Full Transcript is Below:
– Well, here we are once again. What an eventful 2021, we just completed. Greg Sher from NFM TV, David Silverman, the Founder and CEO of NFM Lending. Wow, have you come up for air yet?
– The short answer? Yes. It’s been a nice holiday seasons, nice chance to reflect on 2021 as we always do talk about what was and what’s to come, right? So, I’m excited about that.
– Well, let’s cover 2021.
– It exceeded your expectations. Is that fair to say?
– Very fair to say. We were hoping to maintain the vine. We grew from three and a half to eight and a half or 8 billion last year. We were hoping that, with the expected reduction in refinances last year, that if we could maintain the same volume, that would be terrific, but we exceeded it, we went to nine and a half, recruited some great groups, fortunate to have some great people join us and that’s where we ended up.
– And what I feel right now is a strong draft of air because we’ve got headwinds ahead. So how do you approach 2022 with an interest rate environment that’s heading north after having been through what we just went through?
– Well, I think it’s all mindset. I mean what we went through in parts of the pandemic as a mortgage company, as a privately owned mortgage company was pretty dramatic. I mean we saw extreme lows to extreme highs and then a year and a half of mortgage bliss on some levels. So when I look at 2022, like to me it’s more normalized, we’re already a purchase driven shop. We do 75, 80% of our businesses is purchase in a normalized market. The challenges will be, how competitive is the market gonna be, do our originators and our branches understand that they’ll probably have to work much harder to get the same results they got in 2021. Are they willing to make the more calls? Are they willing to develop more relationships? Are they willing to help the referral partners out more than they ever had so that they can maintain and potentially grow in 2022.
– So one of the positives that came out of the pandemic for NFM is Servicing Loans. You kind of found yourself in a position where you had to service the Ginnie pools, right?
– And so what have you learned about that and how has that helped NFM move forward?
– So for years, we’ve wanted to grow a servicing portfolio for a number of reasons that are very important to the company as a whole and certainly to the origination staff. Number one is, it is a consistent income stream for the company. So when you have ups and downs in the market, you have some income for the company to cover its expenses from servicing revenue. The other part is that you control when a borrower is thinking about making a move, you know about it right away. From the originator standpoint, they have their name, their information, their picture on every statement that goes out every single month. So it keeps them in front of their borrower in just another way.
– So we’ve had this kind of two year span of just booming production and during that time, the FinTech players have been, crashing the market and there’ve been acquisitions and all kinds of things that have happened to supposedly speed up the mortgage transaction. So, where is NFM right now in its transformation as a tech company.
– NFM knew that we had to get the ball moving on the tech world about five, six years ago. And fortunately for us, it’s moved pretty slow in the mortgage space compared to other industries. So we’ve had time to not fall behind in that area. And I think we’ve actually gotten ahead during that period of time, we’ve allocated a lot of resources, have great team in our IT department, we’ve developed great Borrower Portal and other Borrower experience Add-ons that have help the process made it easier and more efficient. And that’s ultimately what everybody talks about. Will you eventually be able to push a button to get a mortgage? We all know it’s a great marketing ploy, but nobody’s really there yet, but we’re gonna continue to move the change and NFMS right there.
– We’ve had the small sampling of companies that have tried to Institute the Push Button Get Mortgage, but the reviews are mixed. Like, what’s it really gonna look like in five or 10 years? Is it possible that you still gonna need this human interaction?
– That’s a great point, this is the actual, not only the debate, but the actual experience that we’re hearing back from borrowers is that in our particular industry, I’m not sure we’ll ever really be embracing the Push Button Get Mortgage. I think people really do want that human experience. For example, this is still the largest purchase that people make in their lifetimes, its typically their home. And the frustration of what it’s like to get through, choices on a telephone, push one for this push two for Espanol, push three if you want to go back to the menu, I mean people get frustrated with that. And if you’re doing the largest purchase in your life, I think in the end you want to have a relationship and technology. So that’s really what we’re building. And if we have to go more to Push Button Get Mortgage, we’ll know, the public will tell us what they want.
– So a lot of companies that are larger, NFM is in that nine to 10 billion range. We think it’s a sweet spot, right? But there’s some companies out there that are 40, 60, 80 billion that are gonna try and buy more business, try and get ahead and place more bets. What is your approach this year to make sure NFM is insulated from any turbulence?
– We’ve had two years of phenomenal growth, and I think this year is a really good opportunity to take on gray groups that want to join NFM but at the same time , sure up some of our processes and systems that we haven’t got an opportunity to really pay as much attention to. I mean it’s been go, go for the last two years. And people have been worn thin through operations and on the sales side. So here’s an opportunity to take care of our in-house right? take care of our people, take care of our processes, improve those things. And at the same time, we’ll take some growth along the way.
– So as an owner of a top 25 mortgage lender, what keeps you up at night these days and how does it compare to the past?
– So I don’t really worry about what’s going to happen in the mortgage industry from the things I can’t control. So my concern is, are we doing everything we can? So our people love what they’re doing at NFM and can be successful. If we do those two things, I’m sleeping pretty well.
– That’s good, I wanna talk to you about cryptocurrency if I may.
– Let’s do it.
– Your opinion of where it lies in the mortgage space. Is there room for it? Is there a day when people are gonna be buying homes with crypto? I know you don’t have the answer, but I’m curious to know where you line up on it.
– Well, let me first be clear. I’m the furthest thing from an expert in cryptocurrency, my son knows way more than I do, but with that said, I am an active player in it. I do believe in it, and absolutely, I feel like it’s got a major future in the mortgage industry. So whether it’s from smart contracts to people actually using cryptocurrency to buy homes and property in the future, we’re not doing it currently as a company but I’m a firm believer.
– Do you think there’s a place within the environment at NFM to maybe one day educate the employees because every single person in the building all 1400 employees and growing have heard about cryptocurrencies, but not everyone understands what it means. Is it important that they do understand it?
– I think it is important to know because whether it ends up being the future or not, again you just don’t want to be left in a spot where you are uneducated about it. So making your own decision as to whether you invest in it, whether you want to learn it or whether you think you’ll use it, I still think it’s a good idea to try to learn as much as you can. There’s lots of great YouTube videos about it. Michael Saylor from micro strategy, he has some great podcasts on it. There’s lots of free information out there that people can learn.
– Well, my friend that is gonna do it, we’ve done it.
– You had done it .
– And we’ll do it again.
– Thanks for having me.
– In about a year, thank you very much.
– Look forward to it.
– No handshakes these days, but we’ll do one of these.
– All right, Greg Sher, hope you’ve enjoyed this. David Silverman, CEO and Founder of NFM Lending. We’ll see you again soon. Thank you.