Mortgage market recovery - The role of mortgage tech

Paul: Hello, everyone, and welcome to the latest edition of MPA TV One, in which we're going to shine the spotlight on mortgage technology. Chances are, the term mortgage tech might make you conjure up talk of AI bots or machine learning. Some think it's fair to say, would fly over the head of most. But what if that tech offering was brought to you by real mortgage people at a real mortgage company? Well, that's what Cloudvirga can claim. Starting live some six years ago with the goal of creating one of the first digital mortgage point of sale systems and ultimately making life easier for loan officers and homebuyers alike. Now we're going to get to know that company a little better and get its views on the state of the market. And to do that, I'm delighted to welcome Jason Smith, head of revenue at Cloudvirga. Jason, welcome to MPA TV. 

Jason: Hey, good morning. Thank you for having me. 

Paul: So let's start with an introduction, shall we? Tell us a little bit about who Cloudvirga is and where you fit in the mortgage space. 

Jason: Yeah, absolutely. Thank you. As you mentioned before, we are a digital lending platform. We primarily reside in the point of sale space, so our position in the loan life cycle is typically going to be on the origination and fulfillment side. And one of the cool things about our technology is that because we are the only company in our space that was actually born within a mortgage company, we come from a mortgage origination background that we from the very beginning really focused on the experience across the platform and not just on borrowers where most of the space focuses in on, but we also really honed in on the loan officer's experience and getting them out of the LOS and to live within our platform. And we feel that we do that really well. 

Paul: So I'm going to give you an opportunity to give me your best sales pitch, if you don't mind. Jason. Tell us why a company should consider partnering with you. 

Jason: Absolutely. Aside from working with me, which is a benefit in and of itself, we are a true partner that is dedicated to our craft. As I alluded to before, we were born within a mortgage company. The vast majority of our team members have very deep mortgage experience and we look at things from that perspective. So not just a perspective of, Hey, we're here to get a loan application and which at the end of the day is really is what you want a point of sale to be able to do. But we're really looking at it much deeper and how can we help your people do more better? It's sometimes as simple as that. And by doing that, can we do that at the same time? Can we do that with a a very good experience, meaning that most mortgage technology, probably most technology, frankly, but mortgage specifically isn't created with the end user in mind. It's created to complete tasks for automation, lifestyle processes and things like that. All those cool things that our platform does as well. But really where they miss out quite a bit is on the experience and there has been so much focus on the borrower experience, which is absolutely critical because we're well aware of that. A point of sale is typically the first physical interaction that a borrower is going to have with a brand, or it's going to be an extension of a brand if you're, say, a depository or credit union. We've taken that one step further and focused on the back end as well. And your loan officer understanding that good technology is not only a good piece of the puzzle for your loan officer, but it's also a recruiting and retention tool. You want the best technology and the best experience for your team as well because that's going to keep them happy. That's going to keep them with you. And again, it's going to help them do more better, which ultimately is going to help you get through the the ups and downs of the loan origination business. Yeah, and that's not my elevator pitch. 

Paul: And I think everything that you're saying makes a lot of sense. But, you know, you mentioned at the top there you are, your real mortgage people if you want. So if you don't mind, can you give us a little bit of an overview of how you see the market right now? How do you assess the space currently and how do you see it developing? Because these are generally seen as pretty tough times, right? 

Jason: Yeah, 100%. I would be lying if I didn't say anything other than it's a tough time right now. But I think what we have to keep in mind as well is that the mortgage volume, I think last year was 2.1, 2.2 trillion. I'm speaking just kind of off the cuff. So don't don't hold me to those numbers. But if you look back historically, that keeps in line with the volume trends that we were seeing before the, quote, refinance boom and would probably still qualify as a top ten year in the mortgage industry since it was starting since tracking began. And I think that's what a lot of people sort of overlook, is the fact that we had really a really great year and a half. But the smart people in the industry knew that that couldn't last forever. And as somebody that was an originator by trade started out many, many years ago as an originator and somebody taught me a long time ago, you don't plan your budget off your best month and you don't plan your attitude off your worst month. And I think that's what we're stuck in a little bit as an industry, is that we budgeted our plans around our best month. In this case, it was, you know, 18 months. But it wasn't. It was it was out of whack. Historically, we were speaking from a statistics standpoint, it would be a vast outlier that no one would use in any sort of valuation model or forward thinking. By the same token, that coming off of that, it's been tough, but we don't want to get stuck in that pattern of, you know, kind of what are we waiting for? I think there's a lot of opportunity out there and the smart people and the smart companies that see that are the ones that are going to be are going to be moving forward. I think there's a lot of great opportunity. Obviously, we've moved into much more of a purchase market. I think one of the things the last several years have shown too is that a resurgence in mortgage brokers. I think we've seen a resurgence in a let's call it a respect for the industry that that the industry really lost after, you know, 08, 09 And that's really cool. It's a really good opportunity for us as an industry to take advantage of some really good opportunities that are going to set us up not only as individual companies for the foreseeable future, but also as an industry. And it's a really good time to to get people excited about it and and start getting a whole new wave, a whole new generation, if you will, of folks within our industry as well, from originators to underwriters to leadership, things like that. So I'm excited about it. I've been telling people for my folks for well over a year said my pitch, my approach, my perspective hasn't changed. Now how we angle things, obviously, you know, leveraging more of a purchase market and understanding that and relationship. Sure. But the core values and understanding haven't changed. It's always been there, but I think it's a really good opportunity for us. 

Paul: Let's keep that excitement going if we can and if we are budgeting not based on our best month and not based on our worst month, give us a little bit of an insight into the role that mortgage technology can help as the market does move towards that recovery. 

Jason: What it can do, it can help in a couple of different ways is one is helping to balance out the the the ups and downs, the ebbs and flows, whatever reference you want to make from the value. As we can see, we're talking to a lot of folks that that want several things. They want efficiencies, they want the technology, they want the integrations. They want to make it easier for the borrowers, the smart ones, to want to make it easier for their loan officers. But really, at the end of the day, what they're looking for is a way to balance out their full time employees, balance out how they react to the changes in market, because nothing's worse than having to build up a large group of folks and then in eight and 12, 16 months have to eliminate a lot of those positions because the sort of the market has shifted and the volume has shifted. And I think we're seeing that a lot and no one likes to do that. So technology's role in that, if you will, is to say it all the time. And it's very simple. I'm a very straightforward, plain spoken person most of the time is that technology's first role should be in helping people do more better. We want to be more efficient. We want to be quicker, we want to be create a better experience. But those all have to wrap into helping folks do a lot more at the same time, because what that's going to do is it's going to allow companies to to manage effectively through the ups and downs that we're going to consistently see in the industry. I think obviously, the the swing that we saw over 2020, 2021 was obviously a higher than average peak. But if you look back historically, we're always going up and down from a volume perspective and a shift to where that's angling at. And mortgage technology can really help that. I think what it can help to is. Have engaged people better and help them understand the industry better, help them see into what is going on and have more exposure to actually what is what is going on in a daily process. That's something I think that has historically been missing before. The the invite or insight of technology is that folks understand a lot more and they're able to be more hands on and have more visibility into the process. And think of it in any of technology. I think the only other industry that really lags behind the mortgage industry holistically from a technology standpoint is the medical industry. But if you look now, like I was just recently at the doctor for an annual checkup, they have a portal now that you can get on, they disclose things. You can easily communicate with them and you can get the information you need before, which is going to naturally cause you to search out and ask for that information because it's that much easier. So you become you become more of a holistic player in your your life and the things that are most important to you. And I think that's really what mortgage technology helps with and technology in general. But that's a really huge opportunity that we have. 

Paul: Yeah, it's a really interesting point that you made there about how the mortgage industry perhaps lagging behind when it comes to tech compared to to a lot of other sectors out there. With that in mind, I just want to throw one final question at you, if I may, which is, what do you see as the biggest missed opportunity right now in the mortgage tech space? Where are we? Where are we missing out? 

Jason: Well, now you might actually get the sales pitch because this is something that I think about a lot because we deal with it every day. And I think. Really it's two things that we're facing now from a technology standpoint. One, and the biggest thing is folks just not wanting to make a change. There is hesitation and there's complacency in the industry for a good 18 to 24 months now. You know, you had a period where people were too busy to do things, so they had they've got either technology right away that they thought helped solve their problem at that particular moment in time, or they sort of held on to what they were doing before, what they were using before, even if it maybe wasn't the best fit for them, wasn't the best relationship, the best partner or the right technology that they needed. And then suddenly the market makes a drastic shift and people are hesitant to do anything because they're waiting for some period of time. I'm not sure what that is. If it's a particular rate, if it's a particular date, a particular moment to where they're willing to actually look into and investigate technology that is best for them now and in their future, as well as what is best for their borrowers and their borrowers future. I talk a lot about experience and think many times we get a little too focused on what we feel is the best experience based upon our own opinions, our own experience, things that we do every day, as opposed to looking outside of that and going, you know what? What are our borrowers expectations? What are our loan officer's expectations? Because outside of their particular job or that particular moment in time where they're doing a purchase or refinance, they're exposed to technology and experiences in everything that they do. And that's really what they're looking at as far as what they expect from a technological experience. And in many cases in our industry, we're still we're still behind on that and it's a focus on it. And if we shift away from that and then just really quickly from an actual technology feature, what can we do? We focused a lot on getting those those day one items, you know, those verifications, those verifications and things like that. But think where there's a little bit of a gap or a really a huge opportunity is finding those day two things that are actually the the things that take the longest. So those day two things, meaning once that file is made it into fulfillment, once you've got fraud checks back, maybe you've got a preliminary title work back and things like that. And you see, okay, my best thing isn't right or there's a lean I didn't know about or there is, there's an ex-spouse or something that's associated with the property. If we can get some of that information, even from a high level up front at the very beginning when the borrower or borrower is is applying at the same time that we're verifying their their assets, things like that, Those are really the things that if we can get a jump on, those are the things that take, you know, a couple of weeks potentially to resolve. So the sooner we can get those, the better. And I think you'll see a lot of a lot of companies digging deeper into that. I know us as Cloudvirga and being a part of the steward family of companies that we are actively looking at ways to where we can dig a little deeper upfront and save real time throughout the process and create a very good experience for the borrower holistically, not just up front or not just at the end, but. Start to finish. 

Paul: Jason. It's been great to have you with us. 

Jason: Thank you, Paul. I appreciate the time and the opportunity. And it was a lot of fun. 

Paul: Well, if you want another expert to watch speaking about all things mortgage, then make sure you keep it right here on MPA TV.