Modern Lending Podcast | Sudhir Nair

Join Sudhir and myself as we explore the tech behind it all and how its made our jobs a little easier.

In this snippet of the Modern Lending Podcast Live...

  • What makes a company a mortgage company or a FinTech company
  • What it means for a company to go all in to tech
  • How Sudhir sees his IT team and business team side meld
  • What is the main purpose of the tech behind the business

Episode Transcribe

[Alec] There it is. Whoo, welcome everybody to another episode of the "Modern Lending" podcast live. I'm back in the studio feeling feisty today. It's gonna be a really, really fun conversation. I have with us right here, I gotta read it 'cause he has two titles, Chief Information and Chief Technology Officer for loanDepot, Sudhir Nair. Now, we actually go back, Sudhir to like old school, country[Sudhir]wide days. So I'm really excited to bring on Sudhir to talk about the future of mortgage technology, where it's going because so many loan professionals, mortgage salespeople see mortgage technology as either a threat, as something to be afraid of 'cause it's gonna take their job, or they see it as something that's gonna be a savior, it's gonna come in and it's gonna do something and it's gonna radically change their lives and there's a lot of myth and a lot of fuzz and we're gonna carve through that. So let's bring on Sudhir. Right on, Sudhir, good to see you my friend. Oh, I wish we could be in person but COVID is just ravaging the country and it's making it hard, but thanks for joining today.

[Sudhir] Good to see you. I like you looking good.

[Alec] Oh yeah, I got my quarantine beard that I told my wife I was gonna shave when we are back to work and now it's looking bad. Like I'm never gonna be able to shave it 'cause we're virtual forever.

[Sudhir] Still looks good on you, though.

[Alec] Oh, man, so thank you for joining. We were talking a little bit before going live. You've been leading the charge at loanDepot now for a little over nine months[Sudhir]ish. Getting in, making changes, stirring things up, and I would love for you to share a little bit about your background 'cause people always going frame up like, "Who is this person that's running technology "and information for loanDepot?" So share a little bit about where you came from, what you're doing and how you got into this space.

[Sudhir] So technology's been my forte since I left high school. So, I went to computer school engineering, engineering school, so that's my undergrad, did my grad also on Information Systems Engineering, so there you go, so that's how it started.

[Alec] Wait, I got a , you're gonna laugh at me here, but I gotta tell you this. So at school, up at Berkeley, I took one computer science class, just basic coding, just figuring out like how it all works and I missed the final because I got my dates screwed up. I was a freshman, I was stupid. And I went back to the teacher and said, "Can I make it up?" And he's like, "Sure." And he made me do it all by hand. I had to hand write all the code on this thing and I failed miserably 'cause I couldn't check it and check it and check it, so, that was the end of my coding experience.

[Sudhir] I do have a story though that I gotta tell because I was not headed to the computer science school. I was headed into becoming a doctor. So, I start that side of the house for a few weeks before I ended up going into the engineering line and things like that and then first job was at Hewlett[Sudhir]Packard, so they've a lot of work there in terms of writing operating system and such. So it was mostly heavy duty tech and writing databases, writing OS is very different than commercial applications and so on. And then that led me into another area which is mostly to detect fraud and passport frauds, and cheque frauds and so on and so forth. It's a sort of a different type of sophisticated algorithms, detection technology and so on and so forth. So I spent a lot of time in Europe, Middle East and Africa and things like that, implementing systems like that, engineering systems like that. And then I left on and moved on to other areas. So I came into, believe it or not, supply chain retail and it was the times when supply chain distribution retail was changing and then there was also this threat of E[Sudhir]commerce, if you will, at the time that started. That was in the '90s. So, part of that industry worked for a leader software technology company that was a leader in that space. I did a lot of work there. The likes of several names that do not exist or have been consolidated to Amazon and worked on some really cool stuff there with writing routing logistics, distribution management, automation of some of the warehouse inside the house and the best route to take for a track to deliver the item as fast as possible and some really cool stuff like that. So got very much in that industry and then giant, Washington Mutual, as the E[Sudhir]commerce and online banking team which is the E[Sudhir]business team. So that's how I got into banking and financial services and so on and so forth. And then after launch of some of the very critical platforms there and getting them into the E[Sudhir]commerce side of the house, I was hired into Countrywide which is the first time I actually got into the mortgage side of the land and I had no experience in knowing anything about mortgages at that time. Other than the fact I owned a home and paid my mortgage. That's all I knew about it. And so, it was very interesting because I came in and saw the model, the country where I put together, it was actually the beginning of the boom, that was 2003, beginning of the boom up that rates going down and everything is increasing in terms of demand and so on and so forth. Home affordability also is actually become pretty good. So I actually sat in a retail branch, I don't know if you recollect in Santa Monica on your beach, it was like on the 14th floor or something like that. For two months I sat there because if I'm going to be developing technology, I better know what the business is. So I actually sat there side by side with the origination team there, kind of saw how they . I actually did help, when the assistant was not available, I actually helped and I filled the 10 on three. I did all the actions. So that was fun. And then I actually responsible for, taking the mortgage solution at Countrywide to the next level, which we did, which, as you know, we had several different systems over there. So that was an incredible experience and then on came into Bank of America where I actually worked also on the servicing side of Countrywide and just on technology, of course, and then managed a very large servicing portfolio there. And then, did a lot of transformation of that platform and then after that Bank of America acquisition, I worked on both servicing originations, some on the title and closing side of the house and so that was the next path. And then after that took me on a path to work for Mr. Cooper. So there, we launched Zone which is a marketplace with auction and so going into another digital transformation, you could say, but you could also argue it's actually a transformation of the real estate, proud of itself and auction was a completely brand new game, and doing an online auction was even cooler. So that was fun there and then I actually took a little bit of a hiatus into a completely different industry. I just wanted to test my waters somewhere else. So I went into higher education. So the largest provider of higher education online, a company worked there, they actually manage online programs for major universities in US, about 55 of them and things like that. And then I noticed how similar the industry was to what we do in the mortgage side of the house, which I actually if I look back, whatever I learned in supply chain, and retail was actually portable into the market in the last three years, portable into that and then I came back into the mortgage space because I got all the experience I needed into some of the new technology areas and the new environment. And one of the things that I was very particularly interested is to get that external experience so we could bring it back into mortgage because mortgage technology has always been in the backseat, if you will and also catching up pretty late, and so on and so forth.

[Alec] You think? I mean, like when I started in the game, like it was an MS[Sudhir]DOS[Sudhir]based system that you had to tab through. You couldn't use the mouse. That was the pinnacle of the tech.

[Sudhir] Absolutely, so that's my journey and here I am in loanDepot. And what a great time to be at loanDepot.

[Alec] Oh, I know, we're having a blast and this is fun. So real quick, we're getting a ton of fun comments and a bunch of viewers right now. Please type in where you're viewing us from. I love to kind of see that, just kind of like where people are tuning in to right now. Most of the reach of this podcast comes later when people actually have time to listen and consume. And so I know we're just diving into your day, but if you're choosing to join us right now, type in on the comments. In fact, Sudhir, give me two seconds 'cause I gotta click a button. All right, I'm shorthanded, I had to click a button and I see everybody, Bay Area, Nashville, awesome. Now I got comments flowing in so this is really cool. Mike Brown saying, "We need to get Sudhir one of these cool mics." Yes, we'll figure out how to do that. Okay, so, Sudhir, this is gonna be fun. So now you're back in mortgage, you've got all this experience, you got a huge track record, tons of fans, which is fun. I was joking with you earlier how the bunch of people on LinkedIn, we're already being like, "Can not wait to hear what Sudhir has to say." And to your comment earlier, man, technology and mortgage is behind. It's been behind for a long time. And so, let's just open the conversation up to where it's going and why did it take so long and what happened in that perspective, from your perspective? I'm assuming the crisis played a role, but what have you seen and where are we going and what are you excited about?

[Sudhir] So, I think, technology is not just in mortgage that it's actually pretty backed up behind. But if you look at banking and financial services industry as a whole, you still see a lot of challenges with technology being behind. I think the consumer banking side of it is probably in a much better shape than some of the other parts of financial services then, where we are, and that's mostly because it was more of a necessity than a need, so it just... The onset of the web revolution which happened in the '90s and then followed by the mobile revolution which came after in 2000 changed a lot of that and kind of made it more of a necessity than choice. So I think that's one. But if you look at mortgages, just the sheer complexity, the nature of how you get a loan because it's a, unlike a consumer[Sudhir]lending environment or a credit card, et cetera, this is secured debt, your house is the security. So, it's a complex process, because it involves a lot of, there's a lot of complexities involved and you gotta make sure that you... It's not about checking off boxes and things like that, that's one. The other part of it is, it's the decision making process is very different. As an individual, if you think about it personally, the decision making process to buy a home is extremely important. It's a life changing event, it's a life event, right? Followed by that, you gotta go and secure a loan is also a very emotional purchase, if you will. It's not like going to Amazon and buying something, that's not an emotional purchase. This one is very emotional.

[Alec] Well there's involved when you get your gift, even you get your package the next day. So there is a little bit of that going on. You're right, you're totally right.

[Sudhir] It's emotional also because you've got decisions to make. As a borrower or a consumer I have decisions to make. So I cannot make those decisions sometimes without having all the information in front of me. So the first thing I would do is rely on an originator that I would work with. Why? Because that is the person that's gonna help me get all the information as well as the permutation and combination of scenarios that based on my, what you call as my financial ability, as well as the characteristics of the home that I'm buying and so on, so forth. So that's a very complex process if you think about it. And I always think that if you work with a investment banker, if you work with a financial planner, you actually have that information exchange and talk to them about how you wanna manage your investments so that you have a good retirement fund. The originator or the loan officer that you work with is like that because they have to be like that. Because not every individual or a property is going to be the same. And so that three[Sudhir]way conversation between property, the loan and individual's very, very different. That's a lot of permutation and combination. So that cannot be addressed without having the right data, right information. Right information as in what is the right loan product that fits me? There may be five or six of them and I'm sitting here thinking, "Wait, how do I make a decision? "Which one should I go with?" So that's the complexity. Now, while this is happening, and the complexity is still there, on the other side technology is just, the consumerization of technology is just going in parallel at a very fast pace. Mobile phones came up. Lot of people think mobile phone came, all right, great, but what they forget is... Remember the Sony Walkmans?

[Alec] Yeah, absolutely.

[Sudhir] They went away. Guess what happened to them? They came up in a very small hard disk because the hard disk started condensing in form factor and then all it had is a circle around it and they called it an iPad, iPod, right?

[Alec] Mm[Sudhir]hmm.

[Sudhir] That's what happened to Sony Walkman if you remember.

[Alec] Very well.

[Sudhir] And then, pretty soon What happened to that iPod is they put camera on it, right?

[Alec] It's right here, I have it.

[Sudhir] And they put phone on it. Now you got all of these condensed in one and then they replace the, remember the Nu[Sudhir]Vois, GPS?

[Alec] Hundred percent.

[Sudhir] Those are gone. What happened to that? It's on your phone, right? So that was happening. That's what is happening to the consumer on their day to day lives. Things have been changing. Things are, consolidated and all of that is happening, the form factor of what you have in your pocket, in your hands et cetera also is very condensed and so on and so forth. So, all that is happening while mortgage is also happening on this side. But the absorption of technology in mortgage has not been as good as it should be. And I think the challenge with that is because why we are very good to solve smaller problems, when I say we, the tech community, smaller problems like putting a Walkman or enabling a phone or things like that, we are not good at solving the complex workflow and processing and steps and checks and measures, et cetera and putting that and enabling that to be much more technology. Why would you do that? Because you gotta help them. The loan officer cannot be going at five different places to find all the information to provide to me to get me to make a decision, right? It should be relatively easy for them and that's the reality. No one sat down to kind of the... What I would say is this, applied technology is the key word, right? You gotta take technology and you gotta apply it. In order for you to apply it successfully, you gotta understand the business. You gotta understand the business process that's been involved, you gotta look at where you can help Alec produce more loans or close more loans because you cannot be working 12 hours a day and only closing like one or two loans or selling one or two cars or whatever it is.

[Alec] Sudhir, what's crazy about this as you talk to great producers, and as you see, their ability isn't limited in how many leads they can get. I know a lot of really talented professionals and their time is consumed by the process. And they have to scale and add expense. They have to hire assistants and coordinators and processors and processor tools and you need more underwriters. And I think the old saying was, "For every great originator you hire, "you have to hire like two to three operations people "to support them." And so when I ask a loan officer, "What's your day consists of?" And if they're talented, and they have large pipelines, it's in pipeline management and paper management. Tracking down crap and sending it in this back and forth style system. And that's always been like the actual, the thing that holds back a guy from doing 10 deals who could do 50. So share with me your thoughts on that and how can how can technology come in and provide solutions there?

[Sudhir] I think the other part that the industry is probably a little bit lagging and it's getting better is around use of data.

[Alec] Yes, absolutely.

[Sudhir] We all keep saying data, why is data important? We know data's very important. "I gotta look at my reports." Okay, that's one thing, but what I said earlier, in order for you to be successfully talking to a consumer to help them get a loan, you have to provide them with information. What is information? It's knowledge combined with data. That's what information is and we don't combine it that way. We look at it as a, what you call a data issue. And then we look at that and then we look at another issue as a business process issue, or we don't connect is, you gotta bring the knowledge component in there. Only then you can make it information that can be used by the loan officer or by the borrower, or by others to make their decision faster and you get the right product, right pricing and so on. Now, underwriting the processing side, I have a lot of empathy for those folks. You know why? Because they get a lot of, there's a lot of work and if they will be more efficient, if you provide them with good, right information at the right time which is data and knowledge in front of them, along with their ability to manage their work, which we call as workflow but that's what it really is. You move it from one step to the next and to the next at a faster pace. So if we could start thinking about it that way, which is what I think the industry should start thinking about it very differently, is how do you take data, how do you take knowledge package it in information provide the right information at the right time and the right steps, that's gonna help that processor, underwriter, closer, operate much faster so they can actually spend time with their family after five or six.

[Alec] And by the way, how needed is that right now? Record pipelines, record originations, and it's like, " Oh, man, it's a lot of work."

[Sudhir] See, that's the other thing, right? This is a example of when your demand increases, which is we have demand, increase in demand. Now, you should be able to scale to that. Now, if you don't have the right set of automation and efficiencies powered by information, you're not going to be scalable. So you are going to spend 12 hours and 16 hours if you don't have the right technology and automation in place to get to do that. I think that's another interesting point to think about. But the industry as a whole is pretty much I would say lagging still. And I think a lot of efforts are underway to, in multiple different areas to say, "Hey, this is a ripe opportunity to disrupt, "it's ripe for disruption." I don't think it's a disruption challenge, it's much more of a transformation challenge. It's more of how do we start providing mortgages smarter and helping the borrower and customer better? How do we improve the customer relationship better? That's really going to be the play and it's all gonna be, I think the next big wave in mortgage is gonna be information power.

[Alec] So, I love these kind of conversations because I like to live in fantasy land. But if you fast forward yourself to whatever point in the future you think that this transformation is completed, and I know tech is always a journey, 'cause you're always improving and you just continue to iterate. But, what could that look like? What could it look like in the future as this stuff lands and changes? What do you see?

[Sudhir] So if you go outside the financial services industry a little bit, just look at technology in general, I think the challenge with technology is to stay current and keep up with what's going on. You can be a step behind, a couple of steps behind, but if you are like 10, 15 steps behind, you have a problem. So you gotta go through a transformation to get to that. Not more than five steps behind, all right? That's the problem. Now if you take that, in the mortgage industry, we are probably about 15, 20 steps behind. We need to get to that five steps, that's step one. I don't think that is just only, that's the industry overall, if you look at it, right?

[Alec] Yeah.

[Sudhir] And then once you get to that five steps, then it actually becomes easier, believe it or not. It's easier if you have the right process and the right operating model intact and business. It is easier to keep up with that five[Sudhir]year catch up than if you translate that into years instead of steps, right? Five[Sudhir]year catch up is better than a 20[Sudhir]year catch up. So I think that's kind of where it becomes easier, but it's really not five years, it's just five steps. Just just keep it current, stay aligned with what's happening in the technology world. This is for all my tech colleagues in the industry, gotta keep up. The other part is you have to wear your applied technology hat on so if something cool comes on, you gotta think about, "All right, this is how I can apply it," and then say, "Eh, Alec, how do you feel "if I can give you ability "to enable this particular technology?" And you will say, "That makes totally no sense." I got my answer, right? Or you would say, "That's interesting. "Lemme think about it." That's what I need, right? So the persuasion begins when you say no to me. And that's really what is also not happening is just that that conversation, the ability to realize and know the challenges that you're going through, be it at scale or be it business as usual, what are the challenges then addressing them applying the right set of technology and tools. I also say this to many of my tech colleagues, "You gotta be careful. "You cannot have hammer looking for a nail."

[Alec] Yes, absolutely.

[Sudhir] Then don't go buy and get technology, get excited about technology, why? Because Amazon is using it or Apple is using it et cetera. See how you can apply it. Sometimes you may have to admit that it's not applicable to this industry or what I do and move on. Otherwise your hammer's gonna still look for the nail and sit in your garage.

[Alec] That's so true, that's so true. So guys, we have a lot of viewers right now and we're about 30 minutes in. If you have questions for Sudhir, please throw them into the comments. We'd love to answer them and I always ask this, if you're watching this in the future, hit me with a hashtag bypassed and let me know that you're engaging even though you're not live with us, you're watching a repost or you're watching something else but please let's join the conversation. It's so much fun to do this live because we get to hear from you guys about what your questions are too and it's not just Sudhir and I sitting in a room talking about mortgage tech which is fun too but different. So, Sudhir, what do you love about what you do?

[Sudhir] I love new challenges, as in when I look at businesses, and when I look at the ability to go and get into heavy demand, large scale, that's a challenge, that we manage the scale. Can we address that? How can we address it? And the how maybe through automation, the how maybe through much more stable systems the how maybe through a whole bunch of different things. Interestingly enough, we are going through such your time right now. With everything that happened to COVID, guess what that did? We didn't have a choice.

[Alec] What was that like trying to lead a tech industry and all the team through this dramatic shift where everybody had to go home? What was that like for you and your team? Like what was the environment like?

[Sudhir] I think it was a big challenge. You know what they say, right? "Necessity is the mother of invention."

[Alec] No kidding.

[Sudhir] That's what happened to us, quite frankly. We saw that unless we get the capability built in to get our folks to work remotely from anywhere, from home, et cetera, we're gonna be having challenges if we can't do that. It's not enough if you just do that, then comes the next step, which is how do we keep our employees safe if they're operating in cyberspace? And when you operate heavily in cyberspace, bad actors come in.

[Alec] Yeah, absolutely.

[Sudhir] You gotta keep them safe and you also have to secure your data and your systems and so on and so forth. So there's the balancing act of that. The other part of it is, this calls for a whole different level of business continuity than what was originally spoken in the past. Many are times I've seen organizations say, "Well, BCP and disaster recovery and business continuity "is a requirement because you gotta have a, "It's a compliance requirement." Yeah, but what happened here is not a compliance requirement. So it's a health issue, it's a safety issue, created a challenge for the entire world if you will and in order for us to operate in that environment, we need a completely different line of thinking. And that's what we did in technology. We started thinking very differently. How do we keep power? How do we enable remote capability, for example for call center?

[Alec] Yeah.

[Sudhir] Right?

[Alec] Absolutely.

[Sudhir] How do you do that? And then we had to think through that. We had to look at what are the different ways by which you can do that? We came up with the solution, which is by far the best in the industry that once you get that, the next step is how do you keep those systems resilient? How do you keep them stable? How do you make sure that they are highly available, and so on and so forth. So we addressed that and we had different levels of thinking and we brought them together. There's been lot of debate amongst ourselves, which is kind of good, I think healthy debates are always good in technology as long as you get a solution at the end of it which we did. So, we had a lot of good debates and we are at a point where we now we are thinking about, "Okay, what if a third party system goes down? "How can we still operate without that?" And so we are enabling that and we have now enabled such a different set of capabilities that is just, we can now operate from anywhere and we can be operating very safely, our systems will have the resilience, if you will, to perform and that's what all of you would like on the business side as well, right?

[Alec] Yeah.

[Sudhir] And I think that's really what happened. So it was truly a wake up call, it expedited the way. For us, I can tell you for my team and I, it was a jolt that was given for us to start thinking how IT should operate differently. You can't wait for three months and four months to get something delivered, why? Because it's a health issue, we're going tomorrow. So you can wait that long. So it changed our model. We started thinking differently, it changed our model, it changed our internal processes to start thinking about delivering things much faster. So there's lot of benefits and we looked at it as an opportunity for us to come out of this leading the way, leading in technology as well. And being a leading business is, good solid business is... You know, one of my former bosses always says this, "Good, solid businesses have a good, solid technology team." And I think we are positioned for that at loanDepot.

[Alec] I wanna echo, which is just so fun, first of all, I love hearing your mindset about how the challenge was exciting, how the challenge was something that you wanted to come out as a leader through and you wanted to push the team through and got you thinking differently and there's such a strong parallel to great salespeople who are having the similar like challenges that this is presenting. I just talked to a guy today from New York who was saying, the normal line which is, "I can't do what I used to do. "I used to be able to go out and see all these realtors, "used to go out and weekends and go to open houses "and go to board events and go to networking events "and do pop[Sudhir]bys at real estate offices where I had friends "and I can't do anything right now that I used to do." But he's starting to go all in on social media. That's how we connected. And because there is this silver lining of, there's opportunity in hardship, there's opportunity in this time right now and the people that are willing to lean into it and have the same mindset that you have, which is I wanna come through a leader, I wanna come through stronger and better are doing that. And it's really cool to see like[Sudhir][Sudhir]

[Sudhir] So I also wanna share something else with you. I also have a little bit of a tenure in promotion sports. That's what coaches teach you, right?

[Alec] Yep.

[Sudhir] It's about how do you stay resilient? How do you stay to make sure that you can either sit down and think about everything that's gonna go wrong or do something about it to make it, how do I set it to go right? And I think that's really what this environment has taught us.

[Alec] You know, William had a comment in there and I think it'd be interesting to hear your take on it, I mean your take on it. "Mortgage company versus fintech company," and fintech has become very buzzy as a word. You know, there's lots of fintech companies and all that fun stuff and then you got mortgage companies which tend to be, I'll just kind of smash our industry, they tend to be, not sexy. Just mortgage tech is like, you know... But fintech sounds cool. You know, and Anthony plays in the fintech space, how do you see the definition of fintech and mortgage tech and mortgage company? Are they a blend? Are they together? Quickens going IPO and they're positioning themselves as a fintech slash mortgage company. What's your take on that as a definition?

[Sudhir] I think that you have a lot of these definitions that have come about well. If you look at the onset of the E[Sudhir]commerce timeline, people say brick and mortars becoming brick and motors and so on and so forth. But there's something about fintech that is very important and interesting at the same time. I think a company that has successfully embraced technology as a business enabler is a fintech company. It's not enough if you just say that "I wanna automate," or "I've gotta bring efficiencies," and so on and so forth. It's important for even us in technology to go and look at what our business is. A lot of times there is a divide between, I've even written an article about it between the technology teams and business and I think you should close off that divide. You should actually go visit your business, sit with them, see how they're using your technology 'cause that's gonna give you a proactive way of saying, "You know, Alec, you're clicking here, you're clicking... "What the heck? "why are you clicking in all these places? "You shall unclick." So, instead of waiting for that, for you to come tell me and then pick up a ticket, stand in line. It should be better if I can come and do that once in a while. I think that's very important. You've gotta be plugged in. enabler, you become a business enabler when tech is used effectively, provides the right set of information at the right time so you can be successful as a loan officer, for example. The other part of it is investment. Investment in technologies is important. It's important but tech folks are pretty expensive, I can tell you that. Technology tools are expensive. Tech is not cheap. So technology tools are expensive as well. So, the investment part of it is very, very important. I think when those two come together, the realization by technology that we've had the right investments and we have the ability to understand our business well enough to apply and help them do better to be able to scale, not just business as usual, but should be able to scale and grow, right? It's run, scale and grow in that fashion if you think about it. I'll be able to successfully run the business, I can now scale the business as demand grows, organically or inorganically grow the business as well, I think that's very key. If you have those things powered by tech, right?

[Alec] Yep.

[Sudhir] That's really what fintech means.

[Alec] Well, I've seen some competitors... I do a lot of my work recruiting and meeting other companies, meeting other professionals and I got introduced to their technology platform and I'm like, "There's five people here." And their IT team's five people and the reason it's five people it's 'cause all their technology is being vendored to somebody else who has the tech team. And so their mortgage IT department is five people whose job is to interface between the vendors, their tech width and their loan officers and I think that your point on what differentiates a mortgage company versus a fintech company, I think the definition's right. They're either are all in on the fintech side, and they got the team and they're building it out, or they're vendoring it out and they're trying to manage it that way.

[Sudhir] How we take our data, package it into information, what we develop with it, a lot of the algorithms that we write, not the tools that we use, it's the algorithms that we write becomes the secret sauce for us. And that's your competitive edge, right? If you have the idea of having them in tech[Sudhir]enabled form is the fact that you can scale and grow, right? So that's really, if you look at it, at the end of the day, that's what makes you a fintech company. It's the ability to be a business enabler, technology enabling, empowering the business is what a fintech company is all about.

[Alec] So I wanna end on that in a minute. But Andy has an interesting question here that I think a lot of people have, and it gets super granular a little bit but that's okay. "What are some of the key business processes "you are currently focusing on transforming "via automation or other solutions?"

[Sudhir] I think we are looking at the next generation of how we manage and handle our customers. The customer journey is gonna be very, very transformed, very differently and we are looking at that. Again, loanDepot is a 10[Sudhir]year[Sudhir]old company, so there's not a whole lot of green screen and blue screen and white and the legacy platforms out there. So we have edge over some of the others. And so what we are doing is working on the next generation of things that even some of the tech companies are not part of. So that's kind of where we're working on to make the consumer journey and experience much better than what it is today. We are already on the forefront of it, but it's gonna become much more, much better.

[Alec] Yeah, I always described it as nurse and doctor functions where the nurse comes in and they take your vitals they take your blood pressure, they take your temperature, and they gather your paperwork and put it on a chart for the doctor. And today, a lot of that nurse function in mortgage is the collecting of documents, the validation of documents, the reviewing the documents, getting it from a to b and let somebody else over there review it and then all of a sudden, all that information gets presented to the loan officer and they can have a real conversation. They could be the doctor that comes in and says, "What's the best option for you?" So your point earlier, Sudhir, like the emotional connection. They can come in and walk somebody through this big decision, help them make a decision, be that consultative professional. And I think one of the fun parts of watching what you're doing in technology is just having those nurse functions start to be picked up by technology, and supported by technology. And so all of a sudden now we're getting quicker to an actual decision point, we're getting quicker to serving the customer the way they wanna be served. I mean, I always joke that it's hysterical that I can order a pizza and see my pizza tracker being made and know when the pizza's gonna be here, and yet in mortgage in general, talking about the industry, there's this huge linear process that there's not much transparency into, it's hard to see like, where's my file? Well, it's in a turn time, and it's over there somewhere in the cloud. It's like, "Well, hold on." And so I know that your team's been working hard building into that and streaming an app.

[Sudhir] Specifically, Andy's question about what key business processes, it's very difficult for you to say, "What is the key business process?" Because the whole buying process itself is very key and important. So, if you divide it between the front end and then fulfillment side of it the initial focus that we have is going to be really around between the time you apply a loan and all the way to you getting the loan. And that's an area we are trying to implement some new tech opportunities to implement some new technologies and tools internally for us.

[Alec] Well, that's where the mess is. That's where the mess is 'cause no person comes in with the same profile.

[Sudhir] Yeah, and that's why you have to use some new approaches of curation of that data as it traverses, as the customer journey progresses. So, for the tech folks, we've got an incredible opportunity with machine learning. Why? Because data's already there, you applying machine learning algorithms to that data, you can start powering it up and getting that going and providing that information to the processors, the underwriters, closers that'll help them significantly. So, that's an opportunity that I see. The other part of it is everybody forgets the servicing side of the house.

[Alec] Yeah, I know. We're sales people, we don't wanna talk about servicing.

[Sudhir] But that's a customer[Sudhir]for[Sudhir]life opportunity because what happens is while you're servicing a loan and in the market, the rates go down and things that's a refinance opportunity, guess what happens? It's an opportunity for you to come back and refinance. Now, you don't wanna lose that customer, let's say. How do I keep that customer as customer for life? They will call you, Alec, if they have the ability because they'll say, "Alec, rates went down. "Why don't you give me a call? "Why don't we talk about a refi, right?"

[Alec] Yep.

[Sudhir] I think that's important. So that's why the business process, we gotta look at it in it's complete sense from the front[Sudhir]end origination to the operations side as well as even the back end. That's the opportunity for us to look at this very differently and try and get back to under the five steps, if you will. That's really where we have to go and I think loanDepot's there. We're very excited, we will be there.

[Alec] This is a great close question by William, which says, well, actually, hold on, we got another one that I think is gonna be fun here. Yeah, I like this question. I'm curious for your answer, Sudhir. So Ganesh says, "What is the industry benchmark or standard dates "for closing a loan "and how do we see it five years from now?"

[Sudhir] I think the industry benchmark or the industry data for average day to close loan is 45 days. Now here's the problem, that's not the median, that's the average.

[Alec] Yeah, see people don't like... Yeah, thank you for clarifying. 'Cause even me, I was like, "Well, then, let's talk about that in person."

[Sudhir] But, that's how they gave the rating, right? They give you an average but the problem is that's not the median. So, that's the issue. But if you really think about it, that is also pretty long pole. Even the average, that number is pretty big. So, five years from now, if you asked me five years before now, it was, guess what? 50 days average. They took us five years to cut five days down, right?

[Alec] Yep.

[Sudhir] So not a good benchmark, if you will. I think what needs to happen is there has to be a leader that goes in, leads this and brings about a change, the others will follow, the competitors will follow 'cause there will not be a choice. I think that's what we will be.

[Alec] So William has this as a closing question, Sudhir, and I love it because I think it'd be a good way to wrap it up here. He says, "As you close on your first year with loanDepot, "what are some of your standout observations you've had "up to this point?" I think that's a cool way to end our conversation.

[Sudhir] Absolutely great company to work for. Outstanding culture. It's a very team[Sudhir]oriented culture. There're a lot of good people in the company that have been here since founding and every single one of them have been extremely good to work with. I don't have organizational charts and things like that so I go talk to everybody and I think it's just been a, there's a culture of can[Sudhir]do attitude, there's a culture of confidence and also there's a culture of appreciation, if you will, which is very important. There's one thing that I absolutely noticed that, and I wanna make sure that that culture is there in technology as well as, but I didn't have to do anything because it was already there, inclusiveness. And I think inclusiveness is a very, very important right. And we are in the forefront of technology so what else there is? But it's a great company. We have very good leadership. Anthony is a absolute visionary, and he definitely is and he is changing the, he's transforming the industry as well in the process. So that's what I would say. My observation is, great company, not as challenging to transform as in my previous experiences and roles, because when you have a good company with good culture and good attitude, good team, it's actually easier to transform than otherwise.

[Alec] Well, Sudhir, today thank you for joining today. Really, really just excited you're on the team, love working with you, love our collaborations we've already had together. I mean, you're speaking the truth, you're definitely accessible reaching out, trying to figure out how the world works and what the business side needs. I loved your example earlier of sitting in the office in Santa Monica with a bunch of loan people like watching them push buttons, love our collaboration with your tech team and everybody else. So guys, we're gonna wrap down, if you have any more comments and questions, we will get to you, I will answer these to you, please continue to engage on the social and again, if you like this podcast, we put out on next week, so subscribe on Apple, and I'd love to see you there. Sudhir, have a wonderful day my friend.

[Sudhir] Thank you so much, glad to be here and looking forward to a future podcast as well.

[Alec] Absolutely, we'll bring you back. Take care everybody. We are out for the day.

[Sudhir] Take care.

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