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Mortgage Fintech CEO says Brokers are Still Relevant to Lending Process

November 12, 2021
Article by:
jason harris
Jason Harris, CEO, Button Finance

At Money 20/20 last month, deBanked spoke with Jason Harris, CEO of Button Finance, about his company’s initiative to give access to home equity loans to borrowers that would have never been able to do so. Through this conversation, Harris also shared his thoughts on how brokers across the finance world are still relevant, and the ones who are embracing tech are the ones who are closing deals. 

Button Finance is a fintech company that brings together venture and hedge fund capital with borrowers seeking lines of home equity credit. After moving into second-lien mortgages, Button Finance is looking to open up a practice which according to Harris, is mostly an exclusive borrowing process for high net worth clients who borrow from large institutions.  

“The reason we like this product is because if you’re an individual, you have to go somewhere like LendingClub or to your credit card to borrow money. And those are interest rates at 20%, as high as 30%, even if you have great credit, it can be over 10%. So we want to give people a much lower cost for access to credit.”

“WE WANT TO MAKE IT SO YOU CAN BORROW MONEY SITTING ON THE TOILET ON YOUR PHONE”

Harris also has a desire to make the process as quick and efficient as technology allows. He is embracing not only expanding the access to capital, but making the process to obtain it simple.

“We want to make it so you can borrow money sitting on the toilet on your phone,” Harris said.

When speaking about brokers in his industry, Harris touched on how the ones who are innovating are taking advantage of such a unique time, where the amount individuals innovating are relatively low, and the opportunities given by the innovation have never been higher.

While some companies offer a completely broker-less buying process, Harris thinks the role of a broker is necessary for a borrower of any loan to be comfortable and informed during the borrowing process.

“Now with regards to the need for brokers, this is something that now happens very often,” said Harris. “When people make large purchases, they like the comfort of speaking to someone and having someone advise them. Sometimes a broker can offer you some educational knowledge. We’re in the finance world; if you’re not a finance person at all, before you borrow $500,000, you might want someone advising you along the way.”

“Different brokers have different ways of brokering,” said Harris. “Some brokers spend money and build out great technology platforms themselves, and they’re able to scale and do ten times as many mortgages as a broker who is doing high touch [business]. Other brokers will use relationship based lending and have high touch [business]. I think it’s definitely going more towards the technology route.”

While embracing the value tech has, Harris realizes that with all this technology comes a responsibility to educate borrowers on all the different processes that are changing when it comes to data transfer, verification, and approval processes. “Like every other tech company, we want to try to bring technology to this as much as possible. We want to be able to advise a borrower on the best possible product just using technology.”

While speaking specifically about the innovation the financial world is experiencing, Harris thinks that a drastic change to the finance world will be take place over a long period of time.

“Like everything, things move slowly,” said Harris.  “Don’t think this will happen overnight.”

Mississippi Fintech is Innovating Small Business Lending with Brokers in Mind

November 3, 2021
Article by:
Bradley Tompkins
Bradley Tompkins, CIO, Vergent

Vergent, a loan management software, is creating a space where brokers and lenders alike can manage all aspects of a deal in one place. Based in Ridgefield, Mississippi, Vergent is trying to innovate the industry with brokers in mind, pairing the small town values of interpersonal engagement and getting to know your customer with the big city ideas of fintech and automation. 

“Really what we provide is the technology infrastructure for lenders to reach their end user,” said Bradley Tompkins, Chief Information Officer at Vergent. “Whether that be a small business looking for a loan, we facilitate that acquisition, the origination of that loan, and the servicing of that loan. That could mean recurring payment setups, based upon the lender’s requirements, communication with that customer via email, text, however that is facilitated, and all the different payment options.”

Tompkins talked about how his software is one of the few that brokers in his area are already utilizing to start making deals smoother. With access to all aspects of the deal, Vergent provides an all-in-one suite of options that can turn the process of analyzing a deal or checking out a deal post-funding into a couple of clicks.

“We actually have brokers who use our software to accept applications, originate loans, and then we can either transfer that to a separate portfolio that the lender then manages for servicing, or sometimes we have brokers that service the loans themselves,” Tompkins said. “So there are really a lot of options on how to set that up in the platform, so the lender can have a separate site where they accept applications from multiple brokers, or really any combination of those things.”

The value of a direct relationship with the customer is top-tier according to Tompkins, as he spoke about the next great innovations in fintech not being how to weed the human interaction out, but finding its role that will find the balance between human touch and AI power. “Once you know your customer, you can give them the option to pay you back in the easiest way possible. Understanding how they get paid, their pay cycles, when they have money and being flexible to accept that money when they have it, and giving them those repayment options is the next great innovation.”

When talking about the ability to market his product to a wide audience, Tompkins acknowledged the difficulty due to the size of the industry itself, but touched on the value of networking events like Money 20/20, where Tompkins was pitching Vergent to an international audience.

“We’ve been pleasantly surprised by the amount of lenders we’ve seen, and the amount of opportunities that have come our way from [Money 20/20]. We came here pretty open minded, maybe talk to some payment processors and other vendors that may be able to integrate to us and kind of help expand our network, but really it’s just getting our name out, seeing a little bit of a different segment than what we normally see, and looking at other market opportunities.”

Brokers Say “Yes” to Commissions in Crypto

September 12, 2021
Article by:

Jay AvigdorOne month after Velocity Capital Group began offering broker commissions in crypto, CEO Jay Avigdor says it is taking off. It’s completely optional of course, but already seven of VCG’s ISOs have opted to get paid that way.

“The feedback has been fantastic!” Avigdor says.

In a previous interview with deBanked, Avigdor said that the initiative wasn’t about speculating on cryptocurrencies but instead about taking advantage of the transaction speed. Crypto can change hands faster than an ACH or a wire, for example, and VCG will send funds via a stablecoin so that there is no volatile exchange rate risk.

“Our goal since day 1 of VCG, was to give ISOs and merchants the ability to access capital as fast as possible,” Avigdor said. “With VCG’s proprietary technology, we have been able to change that mindset from ‘as fast as possible’ to ‘the FASTEST possible.’”

One broker attested on facebook that he received his commission from VCG within 5 minutes from the moment the deal funded via the DAI stablecoin.

Even a merchant requested that they be funded with crypto, according to Avigdor, which they accommodated. Payments back to VCG are still done via ACH debit, however.

The market cap of the cryptocurrency industry is currently at more than $2 trillion.

Mortgage Brokers: pick a side

March 5, 2021
Article by:

boxing matchUnited Wholesale Mortgage (UWM) and Rocket Mortgage are still going at it, this week heating up to a new boiling point.

UWM announced on Facebook Live Thursday that it would not partner with brokers who work with Rocket Mortgage or Fairway Independent Mortgage Corp. CEO Mat Ishbia gave brokers until March 15th to sign a loyalty document to pledge their allegiance to the UWM team.

“If you work with them, can’t work with UWM anymore, effective immediately,” Ishbia said. “I can’t stop you, but I’m not going to help you, help the people that are hurting the broker channel, and that’s what’s going on right now.”

After competing Superbowl ads, it looked like the competitors were peacefully building broker networks, but now brokers have to pick a side. Rocket Pro TPO VP Austin Niemiec told the Housing Wire that UWM is attempting to manipulate the broker market.

“What UWM is attempting to do is really manipulate the market and have brokers swear allegiance to one company and literally give them financial penalties if they don’t listen to them,” Niemic said. “That harms their ability to compete, and it harms the consumer. Make no mistake about it, this was a move to benefit one company and one company alone, UWM.”

The feud comes after the stock price of Rocket Companies, Rocket Mortgage’s parent company, spiked in price. Founder Dan Gilbert briefly placed number 16 in Bloomberg’s Billionaire Index.

Super Bowl Sunday: Battle of the Mortgage Brokers

February 2, 2021
Article by:

Super Bowl Lending CompetitionThis Sunday in Tampa Bay, the Chiefs, and the Buccaneers will duke it out, while a second mortgage-based rivalry plays out in the ads between plays.

A year ago, millions watched as Rocket Mortgage and United Wholesale Mortage (UWM) went head-to-head with competing multi-million-dollar ads. This year, they will both return, but it looks like they might play nice after a grueling pandemic.

Last year, Rocket appeared for their third consecutive Super Bowl, but then in an upset came the #BrokersAreBetter ad campaign. UMW called out their biggest competitor: “Playing with rockets is great when you’re a kid, but when it’s time to get a mortgage, you quickly realize a rocket is complicated and expensive,” and promoted FindAMortgageBroker.com.

It was a jab that earned millions of tweets, but this year Rocket has a chance to reply, and “double down” with two ads, this time highlighting local brokers as well. Rocket Companies today launched a national mortgage broker directory on its website.

“The directory not only includes the 43,000 individual loan officers who work with us but every mortgage broker in the country,” said Austin Niemiec, the executive vice president of Rocket Pro TP, in a statement. “This new resource is not about us; it’s about giving consumers more choice and assuring they know how an independent loan officer in their community can help them.”

UWM is also running an ad showing an imaginary tinder-swiping house hunting app, again featuring the FindAMortgageBroker.com directory.

“We believe we’re the one genuine partner of mortgage brokers nationwide,” said Sarah DeCiantis, chief marketing officer of UWM, in a statement. “We thought this ad would not only be relatable and entertaining given the pandemic’s acceleration of online dating but also educate consumers that brokers are their number one resource for finding a mortgage that fits their financial situation.”

Both firms are deciding to buy ads while other major brands are pulling out; For example, Budweiser’s decision to put ad money toward covid vaccine distribution. These brands will be saving money, as a 30-second spot during the Super Bowl runs for an estimated $5.5 million, the AP reports.

Next year’s Super Bowl 56, will be played in SoFi Stadium.

Sketchy Virginia SBA Loan Brokers Indicted

August 26, 2020
Article by:

Ronald A. Smith and Terri Beth Miller, owners of Virginia-based Business Development Group (BDG), an SBA loan brokerage, were indicted this month over an advance-fee scheme in which many customers are alleged to have paid money to obtain SBA loans but did not in fact get them.

As part of the scheme, defendants are alleged to have made many false and misleading representations to prospective borrowers including that:

  • BDG was a large, multi-state company
  • BDG was headquartered at the Trump Building in New York City and had an additional business in Las Vegas
  • BDG has assisted certain named companies in obtaining SBA loans
  • BDG was a business established in 2005 or earlier
  • BDG was affiliated with the SBA
  • BDG had relationships with banks across the nation that allowed it to facilitate the loan approval process with SBA lenders in a customer’s area by utilizing a “Lender Linker” made up of the most preferred SBA lenders in the country
  • BDG had a program that included a “Powerful Online Grant Writer Interface Service” that was directly connected to the federal government and “handled everything from A to Z in Finding, Writing, Submitting and Securing Grants”
  • BDG offered a money back guarantee
  • BDG won the 2016 Best of Manhattan Business Award for Business Development Software and Services

BDG was really just an internet-based business whose goal was to obtain money through fraudulent pretenses and promises, prosecutors contend.

A copy of the grand jury indictment can be obtained here.

Most Brokers Plan to Minimize Use of a Central Office Post-COVID, Survey Suggests

May 26, 2020
Article by:

altfi impactA survey conducted by Overland Park, KS-based Strategic Capital revealed that only 36.8% of respondents plan to completely return to the office full-time after cities fully open back up. The vast majority of respondents were small business finance brokers.

44.7% selected that they would minimize office space or only use office space to house core team members while 18.4% planned to terminate their office lease altogether and adopt a work from home model permanently.

The full survey results can be found here.

The Story Behind The #BrokersAreBetter Super Bowl Commercial

February 7, 2020
Article by:

Show Us Your DealsWatching the Super Bowl, you may have seen a number of oddities: the resurrection of a peanut as an infant, the tattooed inside of a popular rapper’s head, Google’s plea to be the hub for all your elderly relatives’ memories, and, on top of it all, a cheeky spar between mortgage lenders.

Quicken Loans, the Detroit-based mortgage provider, had an ad that featured Hawaiian actor Jason Momoa reveal his ‘true’ self, all while explaining the values of Quicken’s Rocket Mortgage product. Par for the course with Super Bowl ads, until United Wholesale Mortgage’s advert aired. Throwing shade at it its competitor with the line: “Playing with rockets is great when you’re a kid, but when it’s time to get a mortgage, you quickly realize a rocket is complicated and expensive,” United promoted its FindAMortgageBroker.com website, which points potential customers towards a host of brokers local to themselves, before closing its ad with the #brokersarebetter hashtag.

Speaking to The Detroit News about the joke, United CEO Mat Ishbia said: “I don’t think we attacked (Rocket Mortgage); we had fun with it … I think it’s going to grow their business just like it’s going to grow ours. I think (Quicken founder) Dan Gilbert and (CEO) Jay Farmer are going to laugh when they see it. They won’t like it enough to chip in with the cost. The reality is we’re friendly competitors.”

Being a wholesale lender, United gains customers exclusively from its brokers, where as Quicken engages with both brokers and its own marketing efforts. In a call with deBanked, United’s Chief Marketing Officer, Sarah DeCiantis, explained that this was one of the main motivators behind the ad. Noting that for local, independent brokers it can be a struggle to compete with behemoth retail lenders, DeCiantis said that the ad was an answer to the question of ‘How do we allow them to get out there?’ “Retail are amazing at marketing and customer retention, so we try to do what we can to put [independent brokers] on the same playing field because they don’t have the same budget.”

And with only 30 seconds to express this, the challenge was on — not to mention how such ads are estimated to cost $5.6 million. “So much thought goes into every frame, every second,” remarked DeCiantis, who said she was proud of the final product. “We’ve gotten over 75,000 searches on the website just in the first few days after the ad.”

The high profile decision to purchase Super Bowl air time comes during what looks like will be a big year for United, with it planning to add an additional 3,000 employees to its already 5,000-strong staff in its Pontiac headquarters. Despite this, according to Ishbia the focus is still on the local: “If a consumer goes through an independent mortgage broker it will be faster, easier and more affordable than going through a retail lender or mega bank.” From his point of view, it just makes more sense to go independent, it isn’t rocket science.

Threads on deBanked


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