[David] Let’s get over to Allen. Oh, Allen its so much fun. I’m sorry that we stepped on your topics a little bit there, but that’s just because you’re smack dub and where so much is happening. So share with us some of the things you have. Good job on ChatGPT again. Love it.
[Allen] Yeah. I already sent it to you so you, you should have it. So funny enough, I even have a bitcoin joke that GPT came up with today. It’s the borrower tried to use Bitcoin for their down payment, but the AI underwriter flagged it as imaginary income from an imaginary friend.
[David] That’s good. That is a good joke for that is a good one. Thumbs up to that one Kills. Give a thumbs up to that if you didn’t see his image there. Good stuff. Yeah. What else do you see going on out there in the world? You’re working on some exciting things or projects yourself as an independent consultant on things, so you’re back into seeing a lot of unique perspectives. What you got?
[Allen] Oh, for sure. There’s always something fun going on and somebody, somebody’s trying, always trying to do something new and different. One of the things I was on a call today with a mortgage tech company and their investor, and the one thing I said that kind of opened up some good conversation had to do with the fact that our industry has a lot of monolithic systems and that may sound like a really fancy word, but ultimately that means that there’s a lot of old technology and has the vendor continued to evolve, not just add new features, but evolve their backend tech platform to make sure that what you are getting can expand and work correctly and not have outages. There’s so many things that we could put a whole podcast together about that, but, just think about that folks. It’s really important and something else is, AI has so much made its way into everything we do that AI is built into all the tools that people do their coding with now. AI does automatic code reviews. So, when your engineers or your technology company is coding things, ask them, are you using AI in your coding practices? Because most engineers now are using AI in some part, even in the review of their code that they built. So that’s something very important. So AI is making its way into everything, every industry, everywhere.
[David] Yeah. And I think coders, so wait, yeah, the coders, because when you start looking at mortgage execs that are listed as probably not so much the loan officers that are on your audience, but executives are looking at this, they’re going I need to get a, I need to get code done, man. You should see how code could be created. I was talking to someone over the weekend and then they go I used to be a coder. I don’t need to be, I give it the proper direction. It’s more about giving it the proper direction. AI so it can write the code.
[Allen] That’s where the problem lies, David. It’s like. I can teach you to drive a stick shift, but if I don’t tell you about RPMs, you’re gonna blow the engine up.
[David] So that’s great analogy, actually. Yeah, that’s a really good analogy.
[Allen] You need you need to know how to prompt and how to tell it what to do, because if you don’t, it doesn’t understand everything and it makes its own assumptions and you spend more time refactoring and rebuilding and telling it to do things. There’s a whole world, I’m making this up right now, David. There’s probably gonna be a college that has nothing to do, but it’s only for AI. And I don’t mean, like a virtual college. I mean like a physical brick and mortar university that does nothing but AI because it is a practice in itself to correctly use AI and get it to do what you need. So we’re just at the very beginning of this amazing world of AI that we’ll see through our lifetime. But let’s talk about a couple things and by the way, everything in the freaking news is AI. It’s unbelievable. Yep. Lemme tell you first about Lender Toolkit. Lender Toolkit they have redefined what they call their company name. So, I shouldn’t say they’ve redefined anything other than their name, but they’ve changed it to be Mortgage Efficiency Cooperative, which it isn’t just a name, it reflects a comprehensive ecosystem of tools and professional support designed for lenders using Encompass and so they offer products that do automated engines for data, income asset analysis, they do automated disclosures, post-close automation, all these great tools. So check them out. They’re now the mortgage efficiency cooperation. Also, David First American, another company, they just rolled out what they call their generative AI tool for title agents. Okay? So what they say is this new generative AI solution helps title agents quickly access underwriting details and compliance guidelines and it also includes continuing education modules that hold harmless protection for attorney liability. So, in other words, if you go through those that education, you are held harmless or you get a certain amount of protection just I don’t have to compare it to anything, but that’s what it does. In addition to that on the trigger ban or the trigger lead band side of the fence, it’s funny because when we were talking about AI just earlier, it brought up trigger leads ending soon. So, I wanted to bring this up, but I couldn’t make it on the podcast last week. But ultimately I wanted to give a tech perspective on trigger leads. David, this is really short, and then we’re gonna get into some other stuff. Less scrambling, more strategy on the trigger lead side. So in other words, without the flood of aggressive competitors calling for trigger leads, lenders can now shift their focus from a defensive, speed dialing lead shielding tools to offensive, improving borrower journeys, automation and CRM timing, meaning someone’s not calling all your leads all day long to steal them, but LOS and CRM timing still matters. Just because trigger leads are banned, it doesn’t mean that you’re not gonna have, you can’t go slow. You still gotta move fast because you have to lean into the technology that prioritizes that immediate follow up. You need to be first, you need to be continuous and you need to be personal. The borrower experience or the best borrower experience will win. So just want to put that out there on the trigger lead piece. Also David, FHFA they were exploring how crypto, this is the crypto piece. They were exploring how crypto might fit into mortgage underwriting and the Senate just said, Hey, not so fast. They just warned of risk and fraud and they want regulators to freeze any process or any progress at all on crypto. So for now, if a borrower tries to qualify with Bitcoin in their wallet, it’ll just stay right there in their wallet, literally. So here’s the title, senators urge FHFA, to pump the brakes on crypto and mortgages. And if you Google that folks, then you’ll get the exact article that I’m referencing again, that Senators urge FHFA to pump the brakes on crypto and mortgages. So last week, Senator Elizabeth Warren Brown, and Jack Reed sent a formal letter to the director of FHFA. Sandra Thompson urging her to not allow cryptocurrency to play a role in mortgage lending, specifically within the GSE framework. The letter warned of volatility, fraud, risk, and consumer harm if unconverted crypto, like Bitcoin held as an asset of income is accepted in underwriting or collateral, this comes after FHFA’s recent RFI and for those of you that don’t know, it’s a request for information, exploring how digital assets could be evaluated in future credit and underwriting models, and why does it matter for you? The lenders that are listening to our show today, if FHFA ever permits crypto backed assets, it would require tech stack updates, underwriting logic shifts, and new risk modeling tools. I know Les Parker’s ears just went up likely needing FinTech or AI powered validation services. So, for now, the Senate may push to delay or even kill this move completely. So what that ultimately means, David, and I’ll pause because I think some of the folks on our program here probably wanna weigh in on this. It means that the asset that has a value has a different intrinsic value every moment of the day and so if you’re qualifying someone based on what they have in their wallet, which may be a million dollars, it could be half a million dollars. These are big examples. It could be half a million dollars tomorrow, six weeks or at the time you close the loan so ultimately David we have to agree or not agree. We just have to understand that there’s a moving target with crypto and I don’t think we understand it enough yet and I think it’s too volatile of an asset class to really be qualified for mortgages. I don’t know if that’s an opinion. That’s just probably the feedback from other…
[David] Consumer groups are right there with you based on what the what’s in the national what’s the National Mortgage News? That’s where I read the article is was there Yeah. Yeah, it is in that cryptocurrency. It’s the second article on National Mortgage News’ website today. That’s why I thought it was worthy bringing up, because there is a lot of pushback on letting crypto into the mortgage space, and you’ve raised up some really good points. Yeah. Bill talked about volatility. Yes, go ahead. I know Mr. Kittle has a thought too.
[Allen] No, go for it. Please.
[Bill] It goes back to the two parts, right? One is if you’re using it, the value of it, which that’s the easy part. You gotta, you gotta sell it, convert it into dollars and use it in the term. The other part is the fraud and the how did you accumulate it? How do you know that the value, you know that the source is real. That’s the bigger challenge to me. Yeah.
[David] Mr. Kittle.
[Allen] That’s very true.
[Kittle] Yeah. Two things, and you know it’s only a two o’clock here in Louisville, but I may have to have my five o’clock martini early. I find myself almost agreeing with Elizabeth Warren, so that ought to scare the hell out.
[David] There’s something strange reality going on there.
[Kittle] Yeah. Just to say as one of the reasons not to do it, because it’s volatile and it can change we make that underwriting decision on assets every day, especially if somebody’s self-employed, the value of their business that to keep them in business and pay them. I’m not sure that’s really, I get it. It’s probably more volatile, but, we make decisions like that every single day about volatility and underwriting, and I’m not a fan of Bitcoin coming in at all. I’m just trying to give a real good view of what people are saying, why they’re against it out there.
[David] I think, Allen, from what comes up in my mind, and Marc, I wanna get your thoughts on this a minute, but Allen, what comes to my mind is. It’s the volatility that’s there, that’s one factor. But do people really even understand it? And what is the practicality? I just don’t see this happening. But it is happening. What’s really gonna happen though is someone’s going to get there first and they’re gonna use that as a marketing ploy and they’re going to get that first time home buyer that’s into the technology, into the crypto. So I don’t want us to look like we’re bunch of old fogies and not embracing it. It’s coming and I think it’s coming. And those that do so are gonna have an earlier mover advantage and maybe snack up some business that the rest of us that are a little going, looking with a skeptical eye to it. I don’t know who these consumer groups are. And when you say consumer groups, it’s like saying they, they are against you or so I it is a nebulous thing. I don’t know what’s behind the consumer group, but I think here’s the deal. We’ve gotta be looking at innovation at all times. We know what’s coming. Crypto is here, it’s not going away. But how do we integrate it is more of the thought in my mind. And doing so in a way that keeps you at the top of the game. Allen?
[Allen] Yeah, I have other stuff I’ll save for next week because I don’t wanna switch our brains to a different topic. The only thing I can say on the crypto piece is that whoever is a first mover is probably gonna be underwriting under their own paper. Because there’s so many technology providers that need to adapt. I don’t mean just the tech, I mean our internet, our industry is so interconnected between technology vendors and MISMO and everything else we have that it’s gonna be difficult for one to take it and other’s not. It is gonna come eventually for sure, but I think it’s way too early way.
[David] Yep. It’s coming. Just don’t be left out where you’re not doing it. Marc your thoughts as we wrap up the podcast here.
[Marc] I’ll make a real quick one on this. I think we gotta be ready for innovation in all phases of our business, and we always have dealt with it over time. I think to go outta the gate right now without thinking through the process from A to z, from one to a hundred, and allowing cryptocurrency to figure into a value, a proposition and underwriting without fully understanding all the impacts to it, which we don’t know yet, I think I’m like Mr. Kittle. I’m agree with Elizabeth Warren and that’s scary as hell. So anyway, that’s where I’m coming from.
[David] I’m chuckling over that. Only Kittle can bring that up.
[Marc] Do you remember? Do you remember Sebastian Cabot years ago on tv? All us old guys remember this. He’d be on there, have a bottle of wine. He’d say you’ll have no wine before it’s time. I believe cryptocurrency and mortgage lending, is that the same way? You’ll have no loan before it’s time and I don’t think we’re ready for that right now. We can start working on it, but I don’t think we’re ready for it.
[David] Don’t ignore it. Get ready because it’s coming. But it’s like when in house you gotta stab you. You gotta keep an eye on it. Mr. Kittle, as we wrap it up. Thoughts think up to you Bill.
[Kittle] No, I don’t have anything else. I’m heading to the bar right now, Dave.
[David] So will heading to the bar because you agree with Elizabeth the Warren. It’s a drink. Starting to try drink on a Monday or in the middle of the afternoon. Bill, what about you?
[Bill] If I wasn’t in the car, I’d be joining him at the nearest bar.
[Kittle] I’m buying Bill.
[David] Alright Allen, you’ve driven us all the drinking, so what do you say? It’s great. Podcast everyone. I wanna thank you all for being here. Again, listeners, you’re gonna be hearing Alice in the mix, but she didn’t join us during this discussion, so that’s where her voice is. We’re not ignoring Alice is what I’m trying to say her segment, but we just have to play it as a recording.
[Allen] You know what, David? on that note, we should probably sell olives, we’ll call them the Lykken on Lending Olives. And we have blue cheese stuffed olives, regular basically martini olives. And we just come out with our own brand so we can help everyone enjoy their olives.
[David] Yes, sure.
[Kittle] And they can drink it with Kittle one vodka and Kittle one vodka.
[Allen] There you go.
[David] All right. We’ve deteriorated to drinking, which probably is a good time to end this podcast. Thank you so much, guys,
Allen Pollack
, Chief Operating Officer, Tech Consultant
Allen Pollack, a Mortgage & Financial Services Technology Advisor, is a subject matter expert in the mortgage origination process along with software product management and software development.
In today’s financial services push to all things Digital, Allen has been helping lenders and financial services solution providers align their digital transformation and technology strategies by removing the human element of risk, and automating processes that drive efficiencies and margins into profits.
Over the course of his career, Allen has co-created and developed technology business models that have birthed highly successful, innovative solutions and companies.
Allen co-founded and served as CTO of New York Loan Exchange (NYLX), a loan product eligibility and pricing engine (PPE) that made an immediate impact on the industry, scaling the company quickly and forming partnerships with multiple mortgage and financial lending companies. In 2012, Allen was a co-founder of a merger between NYLX and Aklero Risk Analytics that created LoanLogics, A Mortgage Loan Quality and Performance Analytics company. Allen served as CTO where he continued to bring new and innovative product solutions to the market that made a significant impact to mortgage lenders that reduced risk, scaled business channels, and grew profits in a very competitive and highly regulated market.
Allen is also is mortgage and finance technology contributor on a weekly live industry podcast, Lykken on Lending, and is launching a new podcast soon to be released, TechStack Radio, dedicated to technology and innovation in Financial Services.