here's the incentives. And if they go after you and sue you for coming over to us, we'll pay all your legal fees. Um, you know, I I have I have certain feelings about this one, the way I I had about uh the guy who who you know called your uh loan officers. Um, you know, I I just I feel like we need to do a little bit better than this in our industry than tearing each other down publicly and and and making these kind of claims about stop risking a sinking ship at a bad company. I'm not even sure what pun he intended there. Um, you know, and I like Mike Cortis. I like I like the guys in our industry that are brash and bold and brazen, but do it by being innovative and do it the way Cortis has done it over the last few years, which is doing things in the broker channel that nobody has done before, getting into servicing, um, the the compensation stuff that he's done, growing the company to 3,700 loan officers while having a public fight with his partner and getting through all of that. Um, the the real estate company, he's done so many cool things. And and I just feel like this is just unnecessary. Uh, and I think it brings the wrong kind of attention, and I think it sends the wrong kind of message about how we want to recruit loan officers in our industry.

SPEAKER_04 54:50

Yeah, and then he goes on to say they want to go back into wholesale talking about Loan Depot, but are stupid enough to sue the largest brokers for the exact things they are actually guilty of. Uh, they are literally the bully of mortgage. Meanwhile, Mike uh built a lot of his success on the back of UWM. And we know what UWM did with their all-in mandate, right? Like they they that's exactly what they did. They bullied, and Mike has been a staunch defender of them. So there is some hypocrisy here in here, and I I too like Mike, by the way. Um, so this is his, this is this to me is I just had to chortle at this.

SPEAKER_05 55:25

Um it's basically I didn't I didn't know you chortled.

SPEAKER_04 55:29

I I chortle often. Um this is his uh sorry not sorry, um, where you know he talks about how he's trying to be, you know, at Mike 2.0 and instead he was Mike 1.5. Um so you know, and then he goes on to say, I actually praise Lone Depot. Look, um I gotta say, look, let me pivot off of this for a moment. Um Anthony Shea Um where is he? Like where this is the guy, this is a guy that was the first to step out onto LinkedIn. He was the guy that was always on CNBC, he was the guy that championed the industry. Um, I think part of Lone Depot's success came on the back of his courage and his voice. I never see it anymore.

SPEAKER_05 56:14

I don't know. Well, why did he come back? Why did he come back? He came back because he wanted to bring back his name and and take Lone Depot back in the right direction. And ever since then, other than claiming they're getting back into wholesale before the 2025 year was over and it looked like rates were going to drop in 2026, so it seemed like the timing was good. Did he come back just to give them that one big idea and then vanish again? I I just I agree with you. Where the hell is he?

SPEAKER_04 56:37

I think he came back to uh to to right the ship, to write the wrongs of the people he left the companies uh you know in their hands. And uh I'm sure, like many who have made you know big bets, he was counting on where we thought the rates were going, that there would be a sizable boom and that they would resurrect. But it currently at around a dollar or wherever they are right now, I mean they're hanging in there. Um, I'm not hearing anything bad about them operationally. I think they've got some of the best tech around, but it seems to me like Kobe and Aaron, they they would be one that would be really well suited for a partner.

SPEAKER_07 57:11

Yeah, yeah, I agree. And then I and it seems like there's the it they're starting to have momentum going that way.

SPEAKER_05 57:17

But they had an addition, they had an additional issue that I thought Tony was going to come back in and and and help them with, which was they exited the broker business. And then they wanted to come back in and they had a trust problem, a credibility problem with the broker community. So I would have thought there would have been a lot of public discussion about why you can trust us again and a lot of things that were noticeable on the front. And we just haven't seen that. It was almost like, all right, maybe they were gonna do that when they thought rates were gonna hit that five handle and stay there, and then all it was all of a sudden like, well, that didn't work. Let's try something else. And then they've just been quiet since.

SPEAKER_04 57:49

Yeah, if you want to gain momentum, do what you did to get you there, uh Anthony. Get out there, start talking to more people and get people excited about it. It's not gonna happen. Yeah, it's not gonna happen in a silo. I I reached out to him, he was kind enough to respond and and say no. Um, but he's got to go back. I think they have to really go, they want to go back to the roots, go all the way back to their roots, like bootstrapping when you were so hungry to get the word out, right? Because you know, you're only as good as uh as yesterday.

SPEAKER_05 58:17

Um by the way, you know who's been really good at that? Mike Cortis.

SPEAKER_04 58:20

Great at it.

SPEAKER_05 58:22

Yeah, yeah, good point.

SPEAKER_04 58:23

Yeah. So you know who else is great at getting out there is Tim Rude. I'll tell you what, Aaron. Uh you you helped bring Tim Rood into my life. Why do we love Tim Rude so much?

SPEAKER_07 58:33

He's great. He actually, um, if you looked at his Daily Dose today, he actually had a really good write-up on the whole Japan situation. And so if I confused it for you, you could go and read Daily Dose today because he did a really good write-up on it. He's just the best. I believe he is in Carmel right now or Monterey, enjoying himself. So I hope he's he's having a nice relaxing time.

SPEAKER_04 58:55

Have we left anything on the table as I rip up the screen?

SPEAKER_07 58:59

Full Nancy Pelosi with that rip. Well, like that. Hey.

SPEAKER_04 59:05

Now I'm gonna do a David Letterman. Oh, old style.

SPEAKER_07 59:11

I gotta say, Cody, you should go with the bright colors more often. You're looking, you're looking tan and handsome in that color.

SPEAKER_05 59:16

I appreciate that. I think I'm gonna brighten things up on this end. You know, I've I it it it counteracts my typical dower mood on the show. So I think it's it's get out of here.

SPEAKER_04 59:25

Have we left have we left any stones unturned?

SPEAKER_08 59:30

No stones, buddy. We've not.

SPEAKER_05 59:32

You know, we we we we are uh we are blessed to be in this industry where just about every week we have like 10 topics that we have to reject because there's so many more interesting things to talk about.

SPEAKER_07 59:41

Yeah, okay. If anybody wants our rejection list, I'm happy to happy to share because there's some good topics on that too.

SPEAKER_04 59:45

We should do we should do a rejection show. It'll be like it'll be like the bootleg of this. We can like not do it live, but just play it and then disseminate it. Uh and we want to know who the thoughts are, who are the friends of the show? Uh, because we are eventually gonna pivot again into our uh swag mode, and we're gonna start buying some some swag and handing it out and maybe doing a little bit of selling in, and then we go to Housing Wire where we're gonna be on stage October 1st, live doing a no surrender.

SPEAKER_09 1:00:15

So excited.

SPEAKER_04 1:00:16

We'll be handing some of that stuff out.

SPEAKER_05 1:00:18

I'm so excited to be on the stage. I want to thank Zeb and uh Diego and Clayton for inviting us on. Diego had a really cool email that he sent out yesterday. I think it was their first one promoting that conference, at least the first one that I saw. And uh I happened to be on the phone with Zeb talking about uh what the stage show might look like. And all of a sudden my phone started blowing up because Diego had sent that email while I was on with Zeb, and people were sending me text messages asking me about it. I'm very excited to do it. I'm very excited, of course, it's an opportunity for the three of us to be together in person, which is always super special. Um, the FOTS dinner the night before, we're gonna make that happen. I'm putting that out into the universe.

SPEAKER_04 1:00:55

Um, and uh we're gonna let somebody sponsor that too. So we know a lot of people in deep pockets watch a show. We've not dug into sponsorship yet, but we may be willing to put a headliner on this dinner. So, you know, if you're if you're hearing this and want to reach out to us, uh great. And if you're a FOTS, if you're a friend of the show, we need to know because we're gonna have some swag for you. Yeah, show us all your thoughts. Um, another excellent show. Thank you, Jason Baker. We love you.

SPEAKER_07 1:01:22

Jason Baker.

SPEAKER_04 1:01:22

Uh Nyung uh is back there somewhere. You know, how much do we love Nyung? We're gonna force her on stage.

SPEAKER_07 1:01:28

As per usual, we haven't done this in a minute.

SPEAKER_04 1:01:30

So where is Nyoung?

SPEAKER_07 1:01:31

Look at your hair today. You look so pretty.

SPEAKER_04 1:01:34

I don't even see her. Are you joking? You're being funny. Hey, hi Nyung. Look at you. Wow, great hair day.

SPEAKER_05 1:01:42

Great hair day. She's staying on mute because she had some echo issues earlier, but but we're always always super appreciative of what she does. She is the glue that keeps us together.

SPEAKER_04 1:01:51

Aaron, congratulations on the new job at Bank South Mortgage. We can't we can't wait to uh watch you soar. We know that that's inevitable. So can keep up the uh the great work and thanks to everybody for listening to another edition of No Surrender.

SPEAKER_07 1:02:08

Greg, you're handsome too.

SPEAKER_06 1:02:10

Whatever. No surrender on the show. We go to the toll. What fail, what fails, who gets the home? Hot news, hot things, wait a thing.