Top originators reveal secrets for success in an ever-changing market

[00:00:06] Matt Sexton: Hello again and welcome to the latest edition of MPA TV. I'm Matt Sexton, mortgage journalist here with Mortgage Professional America. Today we continue our Broker Intel series featuring discussions with the top mortgage pros across the United States on the most important mortgage topics of the day. We'll hear expert insight and analysis from the brokering industry on a wide range of topics from regulatory trends to market strategy to everything in between. I'm honored to be joined by three esteemed guests on today's episode. They are Damon Germanides, co-founder of Insignia Mortgage, Tom Ahles, chief growth officer at Edge Home Finance, and Andrew Russell, founder of RCG Mortgage. Thank you all for joining us today on MPA TV. It's time to get to the questions for this episode. We'll start off with Tom. Tom, how are things looking for loan originators in the year ahead? What do you see as the main opportunities for LOs and brokers to grow their market share?

[00:00:59] Tom Ahles: You know, for the years ahead, obviously, everyone is talking about AI and what it's doing to aid us all and make things more efficient. I think, you know, the biggest thing for the years ahead is really understanding what pieces of that technology are going to be around or are worth spending time investing. You know, the human capital aspect of learning that information. To me, we're seeing turn times continue to be faster because the time to underwrite a file where an underwriter could have 20 or 30 files per underwriter, now they can handle 60 to 80 or 100. So we're starting to see things become more efficient. On the loan officer side of it, it's getting answers quickly, right? If we have income that we need to, if they have 10, 15 properties on a rental schedule, where normally it would take on a to be determined situation a couple of days to get an accurate response. We're seeing those quicker. So my opinion, you know, things looking for loan originators, especially in the broker channel, things are looking up, right? We've continued to take more and more market share. And I believe delivering on what are the three most important things to all of us in this industry is pricing, speed and execution. And you just watch brokers continue to grow with that market share is those three main points continue to get better. And I think technology is helping us achieve that even at a faster pace.

[00:02:32] Matt Sexton: Andrew, any thoughts on that?

[00:02:34] Andrew Russell: Yeah, of course. I mean, I could just say, you know, from a micro, maybe from a New York origination perspective, realtor centric, I just feel technology is great. I have found he or she who makes the calls wins. So I found a little grit and grind and hustle that can't be replaced yet with AI. I mean, there's some great tools. Can't say enough about UWM and Mia, all these different AIs. But I will tell you that at least our experiences in the last quarter, I guess sometimes when it gets more difficult, maybe LOs, they kind of get paralyzed or whatever we have found if we just double down on the business development activities. I don't feel the technology. I think technology, everything that Tom said is exceptional. I think that's on the back end, on the broker side, retail cannot compete with us. Bankers can't compete with us. But I will say there's nothing better, Matt, than a good old meter realtor for, you know, a cup of coffee or a beer. Or if you're a Jet fan like me, probably a hug after consistently losing. But, you know, like I say, he or she who makes the calls wins, I have found outside of technology. It's just those willing to, no matter who you are, you know, top producer, new LO, I don't think there's necessarily an advantage. It's just a relationship game that we're seeing, and it's really successful for us as well.

[00:03:43] Matt Sexton: As a Cincinnati Bengals fan, I feel your pain for sure. It has been a tough season for sure. Damon, any thoughts on this topic?

[00:03:50] Damon Germanides: Yeah, kind of married both of what Tom and Andrew says. Yeah, we're heavily invested as a small business in our tech stack. I can see a path with these great new tools and AI and other robotic processes speeding up the experience for the borrower, the turn time back to the realtor or the listing agent or the borrower and what they can qualify for. We're playing around with a run-my-day type of dashboard for our LOs. We run a lot of analytics as the owner of the business. I've candidly failed our LOs a bit by not running enough analytics for them. So trying to use the AI tools and just some of the newer, greater technologies to give them more visibility on who's calling, who are your referral sources, who needs attention now, who should you be going after for a lead. But to speak to what Andrew said, there's, I think, more than ever a desire to pick up the phone and spend a few minutes talking to your clients or your borrowers and get that human connection. I was just at a conference, and I think one of the big guys, it was either UWM or Rocket, the refis with the AI tools is a big game changer. But on purchases, the automated loan process is still not basically running the day. The individual originator knows what they're talking about is winning those deals. Because likely the real estate broker wants to talk to the broker who knows what they're talking about. The borrower might have questions outside of what the chat might be able to articulate. So I see an opportunity for these tools to make good, strong, fundamentally sound brokers into super brokers and those who are not using it to have a more difficult time originating loans.

[00:05:52] Matt Sexton: We've talked a little bit about opportunities. Let's talk a little bit about challenges. We'll start with Andrew on this one. What are the biggest challenges facing LOs and brokers, both now and in the coming years?

[00:06:02] Andrew Russell: I think one of the biggest challenges, especially in our area, is just pure inventory. So you really have to stand out as a loan originator to kind of help your client, to help them get an accepted offer, to get that realtor's business. So we try to turn the issues of the more problematic things into benefits. So as an example, one of the things that we do to try to capture more business, you know, I kind of consider it, there's less pies, and I'm a big purchase guy, less pies of pizza, let's go, and I'm a big guy as well, but unfortunately, let's go after more of those slices for the less pies. So one of the things we do is we call like the buyer hype up call, that's really big for us, where we call the listing agent, tell them how the buyer is the best thing that ever happened to them and how fast we'll close. So I find some of the disadvantages purely if you're a purchase shop, the inventory, especially in areas where there's not a lot of new sales, mostly existing. Just becomes problematic. There's not that many sales to go around. And then it's even more difficult for the loan officers. But I try to take the situations where it's maybe more problematic or less business and turn it into bigger wins to, like I said, I feel like the win is getting more slices from a shrinking pie.

[00:07:05] Matt Sexton: Damon, what are you seeing there?

[00:07:08] Damon Germanides: You know, we're in a mature, we're basically in big cities. We focus our originations on, you know, California, Texas, Florida. Bigger cities, our average loan size is about two and a half million bucks, I think right now, maybe two and a quarter million. So one, affordability, and two, what Andrew's saying, inventory. I mean, I have never in my 20 years had so many pre-approvals that just die off because the borrowers cannot get into what's considered affordable housing in the great state of California here, especially Southern California. I mean, you're talking about starter homes in some areas that, you know, two and a half or $3 million.

[00:07:48] Andrew Russell: You just tap out, right? Just literally tap out.

[00:07:51] Damon Germanides: It's just like, even if I can give you the loan, do you really want this like stress every month? Like 49.9% of your income is going to your mortgage payment before you spend on the kids or whatever. And I think that speaks to when you get to know your client too, like, hey, this might not be the answer you want, but like, let's really think about this intelligently and figure out if this is a good move for you. Are you going to be so stressed out that you're going to — it doesn't make sense economically or for your future because you're just going to be working to pay your mortgage every month. So we are seeing and the irony of that is it's people who are, you know, in the upper cohorts to sometimes that, you know, are living what you consider the American dream, making five, six hundred thousand dollars a year in some of our markets and still not being able to buy a home. It's a little disturbing in my mind about that, that's a little bit concerning that those kind of profiles would have such a tough time finding a house.

[00:08:44] Matt Sexton: Yes, definitely concerning for sure. Tom, your thoughts on the topic?

[00:08:49] Tom Ahles: You know, the topic of what's the most challenging for loan officers, you know, I'm going to speak mainly in the broker channel, is really retention. I think when you look at a competition standpoint of, if I'm not mistaken, Andrew and Damon were both all heavy, you know, we're all heavy focused on purchase because that's really what propels us and keeps the lights on even in bad markets. However, you know, looking at a retention rate, I think the broker channel averages between 15 and 17 percent for a retention rate. And our competitors are at 90 to 98.

[00:09:26] Andrew Russell: So that's really bad, right? That's really bad.

[00:09:29] Tom Ahles: Really bad. So to me, it's been something that our focus going, you know, into this year is looking at, OK, well, how do we combat that without stepping on the toes of originators that have built their own book of business? And it's really trying to identify ways to where is there a way that technology can help with that? Or does it just boil back down to what even Andrew said? And you've got to pick up the phone and we've got to make sure we're making these calls. But to really look at moving that needle as a section of this industry, I think it needs to happen, right? Because what it's letting us know is that we're not servicing our clients as well as some of the companies that are forcing people to make those phone calls. And, you know, what can we do to get better to where even any one of our companies, if we increased 10, 15 percent on a retention rate, would be — everybody would be eating. It would be outstanding. That's the biggest challenge, I think, of the broker channel. Other than that, everything has been, you know, on the purchase side, we've continued to grow and are still taking more market share. But that's an area that we've been kind of stagnant on. And we see a lot of the players in the TPO business trying to step up and put things in place to help with it. But it still really boils down to, as leaders of our own organizations, how do we make that difference within our own company? So for me, that's a big focus for 26.

[00:10:54] Matt Sexton: We've talked a lot about technology already. I'm sure that's going to be at least part of this next answer. And we'll start with Damon on this one. What is the biggest change in the way that you've run your business in the last few years?

[00:11:07] Damon Germanides: Two things. When the interest rates had the Fed went on this jumbo rate hike cycle, the rate of change was very, very fast. And our firm had developed some very good relationships with small banks and credit unions around California predominantly. And those guys, you know, they basically ran out of gas. They couldn't fund any more loans. They had loaded up on long dated treasuries, plus, you know, inexpensive mortgages relative to what was going on. So we literally had to restructure our business and realize at that time relying on a few lenders was a great way to scale your business and really get a strong flow going. But if you hit a tough market, boy, man, did you get a double whammy of not only rates going up, but your lenders saying we can't do any more business. So that was a big wake up call. I mean, a known problem potentially, but still the rate of the speed at which it happens, you can never adjust for. So that's pushed us into some other products. Another line of business for me, I've gotten into the bridge lending business for developers as a separate business to Insignia, called Insignia Capital Corp, that's working with a lot of local developers and builders and that's been a nice compliment because we can get the client the bridge loan to buy the property and then once they stabilize, incentivize them to call us for the mortgage side to give them the perm loan. So just being creative like that, and then just on the tech front just spending more time really trying to understand. I mean, like Tom and Andrew was saying, you got to make the tools work for your sales team. Our sales team's well over 40 years old. They're not technologists, right? You can't build something that's so complicated that they're never going to use it. So you got to try to find a way to get the buy-in by making it easy and intuitive and let those guys do and those folks do what they do best, which is go sell mortgages, right? You don't want them to be sitting there trying to figure out how to run their day on a CRM if it's not what they like to do or what they're capable of doing. So that's been the challenge as well on the tech front.

[00:13:28] Matt Sexton: Yeah, it totally makes sense. As in, there's so much new technology out there. It's definitely a challenge. Tom, what are you seeing as far as changes? What's been the biggest thing at your business?

[00:13:39] Tom Ahles: You know, there really hasn't been many changes over the last few years for us. Everything has been fairly consistent. And if I had to choose something, though, and I don't want to probably tie into one of the future questions, is really accountability and understanding what is the accountability of a broker. And, you know, even from a regulatory standpoint, there's — it's still, I think, when a lot of our legislation was written for Dodd-Frank, there wasn't really verbiage of how people would operate as a broker. There were some parts in there for people with mini correspondent. And it was more of like a temporary way to operate before going fully delegated. There's been, to me, that's really been the only change outside of that. You know, the business has been the same. It's just, they think you're going to have to start doing more business to make the same amount of money. And we've been hearing that for a while. We're starting to see that trend a little bit, start to come into play every year a little bit more where loan officer compensation may be coming down a tad bit, but they're doing more units. So I think that's part of the whole technology piece and making things faster and easier.

[00:14:57] Matt Sexton: Yeah, totally makes sense. Andrew, how about you?

[00:15:00] Andrew Russell: Yeah, if you're going to throw tech in there with social media, I mean, that's a big thing for us. So, you know, I don't know if you guys can see I'm six three, two fifty to three twenty, depending how many bubble burgers I eat for the jet tailgate. True story. So a couple of years ago, two and a half years ago, you know, our value add to realtors is we actually help them grow their business on social and digital and we have services to do so. So my team's like, hey, Andrew, you own the joint. Why aren't you doing this whole social media thing? So I dove in. My first videos two and a half years ago were horrific. You know, I'm very intimidating if I don't smile. So my first ones were absolutely terrible. Then I found my groove. I have two little daughters, they're seven and nine. So, you know, back then they were what, five and seven. So I've kind of found my groove. It's definitely helped. You know, I've been on vacation and in the infinity pool in Mexico, so I was like, wait, I know you. I'm like, oh, here we go. He's like, you're the guy on TikTok with the Sharpie doing the, you know, to all the points here, Damon's point, oh, the 49 DTI and everyone's hating on you. I'm like, yeah, that's me, the guy with the Sharpie.

[00:11:07] Damon Germanides: I know who you are now. I think I've seen a couple of your videos.

[00:16:01] Andrew Russell: You have the Sharpie like, hey, how do you give someone this much of a mortgage? Like it's super incendiary. But, you know, for that, I've doubled down. I feel like YouTube is a play that not many originators have really dove into and really done it consistent. So just like we have coaches and great coaching groups across the country, and I've kind of dove into some YouTube coaching groups, believe it or not. And I feel like if you think of mortgage and YouTube, you think of some people doing a daily video kind of just like riffing, or no, I didn't think that anyone like led the space. So I was like, you know what, for us non-QM in New York has been exceptional. It's bridged the gap for refinances from a profitability, from an ownership, from a revenue perspective. Plus loan sizes are bigger. Revenue points are higher. You know, on top of that, I feel clients actually appreciate us. I'm not saying that other clients don't, but sometimes when you have two teachers putting 30 percent down with 800 scores, you know, they're price shopping, even on the broker side, sometimes we try to keep up with credit unions. On the non-QM side, you know, I feel like because the FDICs and credit unions don't offer the product, we as brokers are really appreciated. So I made a commitment starting like June, July, August to do two non-QM videos a week for YouTube. So in a year from now, I should have over a hundred. It's one of those things. It's like, thank God I have my main business because it's a slow burn. But we are starting to see, you know, the reach out. So we have, you know, people that are having issues working with the wrong companies. Again, some save me deals there and some new clients, which is cool. But that's my tech big thing is I just believe if I do two videos a week, which stresses me out because, you know, we got deals and fires and realtors. I promise in a year from now, I'll be the guy on YouTube that is the non-QM guy. That's my goal.

[00:17:40] Damon Germanides: I think, Andrew, can I add one thing to what Andrew's saying? I think he said two important things. Number one, consistency. I tell our small — we're a small group, right? I tell our sales guys, you've got to do it for a few months for it to pay dividend. You can't start calling these brokers or start sending out a marketing piece or trying to drum up business somewhere, do it for two weeks and give up. It's a three to six month — why am I doing this? And then somehow by either the stroke of luck or just sinks in with that group of people you're going after, someone will call you on something and then you close that deal and then you become the person that they're trusting for that. And I think transparency is really important. We get a lot of deals that come to us. The client's never going to qualify or it'll be very difficult for the borrower to qualify for a traditional bank loan. The credit income's too choppy. It may fit a non-QM loan. It may fit one of these boutique banks that we work with that are willing to individualize and underwrite. We give them an honest answer. They disappear. They come back three weeks later saying, hey, the bank or the broker who said they could get me that deal, they can't. You guys were honest. You gave us what we could get. We trust you to take us to the finish line. We see it all the time. So I think the transparency and being honest, even though you might lose the loan, but give the client the right feedback is over time is the way to go.

[00:19:07] Matt Sexton: Yeah, absolutely. Honesty is always the best policy. And at the end of the day, the customer is going to appreciate that. A couple of current events type questions for the next two. One, Tom kind of mentioned it a little bit already, but we kind of want to dive a little farther into it. The CFPB, everybody's favorite topic, back in the news as the current administration continues to work towards potentially shutting it down. What is the shift to state enforcement meant for your business? And are there any other regulatory changes you'd like to see take place? And let's start with Tom, since he's already kind of mentioned a little bit about the compliance side.

[00:19:43] Tom Ahles: The current leadership will change. It always does. It always will. But the industry is going to continue to — we're the largest access to the wealth that the country has, right? It is in real estate. So to me, we have a very important job to protect it and to make sure that we don't fall to things what happened in 2008. So regardless of what happens to CFPB today, it's our job to operate within the parameters of what has been set. The tricky part with that has been now that CFPB may be exiting out or come back in from time to time, depending on the current leadership, they're still going to be looking at the stuff that's being done now, right? So those that are in this industry for the next 20, 30 years, it's important to make sure that, you know, if we think and we hear these things on the news that, okay, the CFPB is now it's going to be done with, it's not. It's going to come back. And the items that you're doing today are going to be looked at. And when we're looking at things from a broker standpoint on how are you managing the things that states are not looking for, right? We're under audit typically about five, six states at a time throughout the year because we're in 49 states. So at some point, I mean, a lot of them are asking different things. And now that we've seen the CFPB kind of take a backseat, a lot of those states are looking at federal regulation and kind of making their own guidance on it, which to me has been a little bit troublesome. However, you know, we're so heavily regulated. If you look at how many people that the majority of us are having to be accountable to from a legal perspective, in some instances, depending on how you do business, it can be anywhere between 12 and 15 different governing bodies that we have to have to either walk through audits with or have submit reports to. I mean, there's so much of it that it would be good if it was one single spot. You know, I guess we have a state license and a federal license, you know, federal laws to uphold. But there really hasn't been a challenge with CFPB being gone or here, right? I think the biggest challenge for any of us that are in the broker channel is understanding how to operate because you can't call them and say, hey, I have a question for you. You know, if my loan officer took — they're going to say, well, here's the guideline, read it. Well, guidelines sometimes weren't written for brokers that aren't funding their own loans or even disclosing in their own name to where it's been a little tricky to where I think the majority, a lot of brokers just try to do the best that they can. And we're so heavily regulated that I don't think as we've seen market share grow, we got a lot of people that were punched in the mouth from 08. All they want to do is run a good business. We want to help people. We care about the consumers in our market, to where I think there definitely is overregulation where I'm happy at this point. Things have taken a step back. But as we've seen the CFPB step back, we've seen some states then start to make up their own guidance on federal regulation. So it's been a little bit tricky. So if I would like to see anything, it would be great, similar to how they do a multi-state audit, if you're having one, similar to where they at least have the federal tied into it, maybe even some sort of a help desk to where they can run things past them for a lot of smaller brokerages, because the majority of the brokerages in our industry are the ones that have three to five people, right? That's probably 90 to 95 percent of the brokerages that are in this country are really what they would call mom and pop shops or a group of friends that really just want to help people and, you know, don't want to have their margin stepped on. So they open up a brokerage. Well, where's the help for them if they want to get it? Because a lot of it was designed to, you know, regulate large publicly traded banks where most of the mom and pop broker shops aren't even close to that. They're just trying to help people. They have a great access to cheap money and good service that they provide to where it'd be good to have a little bit more information.

[00:24:02] Matt Sexton: Yeah, it's great insight, Tom. Andrew, any thoughts on this?

[00:24:06] Andrew Russell: Yes, that was very good, Tom. That was a very, very good answer for, you know, it's like putting politics on social media. It's like trying not to, you know, that's great. Yeah, no, that was great. It's the truth. But then, you know, the size of Tom's organization, which is huge, you know, us is like a microcosm. It's just more if you think about the business as a whole, you do good business and you get in trouble for stuff or a violation. And did you know about it? No. Did you call and ask any about it? No. Are they very basic, objective questions? You should be able to call and say, hey, the sky is blue, right? Yeah, but there's no one to call and ask that the sky is blue. We need to know it was whatever color we're going to call it today. So it's interesting. It's one of the things like you can go out, do a great job, earn your income for your family. And within three years, whatever amount of time, have someone come in and say you did it wrong. So, you know, that's why we love the mortgage business. But I do hope it improves. I think it would be fair, especially for the broker side, to Tom's point, it wouldn't be great — it's not like we're trying to cheat or, you know, like, just tell us, tell us what, how do we pay loan officers? What's the best way to do it? And even if you think of the mortgage side, right, there could be 10, you know, specific lenders you work with, and only one will do the deal. Even on the guideline side, it's the same thing. So, you know, I don't know how sometimes we all, I don't know, Tom, your backstory, how you guys, or Damon, how you guys got in the mortgage business. Sometimes I'm like, where did I decide that I was going to go from master's in psychology to this field? We definitely love it, but wouldn't it just be great? We're all great, objective humans. Just tell us what to do.

[00:25:32] Matt Sexton: I think that would be nice for everybody. I think it'd be very easy. Damon, anything to add to that?

[00:25:39] Damon Germanides: No, just kind of what Andrew was saying. Smaller shop, you know, can't spend a fortune on legal and compliance, but we do budget that and have a full-time NMLS, Department of Real Estate attorney, have an outside compliance group for other states that we have on retainer. And sometimes they don't even know the answers, to be honest with you. So you sometimes just do the best you can. And it's not like the regulators, if you even go through your attorney to ask what's your — how would you respond to this issue? They point you back to their manual and say, well, it's in there. And it's pretty frustrating sometimes, especially if you're like, to Andrew's point and to Tom's point, if you're trying to do the right thing and these rules are opaque. And like Tom said, designed for huge corporations that can have a bunch of corporate attorneys figure all this out and a management team to design the rail guards. But so many of our broker friends out there are small businesses just trying to, you know, navigate and they might even get the wrong information from their lenders who sometimes don't have the right answers. So it is a challenging market sometimes in that regard. So just do the best you can.

[00:27:00] Matt Sexton: Yeah, it's all you can do. It's certainly a challenging area for big and small brokers. Another news story that's been — and I'm curious to get your guys' thoughts on this. We've heard some interesting ideas, we'll say, from the government of coming up with ideas to deal with housing affordability, everything from 50-year mortgage terms to portable mortgages to more assumable mortgages. We'll start off with Andrew on this. What ideas are you hearing out there, whether it's the government's or other ideas that would actually help? And what are some other things they should consider?

[00:27:31] Andrew Russell: Honestly, my only feedback based on all that is it was the biggest blessing for me. Why? A reason you wouldn't even think, because it gave me the opportunity to do short-form content that's so out there and ridiculous. Like, oh, my God, this crazy new thing came out from the government. You have to watch and follow, you know, and it got — we end up getting more leads and opportunities just because it was a marketing play for us. But, you know, I have my feelings about it. I think, you know, in fairness, a 30 year fixed rate mortgage in the six to seven eights, some would call it a rip off. I think you pay back two and a half times what you borrow. I couldn't imagine a 50 — or it's the same thing with adjustable. I say, listen, if you can't afford this payment and one hundred dollars a month moves the needle, you probably shouldn't be buying this house at all. But to me, listen, ideas are great. There were so many ideas, you know, with multiple presidents, none came to fruition. So for me, I use it as a self-centered advantage just for aggressive Instagram marketing.

[00:28:21] Matt Sexton: I read a lot of stories last week because of it, so I'm not complaining either. It certainly gave me some content as well. Damon, your thoughts on any of this stuff or any ideas that you might have that might be different than what's out there?

[00:28:33] Damon Germanides: I mean, the 50-year mortgage is — if you do the math, it doesn't make a whole lot of sense. I would just say, why don't you just do a 20-year IO and then convert it into a 30-year loan? And if the client wants to pay down over that 20-year, give them ability to recast the loan automatically with an additional principal payment. But that's just a thought I had right now. I haven't spent that much time on it. Candidly, jumbo-oriented lender. Most of our clients are looking at the yield curve and saying, I'll take the shorter duration loan, seven years or 10 years, because we don't, you know, we're not going to be here that much longer. We'll deal with it later on. So, but you know, the only posit I would say out of that is the fact that the, you know, the government is aware that there's an affordability problem or the administration, they're trying to come up with some ways to, you know, get some activity, at least in the existing home sale market, which has really been stuck.

[00:29:35] Matt Sexton: Yeah, absolutely. Tom, what are your thoughts?

[00:29:37] Tom Ahles: I like the answers. It was kind of — it was made for some good content creation. I mean, the reality is there is a problem with affordability. I think even for us, that's why, you know, if you would ask me 10 years ago, would I do Chattel or Chattel financing? I would have said, no, we don't finance cars. We do mortgages. And however, we've started doing them and we do a lot of them, because affordability has gotten to the point where, you know, if you have a family, I live in Minnesota, so you figure if somebody makes $60,000 a year, but they can't — I mean, you can't really afford to have a house and food. Like you've got to come up with something. So to me, whether or not it's a 50-year mortgage, I don't think it's a great idea. However, if it helps somebody get into a home and we look at it instead of where the lens that I think a lot of people view it with is their own lens and saying, for me, if I was going to buy a six, $700,000 house, it's been so much more in interest. It's crazy. However, I think when you look at it for a $100,000 home, what does it do for the payment, you know? It sometimes can be 10 percent less than overall payment. So it could be right for the right person, right? Financially, you know, you could go anywhere on the spectrum on this. You could say paying interest is bad at all. You should do a five-year loan. Let's be realistic, right? Everybody has a different way of doing things. Homeownership would still provide more value, even if it was a 50-year mortgage, than renting because they are still getting the tax deduction. They are still gaining equity. I don't know the answer, right? If I did, no, I wouldn't run for politics regardless. I was going to say I would run, but that's not happening. Hate politics. To me, one of the things that I've seen work, at least in some areas, is leasehold property, where the government's buying the land and then in the cost to build, if it's a $200,000 house on a $200,000 piece of land, the government owns it to try to help more affordable housing. I've seen that work. Portable mortgages, I think, are a horrible idea, but that comes from my perspective because I run an origination company. I have friends in Canada, they have a portable mortgage. I personally, if I could use it, that would be great. But for my business, it would be horrible. So, I think that the way our economy has ran from the way that mortgages are done, I think it would be detrimental to not only our industry personally, but to the markets as well for how many jobs and everything is attached to the mortgage sector of our industry to where I think it would — there would be a lot more secondary products because even similar to like a VA mortgage is essentially portable. Not really, it's assumable, but somebody can assume that mortgage. However, the majority of people that are doing that then have to come up with the big chunk after. If they have a $200,000 assumable mortgage, but the house is $400,000, they got to come up with another $200,000. So I think there would be a different sector that would open more people in second mortgages or ways to be able to bridge the financing gap for it. But I definitely think there's something that maybe needs to be done. I don't know if a 50 or a 60 year mortgage is the answer. I think, you know, we need to find ways to keep stabilizing housing and stabilizing the job market.

[00:33:15] Damon Germanides: One thing I recently underwrote for a small bank, it was more of a luxury deal, but I think it'll apply evenly, was we helped a client. He was building a modular home in Topanga Canyon area, and the cost of build was significantly less. We got this bank because they wanted to work with the client to do the financing. It took us three months to figure out how to actually finance a ground-up construction modular home. But looking at the cost, the combination of you can get the square footage down on some of these more affordable areas with modular, you could really pump out these houses. And people always think of modular like manufactured. Oh, my God, I don't want that. I've spent a little time on this. It could be a potential solution to bringing down the cost of, because if inflation doesn't come down at some point, we're not going to — rates are only going to go, I mean, how much further can they go, right? So we've got to come up with the solutions on the inputs. And if you want to buy a home and improve it or whatever, how do you get these costs down, I think is the bigger question.

[00:34:25] Matt Sexton: That's a great point. Modular homes in this area in Ohio, where I am, are big. And a lot of them are really, really nice. You would never be able to tell it's a modular home otherwise. So that could very well be a solution. But yeah, we'll see kind of how that works out. Just already to wrap up, we got one final question for all of you, and we'll start off with Damon. As we look ahead to 2026, we're almost at the end of 2025. What do you think the landscape in the mortgage industry is going to look like in the new year, and how should brokers prepare for the challenges and opportunities ahead?

[00:34:56] Damon Germanides: You know, I think those that are committed to the business with some of these new tools that are becoming apparent, AI, again, speaking of that, different types of processes that could really supercharge you. I think it could be good. I'm a little bit nervous on rates. I don't know how much lower they're going to go, but still much better than they were. So I don't think you can rely on rates being a tailwind for your business. If it happens, it's great, but prepare as if it wouldn't. And, you know, I just think, it's going to remain a better environment, but still challenged and, you know, take advantage of it. You know, you earn your stripes in hard markets. Everybody can do it when rates were 3%. We didn't work. Looking back, we didn't work as hard as we thought we were working. Now we're working really hard. So I think you grow your business, you grow your reputation in more challenging markets and you develop your niche. And then when things do — I do see a path for rates to come lower over the next couple of years. You've kind of planted those seeds, and you can really harvest them at the right time.

[00:36:08] Matt Sexton: Absolutely. Tom, what are your thoughts for 2026?

[00:36:12] Tom Ahles: No, I think we started to see the shift a little bit to where he'd use the word influencer. But Andrew now, since he's the TikTok influencer, I want to call him that. I think that we have to use what, where we're at with it, right? The ability to touch five, ten, twenty thousand people in a day where before we used to do a lot of tv and radio. And I would have to spend a hundred thousand dollars to have so many impressions. It’s now, you can’t, there’s no point in doing that. Now you have it for free but, you need to teach people right? People want education and I think younger generation is been given everything that they wanted without commitment and that is the culture we created so we need to market that way. We need to go on with a sharpie and do explanations of “Okay teach me what a 50 year mortgage looks like” “why do you think it’s a bad idea” to where you actually need to work twice as hard in that aspect where before maybe it seemed like fun but that’s where the business is right? If you can reach not only your past clientele, real estate agents everybody through something to where they, for me, outside of watching football on TV I don’t really watch TV anymore but I’ve spent time on social media I know what my friends and family are doing. Majority of people have switched from watching television, my opinion, to staring at their phone. And if you’re not leading with the knowledge or education that people want, somebody is. And that’s gonna take that business from you. So I think 2026 we’re going to start seeing it more and more. The Influencers the people that are leading from an education standpoint, mixing things in that are fun. Um it’s going to he with the most or she with the most friends is going to do the most business. And I really think that’s the way it’s been but it was a lot harder because then you had to be connected to country club membership, or golf club or yacht club or wherever you did. Yeah, now to where you’ll see you know, 18, 19 year olds coming because they’re willing to go on. They don’t have the reluctancy that some of us do at our age of doing the social media aspect. I think that’s what it’s going to continue to grow that aspect of the business.

[00:38:29] Matt Sexton: Awesome. Andrew, we’ll let you wrap it up. What are your thoughts on 2026?

[00:38:33] Andrew Russell: on 2026? Well, the Andrew Russell wrap-up for 2025 is so it's everything we said on the call. It's a mixture of what do you do when the phone rings and what do you do to make the phone ring? And you just kind of marry those together. It's like chicken before the egg, what do you work on first? I've known loan officers that make their phone ring. Their marketing, their bisdev game, their social media game is tight. But then that happens at scale and then they drop the ball with all their realtor partnerships. But if you kind of perfect with technologies and with your team and if you build it they will come Kevin Cosner style which you guys know you have to pay all these fixed costs will then grow into it. That's difficult especially in this market. You don't necessarily know where your next deal is coming from. So I do think it's a mixture of the both. It's working on all the technologies and really geeking out in your team to have a flawless hopefully tech first process when the phone rings but also doing the land air and sea stuff to make your phone ring which is to point the BNI groups the boots on the ground the bellyto belly the social media stuff. Absolutely. You can't do any worse than you're doing right now if you're not doing it, you know. So, you kind of marry that all together. But I do feel there is no secret sauce for next year. There is no pill you can go and take, right? There's no ompic to lose weight for, you know, the mortgage space to do better. It's the truth. Unfortunately, it's just you have to have a great process, which is why we're brokers, right? Without a doubt. It's been shown we save clients money. We're the best, fastest, all the good stuff. But how do you make your phone ring? Sland Aaron C. You really have to do both things. Remember as mortgage professionals sometimes like what do you do? I do mortgage. I'm a technician. Well, you're also a marketer. You know, that's how you make your typically, you know, if you're an outside sales guy and you're not getting leads from your company, which is a blessing. I'm a marketer. I do business development. That's a completely different, you know, hat, a different tool set. So, those are the two things. If you focus on those two things, you'll crush it next year.

[00:40:14] Matt Sexton: A lot of things for brokers to focus on for 2026, but if you follow all that advice, you're going to end up with a great year. No doubt about it. That's just about going to wrap things up for this edition of MPA TV. Gentlemen, thank you so much for taking the time to join us and I wish you all the best of luck and continued success in the new year. Thanks again to our guest and thank you for watching this edition of MPA TV. For my guests, I'm Matt Staxton saying so long and we'll see you again next time.