Jason Hartman begins the show discussing how real estate investing continues to evolve with technology and how business is getting easier as a result of the increased number of tools. Later, he hosts Jason van den Brand, CEO & Co-Founder of an online mortgage platform, Lenda. They discuss the mortgage environment and whether they expect easing or tightening in the short-term. Brand explains how Lenda is able to cut fees on the lending process and how to get started.
Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 0:52
Welcome to the creating wealth Show Episode Number 989 989. Yes, we are only 11 hours episodes away from Episode 1000 1000. And thank you all for all of your support and listenership. Over the years. We appreciate the great reviews on iTunes or whatever podcast platform you’re using. It’s been an amazing experience, what we’ve created together and the community of listeners and you know, you come to our live events and we love to see all of you and, and we’ve got two of those coming up. I’m very excited about Philadelphia on May 19. And then the venture Alliance mastermind event the week after Memorial Day in New York City. By the way, if you’re planning on attending the New York City event for the venture Alliance mastermind you can attend as a guest as you probably have heard me say before, we are going to do an extra day and we are going to go to Brighton Beach on Monday, Memorial Day and to Coney Island. So a lot of history and tradition there and I think that’ll just be really fun. To so that’ll be kind of a three day weekend or two and a half day weekend for for that event. And then of course, the creating wealth event. The only one this year by the way, in Philadelphia, we’ve never done an event there in the northeast our room block for our discounted rooms for both of these events. They’re expiring pretty soon. So it really is important if you’re already registered, that you get your room and you take care of that immediately because we have got phenomenal rates. I mean, look, New York City and Philadelphia are not inexpensive places to stay in hotels. hotels are very expensive in both of these venues. We’ve got a gorgeous Hotel in Philadelphia and New York. I mean really just swanky nice hotels. And we got amazing prices really truly amazing prices. I mean we don’t always get amazing prices but this time we did on our discount room box. So take advantage of Go to Jason hartman.com. Click on events and register for those. And we’d love to see you at one or both of those events. So today, we are going to talk about financing about mortgage financing. And this is kind of a different show on financing. What I want to share with you today is a one of the more modern web based approaches to financing, not saying that you should run out and do it, maybe you should, but there are a lot of options out there. You know, whatever your pains are in real estate investing. This is one of the things you can know. You know, we all have frustrations, and we all have difficulties and things we wish were easier. Well, here you go, you’re ready. It’s only going to get better. Yes, it’s only going to get better. Why is that? Well, because it’s an amazing time to be alive. It’s an amazing time to be alive and There are so many tools and technologies that are transforming our world as real estate investors. Of course, we have the most historically proven asset class in the entire world. That’s what we’re a part of folks, the most historically proven asset class in the entire world. And all of the pains and problems with that asset class are slowly but surely getting easier getting better, or just disappearing all together, whether it be all a cart, property management services, whether it be technologies, like the financing that we’ll talk about today. Anything I mean, look at folks
Jason Hartman 4:43
think about how it was in the past, you know, if you wanted to look at the broad investment landscape, and be able to invest in properties that were not close to you. It was really hard if not almost impossible to do. But now that’s possible. And of course with that, it has come new challenges, no question about it. But with the services we provide, and the technologies available, it is so much easier. I mean, look at what I’ve done in the past two weeks. Okay. I just got home last night, got back to Las Vegas, of course, we hosted the venture Alliance mastermind at the Ice Hotel in Sweden. We took a helicopter tour over Stockholm. I flew back to Fort Lauderdale. Then I drove to Tampa, Florida, spent two days with friends and investors at a real estate mastermind group then flew with one of those people to Puerto Rico, hung out with her for a while and then buzzed over to the other side of the island in Puerto Rico, hung out with some other friends looked at properties, both in Coronado in San Juan and on the other side of the island and in Dorado It’s amazing, you know, all that time I was using various websites and internet based tools to be more knowledgeable when I was in all of these markets. Also, I should say, I looked at stuff in Tampa as well. I was online I was researching while I was there seeing the property. So it’s kind of like, you know, we talked about, well, there’s reality, then there’s virtual reality, but in between reality and virtual reality, there’s AR, augmented reality. And of course, a good example of the augmented reality technology that you’re all probably familiar with is Pokemon Go. Okay, this amazing thing. You know, this game that just was so incredibly popular, what was that? year and a half, two years ago, when it was just sweeping the world, right. I met with Kevin Harrington saw him speak at an event in Tampa, as well. That’s another thing I did there just didn’t even remember And he was talking about Kevin Harrington, of course, he was, you know, one of the sharks on Shark Tank for a while, and he’s the founder of As Seen on TV. You know, the guy’s got an incredible career. I interviewed him on the show before. And I’ve met him a few times. But in talking with him, you know, he was sharing some information about the absorption rates of various technologies, and how incredibly fast the absorption rates are today or the adoption rate, I guess you could call it either one, compared to the old days where things were adopted or absorbed much more slowly than they are today. You know, when I talk about augmented reality, I’m not talking about it in the sense of Pokemon Go, but really being in Stockholm, being at the Ice Hotel in the Arctic Circle in Sweden, being in Fort Lauderdale, which by the way, I am very much thinking of moving to Fort Lauderdale, you know, I’ve been looking for a new home a new city, and I want to Try live in a couple different cities. You know, for many, many years, I stayed in the same place it was in Orange County, California for the vast majority of my life. And, you know, I just want to try some different stuff. So if you have any thoughts, Fort Lauderdale, that’s I’m really thinking of moving there. Okay, moving on. I’m in Fort Lauderdale. Then I’m in Tampa, then I’m in Puerto Rico in three major parts of Puerto Rico. And then I’m back in Fort Lauderdale. And I’m looking at properties. I met with a realtor yesterday in Fort Lauderdale, met with four realtors in Puerto Rico. And you know, all this time, I’m almost dealing with augmented reality. Why do I say that? Because even though it’s not as cool as Pokemon Go, which, by the way, I never played the game, but I did have a friend show it to me once. And it was kind of interesting, because I’m using these various web based tools that we all have nowadays to research property prices literally as I’m on On the golf cart, looking at properties, in Dorado in Puerto Rico with a realtor, right, I’ve got my phone, and I’ve got the internet there. And I’m using these tools to research and see the property prices, both in rent and value. And it’s truly amazing. It’s an amazing time to be alive. And so today, we’ll just share one more of those tools. You know, again, no big deal, just an option out there. And there’s a lot of this coming our way. Whatever pains we have, just know that they will get easier, better, cheaper, more efficient, everything is so efficient nowadays. It’s amazing. It’s truly amazing. You know, I spend a fair amount of time traveling in a fair amount of time in hotels. And one of the new practices that I do somewhat frequently is, you know, when I need something at a hotel, I just ordered it online and have it shipped to the hotel. You know, I remember I was in San Diego at a conference not too long ago and I forgot the charger for my computer. The computer, you know, was gonna run out of juice pretty quick. And I just bought one online and shipped it to the hotel I walk in, pick it up at the front desk, Mr. Hartman, your packages here, boom, you know, easy, easy, easy. This kind of stuff, folks. We take this for granted frequently. We really take this for granted. It is amazing. Just to think about how people starting a business today. You know, there’s a book called the hundred dollar startup, right? I haven’t read the book. I’m not recommending it. I’m just saying it’s a catchy title. You can start a business so easily, so cheaply nowadays. Do you remember how it used to be just not too long ago, if you had a business and you had people working for you, you had to buy a Microsoft Office license unless you’re going to break the law which many people bid for every seat for every desk. Now. All these tools are basically Better and 30 either free or cheap online in a cloud computing environment. So do we realize as investors how much easier all of this stuff has become, you know, just think back, remember how it used to be compared to how it is today? Okay. So, I want you to think of these things in terms of property management. Now, you know, I have commonly complained about Wall Street, Wall Street, the modern version of organized crime. And commandment number three and my 10 commandments of successful investing is thou shalt maintain control. When you relinquish control to somebody else, you leave yourself susceptible to three major problems. Now with our properties, this happens to a much lesser extent, but it does happen to a very small extent when it comes to that. Property Management world. And again, this is why I want to really encourage you to consider self management. It’s not for everybody. It’s not perfect either. But in a lot of ways, it offers a lot of options that really can be better than having a manager easier than having a manager, and certainly less expensive than having a manager. Because managers some of Now listen, we have great property managers in our network, and they are worth their weight in gold. But you know, we have a couple difficult ones too. And sometimes it’s just easier to just do it yourself directly to disintermediate, the property manager because you can do this with technology tools that are available today. From a distance. One of the tools that I’m starting to see crop up that could be good in dealing with managers or directly with repair people. Is, and I’m just going to share this with you as a concept, not naming any specific tools, but one of them that we looked at at a real estate conference last December in Phoenix was homie, H, Om e, okay. And I’m not necessarily talking just about this one, they’re only in a few markets. But here’s the concept of the broader concept of this. And that’s what’s important. The concept of these smartphone apps that you can send a repair person, a maintenance person to a property, and they can take pictures or video and it’s geo stamped for the location. So they can’t cheat. Okay, they can’t be showing you a picture at a different location because it’s geo stamped. And of course, it’s time and date stamped. And then it’s just like being there. You know, it’s amazing the kinds of tools we have That are starting to overcome a lot of the pains and a lot of the cheating that happens in the world of contractors and repair people and maintenance people and property managers. So whether you disintermediate, the manager altogether, or you leave the manager in place, there are so many great accountability tools available to you nowadays. And we’ll be of course, profiling more of this as time goes on, and in upcoming episodes, and we have profiled in some of the past episodes as well. But just know that whatever challenges you face, it’s getting better. It’s getting easier. And, you know, you own your properties over the next five years. 10 years, 15 2030 years. I mean, where else can you get a three decade long, incredibly cheap, fixed rate loan? Answer nowhere else only on your great properties because income property is not only the most historically proven asset class in the world, it’s not only the most tax favored asset class in America, but it’s also the most debt favored or debt friendly asset class in the United States, and probably the world, but around the world, you know, talking to Mr. Jason here, who’s been to 81 countries and looked at properties and so many of them met with realtors and are well not realtors, but brokers, real estate people in so many parts of the world and looked at properties. The US has a very special market, certainly better financing, but better things in So, so many ways. So hey, I’m rambling. Let’s get to our interview today. And be sure to go to Jason Hartman comm click on events join us in Philadelphia on May 19. And consider joining us for the venture Alliance as a guest in New York City the following weekend as well. I will be up in the northeast for that entire week. But Between these two events in both cities, and looking forward to enjoying the Northeast a bit again, this is our first public seminar in the northeastern United States. So, and it’s the only time we’ll be doing creating wealth, my core event this year. So join us for that Jason hartman.com. Click on events and get yourself registered and get your hotel room blocked before it expires.
Without further ado, let’s get to our guests today and talk about some lending or financing technology for real estate investors. It’s my pleasure to welcome someone with a good name, Jason Vanden brand, and he is CEO of lendo. They are an online digital platform, helping people purchase or refinance well not purchase properties, but get purchase money. refinance loans on properties. He’s got some good insights into the market and is using some technology to hopefully make it easier for you, Jason, welcome. How are you? I’m doing fantastic. Thanks for inviting me to the show, Jake. Good. So we’ve got Jason squared. I hope our listeners don’t get too confused with this interview. Tell us. So first of all, what is Lynda in in the FinTech world? It’s interesting seeing some of these new business models come to the fore.
Jason van den Brand 17:29
Yeah, Lynda helps consumers get an honest back home loan 20 473 65 completely online. So I would think of it as a single place to shop and compare your home loan options as well as manage your home loan or Home Loans if you own investment properties. And ultimately, the way to think about it is our technology helps homeowners in 30 minutes accomplish more than most mortgage banks or regular banks do in two weeks. And that saves That saves money, and a whole bunch of headaches in the meantime. Yeah, good stuff. Do you offer financing nationwide? We’re not yet nationwide. We started in 2014. And our pilot market of California, we exited last year 2017 and five states, which include California, Washington, Oregon, Texas, and Colorado. And then just this quarter, we just expanded into seven additional states, the most recent ones being Florida and Georgia. And we’ll be announcing another state here shortly.
Jason Hartman 18:33
And are you a licensed mortgage company or your referral network,
Jason van den Brand 18:38
or about where the actual lender so we don’t broker these deals. So when a customer works with lender, you’re actually going to transact with us. So the final loan documentation that you sign and all funded monies to buy or refinance your home is actually done by us. So you can think of this as you know lending tree 2.0 rather than you know us taking your information and selling it to other lenders who are then going to tell the market unit death, we’re going to actually keep you online and allow you to transact and complete the loan for you. Okay, good, good stuff.
Jason Hartman 19:09
So what is going on in the marketplace? Obviously, people are concerned about rate increases. The Fed is definitely tightening things, they are changing. Okay.
Jason van den Brand 19:22
They certainly are. And I think what we’ve seen in the market based on traffic to our website, and just general market data that everyone has access to at this point, you know, I think there’s been a lot of media suggesting that mortgage applications are declining this quarter because of rising rates for us, we’ve actually seen an increase in applications for both refinance and purchase loans, because there’s volatility in the market. So if markets are going from 5% to 4%, pretty quickly, people tend to wake up and say, oh, there’s a great opportunity here. And on the flip side, if rates are going from 4% to 5%, and there’s volatility there, people They’ll say, Well, I’d like to get in here before it goes up any further. So what we think is going to happen here this year is rates are going to continue to increase, but customers are still going to continue to purchase homes and refinance, buy investment properties where opportunities exist. And ultimately, we know that people are looking for a better mortgage experience, which is why we built this technology to make it fast and convenient for them to get that loan online.
Jason Hartman 20:24
Yeah, I mean, volatility definitely creates urgency. In fact, I would argue that I mean, my many years in the business, you know, when you see rates going up, it creates much more urgency than when rates are declining when they’re on the declining slope. It seems like people just they just don’t feel much sense of urgency, but the fear of loss drives people I think, no more pronounced fashion.
Jason van den Brand 20:49
Definitely it goes both ways. It goes both ways. And I think, you know, we’ve researched and work with thousands of homeowners now and when rates are going down, people tend sit on the sidelines, as you suggested correctly, thinking that they’ll just get to it. And we would ask them, we’d say, Well, how come we haven’t gotten to this yet? And they’d say, well, it’s such a pain to actually get my home loan, but I just, you know, I’m just not looking forward to it. And so again, you know, our technology helps people from sitting on the sidelines to actually getting this done fast. 30 minutes online closing loans, and 15 to 17 days, which is about three times faster than what you would get if you worked with a traditional mortgage bank. And again, an online portal where you can manage the entire process, you know, where everything stands, 20 473 65 for any of those night owls out there,
Jason Hartman 21:37
so what really is the technologies, it’s simply a platform that collects documents and makes it easy to sort of manage them because there’s a lot of documents and financing a property, of course, or is there some, I mean, what’s the technology behind it?
Jason van den Brand 21:54
Yeah, I mean, that’s a part of the technology is certainly document collection, but more importantly than that, and I think For anyone that’s ever been through a home loan process, which is myself and you, and certainly all of your listeners, it’s which documentation, right? So think about your last home loan experience where someone called you up, for some reason, always at the 11th hour and and said, oh, by the way, I need this document. And that document, this document should write this letter at the very last minute. And suddenly, stress levels spike up. And you’re sitting there wondering if you’re actually going to get this property, whether it’s the home where you’re going to move your family into, or an investment property that’s getting you a great ROI. No matter how you slice it. That’s a pretty terrible experience. And so our technology has predictive algorithms that underwrite your data as you’re putting it into the website. And so for a customer’s experience, you’re going to find out a couple things right out of the gate. Number one, what do you qualify for? What are the rates? What are the fees and what are they to the penny? We build technology that integrates across the entire market to deliver that. We’re also going to have you fill out a dynamic application. So if you are a customer that is W two versus self, and The questions we’re going to ask you via our tech is gonna be very, very different credit scoring, what kind of documentation do you actually need to sign from a compliance and regulatory standpoint, whatever getting those stacks of paper in the mail from FedEx, those days are gone. So all of this happens electronically, right on the site in 30 seconds, and then which documentation we need you to get. After that. You’ve got an account to log back into again and see exactly what’s happening with your loan. So is your loan approved? You want to know that you’ll get a text message, you’ll get an email, you can log into your lender account and find out why don’t we signing this thing? Where are we signing it and most recently, we’ve actually just launched a pilot program in Washington state, which is going extraordinarily well, where people are actually signing the final loan documents online as well. So no longer do you have to have a notary come to your house, you can do this all electronically with a webcam and digital signatures. And so, again, all of this combined is allowing customers to complete these transactions in 15 to 17 days and for anyone out there, as you know, as well as I do when you’re in a competitive market, and you can put on your offer to buy the property, and you can say, I can do this in 15 days, you’re now competing with cash offers. And when you’re leveraging money, and you’re investing in investment properties, we all know that that goes a very, very long way to making sure that the answer you get back is yes, let’s get this deal done. And are you a mortgage broker? Do you have your own warehouse line? Are you doing mortgage banking? And are these traditional Fannie Mae, Freddie Mac agency type loans or tell us about the variety of products? Yep, we’re not a mortgage broker. So we actually bank these loans. So we’re what’s considered a mortgage bank. This is typically Fannie and Freddie products, but we do offer some additional products that are outside of the quote unquote, Fannie Freddie window, and then we’re going to sell those off to whoever that investor is as well. So yeah, pretty much right down the fairway. However, you If you’re buying a primary residence or a second home or vacation home, or if you have an investment property, again, where tenants are paying rents, we can do all of those through our platform. If you want to what’s considered an FHA deal, or jumbo loan, approximately $700,000 loan amounts are higher. The experience for the customer is exactly the same. We’re going to get the right information at the right price, and get all the right paperwork in place at the right time. And again, all of that happens at your lending account within minutes versus having to go no bank or deal with telemarketers or your mortgage broker calling you back and forth.
Jason Hartman 25:33
So can you deal with a person though? Is there a person you can call and talk to on the phone?
Jason van den Brand 25:39
Yeah, there is. Absolutely.
Jason Hartman 25:39
And are they? Are they licensed? Are they a licensed mortgage person or are they a
Jason van den Brand 25:44
Yep, they’re fully licensed compliant. From each state that we worked in. We’re required from a regulatory and compliance standpoint to have people on staff that can answer questions anytime. A question arises around rates or fees Or programs, there has to be a licensed representative on the other side of that email, chat and or phone call or text message to answer those questions. And so we have a dedicated team that works with any customers, should they have any questions? And if they don’t have questions, again, the technology’s there, and they can manage this process entirely. Generally, we speak to anywhere from 80 to 85% of our customers at some point, with their dedicated support agent that walks them through the process and answers any questions that our technology does not.
Jason Hartman 26:31
Do you have rates available? Can we discuss rates for a moment?
Jason van den Brand 26:35
Yeah, the best way to get rates in this case, go to lynda.com. Because it varies on the scenario.
Jason Hartman 26:41
Well, I just want to make sure that the investment property the non owner occupied stuff is there. So if I look on buy, you know, I mean, the feeling is you’re really designed for traditional homebuyers, which is most of the market I understand that. Where do I get the rates? Like I don’t see rates here. It seems like I have to apply and go through the whole process to get any sort of, well, no, there’s 30 year rates down here. Okay, so down at the bottom, it’s tucked down there. Yeah. So let me walk you through it. So and this is this is refinance, okay, purchase. Okay, so here I’m gonna I’m gonna do it myself now. So I’m going to say I want to purchase $120,000 property. And again, I don’t know, the states off the top of my head, I know you told us those before. And let’s say I’m putting, see there’s no question as to whether it’s owner occupied or non owner occupied. That’s the problem
Jason van den Brand 27:31
that comes in later. But if you say put $120,000 purchase price in and let’s say you’re putting $30,000 down to buy the property, and let’s say you’re doing that, in California, although Sorry, it’s not gonna be in
Jason Hartman 27:46
California, it’s gonna be in one of the linear, you know, markets that make sense,
Jason van den Brand 27:49
right as an example, to get to pricing which is your question right? We’re now going to ping the market and find out exactly what you qualify for based On those parameters, and so let’s say for example, that was in Georgia, let’s say it was in Pennsylvania, and let’s say the rates and the pricing was different for each of those states, you’re going to get that access versus some blanket rate quote table that says rates as low as 3.75. That’s very easy
Jason Hartman 28:17
to discover later that
Jason van den Brand 28:18
there’s a premium. Exactly. And so all that false advertising that exists out there, we’ve gotten rid of that. So we asked for four pieces of nondescript information to generate a custom rate quote for you. And then you can select later on in the process if it’s a non owner occupied property, meaning an investment property if it’s a second home, second home and primary residences, the same exact pricing.
Jason Hartman 28:42
No, they don’t. I mean, non owner is more expensive. They do for us.
Jason van den Brand 28:46
Oh, well. Then second home. Yeah, and primary residence. Oh, okay.
Jason van den Brand 28:52
But non owner investment properties carry a bit of a cream, right, right,
Jason Hartman 28:55
right. So that’s what I want to find out and you can’t do that directly on the So after you do that, quote, what’s going to happen? You know, you plug in that information, you plug in the property, zip code. And then what do you get an email back, you create an account, I’m sure. And then you tell them what
Jason van den Brand 29:14
not to do real quick just to interrupt here because you’re stating false information. Okay? No, no, I
Jason Hartman 29:20
don’t want to I want to be correct. So go ahead. Yeah. Yep.
Jason van den Brand 29:23
Good. I want you to as well because it’s very important. Okay. So if you click on Advanced Options, and you drop down properties, it says investment property. And if you select on that and said, click see my rates that will price automatically into that scenario. Okay, perfect. I don’t see advanced options. Where do I Where do I do that? If you’re at lynda.com? Yep. And then you select get a loan estimate.
Jason Hartman 29:44
Oh, not at the top. Don’t go look it down. It’s a lower rate words. 30 year rates, right? You do buy a home,
Jason van den Brand 29:51
buy a home or get a loan. So yes,
Jason Hartman 29:53
it’s about time someone makes this easier. You know, Jason, I gotta tell you something that has always amazed me. I think can go and I can get a loan on an airplane, or a yacht or a car, and I can get it approved quickly on a piece of depreciating collateral that moves, right. Yet to buy a home on a piece of usually appreciating collateral that’s very solid and stable. It’s going to take at least 30 days, this is bass ackwards the way the lending industry works, does that amaze you as much as it does me?
Jason van den Brand 30:31
Oh, of course, in a lot of ways, it’s a big reason why we started this Yes, for those exact points. How can we get to a point in home lending where we can, as a lender actually get homeowners, homeowners to be the capital that they need to buy and appreciating asset within minutes? Yeah, and the short answer to all that is when we first started the business, we were able to get loans done in 45 days which frankly, is about industry average, the industry average is actually about 50 days from the time that you put in information, whether you walk into a bank, or put it into a website until you actually get the money, it’s 50 days, sooner or later by the technology that we built, we got it down to 30 days. And now actually, last week, we just broke a record, we got it done in 13 days, from the time that someone at our website until the money funded. And now, again, where that becomes really critical. As the point I alluded to earlier, how do we even get it faster? Now, the regulations, the government says you’ve got to have 10 days or some way in the periods right before you can actually fund the loans because they want you to review documentation and all these kind of things. So I think we’re excited to get to that minimum threshold here this quarter, next quarter, and then start having conversations with legislators to say, look, we’ve got an online platform that can actually do this faster. Can we help customers, you know, this is this is really it’s becoming a liquidity event for a customer. Can we move this along faster? Will you work with us and I think and I think and I hope that with enough customer demand We can get to that point as well.
Jason Hartman 32:02
That’s fantastic. So speaking of regulations, and I don’t know if if you guys are really tracking this kind of news much or maybe you are, but Dodd Frank, I mean, Trump has said that he wants to get rid of Dodd Frank or at least, you know, weaken, soften it. And I haven’t really been hearing much about Dodd Frank lately. Are we going to see the lending market? I you know, I think after the Great Recession, it just overcorrected.
Jason van den Brand 32:29
You know, a correction was definitely needed. I mean, it was way too liberal before that. But I think that really overcorrected. Are we going to see some loosening of regulation in the mortgage world? I think so. And I agree with you. I think that, you know, Dodd Frank and even the creation of the CFPB, which, you know, again, after all the processes actually went live in early April 2011. And it was necessary. I mean, we have to remember as a country, and as real estate investors and homeowners That things got way out of control through 2000, all the way through to 2008, the eventual resection. And now we course corrected, if you think about it, we’ve actually proven that we can grow and appreciate home values through underwriting guidelines to actually make sense. Now, simultaneously, companies like lenda, and certainly other companies out there have been pushing forward a more digital tech driven model that gives us a higher quality product with direct from source data. And so what we’re ultimately getting to is, we can actually start to underwrite and have it be a little bit more common sense. So let me give you an example. Do we really need to use a W tos? Do we need that from a borrower? Is that required on every single home loan? Do we need to analyze all of your 1040 every page and every schedule, if we can get the data directly from the IRS? Right. So these are the kind of common sense things that technology is allowing us to do as an industry. And for the customer, it’s going to feel easier, even though we’re still going to be underwriting the data as lenders because you know, the risk is on us. For the customer in the future, it’s going to get to a point where you’re going to put your thumb on your phone, and we’re going to look at the thumbprint. And we’re gonna be able to pull all this data and tell you within seconds if you actually qualify for a home loan, and that’s where the future is going. That’s, that’s what’s coming down the pipeline here. And we’re years away from this, but it’ll be here before we know it. Yeah, yeah. Well, let’s have it
Jason Hartman 34:37
come sooner rather than later. That would be great. The other part of it that just amazes people and astounds borrowers is the the level of fees. I mean, the fees are so high fee for this fee for that fee. You know, they even call them garbage fees, even lenders call them garbage fees, and they’re charging them any thoughts on fees are your fees the same Are they lower? Do you save consumers any money there?
Jason van den Brand 35:02
We do. Yeah, we actually lend to don’t charge any fees. And so when you think of fees that a lender controls, they’re called lender fees or origination fees when you’re looking at your paperwork as a consumer, this is, you know, a critical point here. So if you go to work with a traditional bank, or say Quicken Loans, you’re going to pay upwards of $2,000, and garbage or junk fees, whatever you want to call it. For things like processing, underwriting application fees, lender doesn’t charge any of those zero has always been zero, it will always be zero. And I think that’s just a way for traditional lenders to make more money. It’s fee revenue. We all know in business, that that’s where banks actually make their monies and fees, ATM fees, whatever, late fees, so on and so forth. And so we’ve gotten rid of those and what we’ve seen is that’s really helped customers save money over the life of the loan number one, because of Technology, we’re producing these loans at a cheaper cost, I don’t need to pay someone commission, you as a consumer don’t need to pay someone commission, a bank or a broker, whatever, in order to get this home loan anymore. So from my cost as a business, just getting down to brass tacks, I can produce these loans upwards of 50 to 60%, less than a traditional bank. Now I can pass that savings on to a consumer, I don’t need to charge them fees. And my interest rates are lower. And so we’ve seen our average customer when we compare them against the Wells Fargo or Quicken Loans number one and two respectively. They’re saving close to 50,000 bucks over the life of the loan between lower interest rate and the seeds. And that adds up, it’s added up to over $25 million now, and we’re feeling pretty good about that right now.
Jason Hartman 36:45
So how do you make money without charging fees? I mean, you if you’re not charging the garbage fees, you’re getting the points or you’re pricing the loan so that it’s well while above par. I mean, that’s what every mortgage broker does. You know, that’s normal. But
Jason van den Brand 37:00
where do you make your money? The main difference with lender is unlike a bank, we’re not going to collect your monthly payments. And so we sell the loan into a secondary market, which is what? basically everyone that’s not a depository institution bank is doing. And then we get paid a premium for that service and right, so a customer will not currently make their monthly payments to the lender. But in the future, as we continue to build the business, our customers have actually come to us. Think of them with their picket signs up and saying, we want to make our payments. The lender, we don’t want our loan to be sold off to Xyz servicer, and then we have to go and create another account there and get all the paperwork in the mail. We really liked the online experience. So Linda, would you please build this into your platform? And our answer is a resounding yes. Our product roadmap puts us having that complete in early 2019. And then that way people can make their monthly payments here as well. So right now that’s how we make money in the business. Smaller world a little bit more.
Jason Hartman 38:01
Yeah, sure.
Jason van den Brand 38:02
Okay, good stuff. Well, hey, I know we’ve got to wrap it up. But just any predictions on the economy or what to expect in the real estate market or the financing markets or anything you want to close with there. And ultimately, again, what we’ve already talked about is we’re gonna see interest rates rise in the purchase market, people are still going to be purchasing homes on the refinance market. There’s still common sense applications of refinance here instead of people saying, well, I want to lower my interest rate and get a low monthly payment. What’s happening now is people are moving into getting some of the equity from their home to consolidate debt or more often taking a little bit of cash to improve their home and get a higher valuation on that home. So things like fixing up kitchens and bathrooms or landscaping where you’re going to retain that value. We’re seeing that happening a lot more in the market. I still think just based on you know, my vantage point that real estate still make sense from an investment long term. The saying you don’t wait to buy real estate, you buy real estate and wait, I still think there’s opportunities out there for investors. And so we’ll see, I think, you know, again, the mortgage market is huge. It’s $1.8 trillion last year, they’re estimating. It’ll be like 1.7 trillion this year. So I still think again, it’s a small little drop, that people were always gonna be buying and selling homes. And so there’s still opportunity out there for certain.
Jason Hartman 39:23
Fantastic. Well, thank you so much for joining us, Jason.
Jason van den Brand 39:26
Yeah. Thank you, Jason. I’ll be talking to you soon. And thanks again for the invite.
Jason Hartman 39:32
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