The Mortgage Note Podcast

The president of a wholesale provider of business purpose capital for mortgage brokers and their real estate investor clients says technology and talent will drive success for his company.

Ben Fertig at Constructive Capital in Oakbrook Terrace, Illinois, said in a recent interview with The Mortgage Note that the company grew 30% in each of the last two years on average.

Constructive Capital provides capital to a third-party origination network, mainly made up of mortgage brokers who work with real estate investors that use residential transition loans - also known as fix and flip loans - and DSCR related products.

When it comes to technology, modern risk management tools using artificial intelligence help to prevent fraud.

“If anything is off in terms of fonts or anything along those lines, it'll detect it. If any of the calculations are off, it'll detect it. It actually will track back the cookies on anything that's been changed relative to a PDF, or anything along those lines. So, I think that's definitely been a big development,” Fertig said.

Programs that pull in all the pictures historically from a property relative to its MLS listings are particularly helpful in their space, Fertig said. They also use a tool that aggregates data to create predictive analytics on whether or not a project is likely to get completed on schedule.

Another area where technology plays a key role is in project inspections as the market moves towards some virtual inspections.

“There's actually tools that can tell, just from a visual, if a project has got, for instance, click wood flooring versus real hardwood flooring. It’s pretty good stuff,” Fertig said.

Fertig has been talking about how home mortgage professionals should diversify their business for some time, saying there are opportunities for brokers to expand into residential transition loans and DSCR related products.

He said the reasons are multifaceted, but the first advantage of diversification is a different set of borrowers who are less rate sensitive than homebuyers.

“Secondly, the acquisition of the borrower is just more efficient because that borrower should be a recurring borrower. Most real estate investors do more than one loan or project,” Fertig said.

Most of Constructive Capital’s broker base is made up of industry professionals who generally service residential real estate investors exclusively. Fertig is hoping to develop a relationship with brokers who have historically focused on consumer products, conventional loans, and government loans.

The company has just under 1,300 approved brokers and about 500 of them are active, meaning they have sent the company a loan in the last six months.

Constructive Capital, which operates in 47 states, was named private lender of the year for 2024 at The National Private Lenders Conference.

#lending #realestateinvestment #mortgagenews

Serving a niche market on scale is the secret to success at Lake Homes Realty and Beach Homes Realty.

Lake Homes Realty is a tech-enabled, full-service real estate brokerage operating in 39 states. Beach Homes Realty has brokerages in 14 states. And the company’s newest addition, Mountain Homes Realty, covers 21 states and featured more than $100 billion in available mountain properties when it was announced in June.

“By using and aggregating data from across the country and limiting it to specific types of property, it makes a totally different experience trying to find a lake home if you’re looking in multiple states,” CEO Glenn Phillips said of the experience they offer buyers.

Sellers like using the company’s websites because they get a greater range of exposure, Phillips told Editor Kimberley Haas during an interview.

“If I’m selling a home at a lake in Tennessee, most agents would struggle to advertise that to buyers coming from California,” Phillips said.

Phillips said that experienced local agents are available to help buyers and sellers with their listings. These people are well-versed in the discretionary housing market.

They also understand the nuances that go into buying or selling a home in their particular market. For example, they can navigate permitting requirements for a dock or pier and have a sense of how busy the boat traffic is near different waterfront properties.

They can also answer all the questions buyers might have, as well as the things they will need to take into consideration.

“Are there access questions? Is this a public beach? Is it a private beach? Is it part of a condo association? Is it a club? If you’re buying just off the beach, which can be a better price point, how can I get to the beach? Or are your pets allowed on the beach?” Phillips said.

Phillips said there is no price point associated with the properties they help people buy and sell. Their websites feature vacant lots all the way up to multi-million dollar properties.

The market for these types of properties has changed in the last five years. Phillips said that during Covid, they had between seven and eight million people using their website. That drained inventory and increased prices.

Now, inventory is back as sellers come to grips with the fact that buyers are holding off on discretionary purchases and are not willing to overpay for these types of properties. Phillips said they are advising listing agents to price things appropriately so qualified buyers will move quickly and offer the asking price or better.

Phillips said that with all three websites, the company currently has about 350,000 properties listed for sale.

#waterfrontproperties #lakehomes #mortgagenews

Blending artificial intelligence with the power of human connection is the topic of a new book by trainer and coach Ron Vaimberg.

Vaimberg specializes in rapid and long-term origination growth, and “The Purchase Shift: Winning Agent Relationships with Authentic Connection & AI” was written for mortgage professionals to provide a clear path for maximizing reach while using the latest technology.

He recently sat down with The Mortgage Note to talk about the latest trends and offer advice for loan originators.

Vaimberg said the average originator is not using AI as much as they can to make their lives easier and more productive. There are programs that can connect to social media feeds, read other people’s posts, and create a dialogue, for example.

When it comes to making sure that interaction is authentic, Vaimberg advises originators to be careful because these tools are not something professionals can set and forget.

"I've been tiptoeing very cautiously into anything like this because I have found that AI across the board still can't speak like me. I've tried training it to speak like me," he said.

"I've made some progress.  But it's becoming easier and easier to detect what's been written by AI. So that's where the authentic communication comes in."

Vaimberg said customization is key, and an area where most originators can improve. He said the majority of AI users don’t take the time for customization because it requires additional effort. That’s a mistake.

"The less effort someone demonstrates that they're making to communicate, the less credibility they're going to have, and the more noise is going to be around. I'm seeing this noise grow exponentially," Vaimberg said.

Vaimberg said he never sacrifices quality for quantity and advises others to do the same if they want to stand out in today's market.

"I feel that the more we trust AI, the less we're going to be able to differentiate ourselves. And the less we can differentiate ourselves, the less of a competitive advantage we're going to have in an industry that is highly emotional," Vaimberg said. 

When it comes to ways AI can make an originator’s life easier behind the scenes, Vaimberg said using summaries from Zoom and other services is helpful.

"I encourage every loan officer or everybody, whenever you have a chance, if you're in a meeting, use a note taker and/or summary," he said.

Newer phones are also offering the ability to record and transcribe calls and that can be beneficial as well.

According to his website, Vaimberg has played a role in transforming the careers of over 200,000 originators throughout the United States, Canada, and Australia with his in-person and virtual success programs Purchase Mastery, Elite Originator, and the enhanced LOMastery.com platform.

#artificialintelligence #loanofficersuccess #mortgagenews

As retirees decide how to ensure their financial well-being for the long term, reverse mortgages are getting a second look from homeowners in their 60s and 70s.

With a reverse mortgage, people can convert their home’s equity into income while continuing to live there. That extra money can be used for renovations, to combat inflation, pay for health care, and maintain a good quality of life, according to Patrick Halonen.

Halonen was recently named head of credit policy, underwriting, and quality control at Longbridge Financial in Paramus, New Jersey. Longbridge, founded in 2012, is a national reverse mortgage lender that specializes in working with seniors.

Halonen recently sat down with The Mortgage Note’s Scott Kimbler to talk about stepping into his new role at the company.

Halonen has 25 years of expertise in the financial services industry. He worked at TD Bank, where he helped influence lending operations as the senior vice president and head of underwriting for retail mortgage, home equity, personal loans, and credit lines.

Previous roles at Citibank and US Bank equipped Halonen with leadership expertise, as he managed high-performing teams across various mortgage operations, including processing and closing.  

Halonen said a recent conversation with his uncle drove home the importance of financial options for seniors as they age.

“He had come to visit, and we were talking about retirement, just in general, he’s entered retirement. He’s in the early stages, and I’m still in my working years, and we were talking about how in your working years, you attempt to accumulate wealth and accumulate assets,” Halonen said.

“And then as you enter into retirement, it kind of flips on its head. You’re starting to then leverage the assets that you’ve accumulated over your lifetime, your retirement savings, the equity in your property, and other ways that you may have saved money or accumulated wealth to then pay for your retirement.”

He went on to explain the difference between a home equity loan and a reverse mortgage.

“I think home repairs are a good conversation around home equity versus reverse mortgage,” Halonen said. “If you’re okay with having a monthly payment, it could be a substantial monthly payment that you’re going to have to pay back on a regular basis, then a home equity loan might be a good option for you. But in many circumstances, I’d say the majority of circumstances, being able to tap the equity in your home without having to make a payment against that loan is going to be beneficial.”

Halonen said that since starting at Longbridge in March, he’s learned new ways the financial industry can help people through all of the stages of their lives, and he is excited to go to work every day to help them.

“I really do appreciate a person’s home being at the center of their life. I’ve had so many experiences where I’ve been able to help a person become a homeowner who didn’t think they could potentially become one. Now, I help a person stay in their home who felt like there was no option, that they were going to have to live a much different lifestyle than what they’ve been accustomed to throughout the majority of their life,” he said.    

In May, Longbridge introduced a new proprietary reverse mortgage feature that preserves equity for heirs.

Leaders at the National Reverse Mortgage Lenders Association in Washington, DC, estimate that home equity for people 62 and older is about $13.9 trillion.

#reversemortgage #lending #mortgagenews

The founder of Clarifire in St. Petersburg, Florida, says automation continues to modernize the mortgage servicing industry.

Jane Mason is the founder and CEO of the privately held, women-owned corporation that uses a Software-as-a-Service model to reduce manual processes and increase efficiencies.

In January, leaders at Clarifire announced that Towne Mortgage Company, a full-service mortgage lender and servicer based in Troy, Michigan, started using their workflow application.

Towne Mortgage Company services loans in 47 states.

Mason recently sat down with The Mortgage Note’s Scott Kimbler to talk about Clarifire and her vision for the company.

Mason was running a large law firm when she came up with the idea of using automation to help clients.

“I was thinking, and my epiphany was ‘a process is a process’. It doesn’t matter if it’s a legal process, a litigation process, a servicing process, right? Our larger customers at the law firm were large banks and servicers. What we tried to do with them is provide them automated access to legal services that they needed,” Mason said.

Mason began thinking about ways to better serve the financial services industry with workflow automation.

“When I got my first opportunity to start my own company and create Clarifire, I created an agnostic, innovative product that could handle any process.”

Clarifire went live in 2007 with Bank of America as its first official client. Truist Financial has been a client since 2009, Mason said.

“We’re a small company with under 100 employees and our clients are under 10, but some of them are extremely large and provide us with ongoing volumes of business,” she explained.

Mason said companies can convert to Clarifire software in a relatively short period of time. If they can provide data from their legacy systems, it usually takes 60 to 90 days.

Mason highlighted how technology can help servicers who have borrowers impacted by natural disasters.

Old school legacy systems are hard-coded, and users in call centers have to go through multiple steps to get borrowers the information they need in times of crisis, Mason said.

With Clarifire, users can ask questions and click on buttons to prompt the next question or response. If the borrower is impacted by the disaster, an automated form for forbearance relief can be issued.

“I think that is an example of how the automation works, and it’s smart. If you ask one question or they click one radio button, the technology is smart enough to go down a different path based on that click,” Mason said.

When asked what drives her daily, Mason said it is making a difference in the lives of clients and their customers.

“I believe in our team, and I believe in building good, long-lasting relationships, and I’m making a difference. It might be small in some people’s eyes, but I’m making a difference. And our customers can depend on us and know that we are here, we have integrity, and we are going to deliver and do what we say we’re going to do,” Mason said.

Looking ahead, Mason said they are continuing to invest in the product.

“It’s a continual evolution of modernization and implementation of different aspects of the latest technologies,” she said. “We’re trying to lead the industry into the future, and we’re going to continue to stay here because we enjoy what we do and we have passion about the successes that we’re getting.”

#automation #mortgageservicing #mortgagenews 

With the rising costs of homeowners insurance making headlines, servicers can step in and help people understand their coverage needs, according to the president of Cornerstone Servicing.

Toby Wells recently sat down with The Mortgage Note’s editor, Kimberley Haas, to discuss the topic. He said that wildfires in the West, hurricanes in the South, and hailstorms in the Midwest are causing more losses than in the past.

But it’s not just a high-risk area issue. Wells said homeowners’ insurance costs are going up throughout the country, with a few notable exceptions where prices have leveled off.

He said the best thing that a servicer can do is educate customers so they have an awareness of insurance, the risks that exist, and actions they can take.

#homeinsurance #mortgageservicing #mortgagenews

The CEO of BSI Financial Services in Irving, Texas, says the key to success in business is to treat every day as a fresh start.

BSI Financial Services is working to lead the evolution of mortgage servicing for originators, investors, and homeowners using a mortgage fintech platform. And CEO Gagan Sharma said there isn’t a dull moment.

“Sometimes that brings stress and challenge, but I think I enjoy the challenge, the intellectual challenge, the people challenge. Frankly, challenging myself to see, ‘Okay, what can I learn from yesterday? What did we do? What could we have done better?’ Individually, collectively, as a group, as a firm, as an industry, and apply that,” Sharma said.

Sharma described the mentality as one similar to a professional athlete.

“I approach business almost with that approach that, ‘Hey, I’m an athlete. Maybe I played well yesterday, maybe I didn’t. But either way, what am I going to do today?’ Even if I won the game yesterday, it doesn’t matter because tomorrow is a new game. That is the approach, that’s what gets me going,” Sharma said.

Sharma recently sat down with The Mortgage Note’s Scott Kimbler to talk about BSI Financial Services and his vision for the company. He started by talking about how he came to be involved with the company.

“BSI was a company and a business plan that I was working on when I was doing my MBA at Wharton. This was my second entrepreneurial venture. I founded my first company in the late 90s. Built it, sold it. I actually founded that company in my first year of business school. I dropped out of school to build and run that business, and then I sold it. Then I went back to business school to finish my MBA,” Sharma said.

“In my first company, half my business was working with mortgage companies. So, when I was looking to get back on the entrepreneurial path, mortgage was the industry that I felt was interesting. I’ve always had an interest in finance. BSI, as we started it, was a business plan to acquire and get into the mortgage servicing business. That was in late 2005, so almost 20 years ago.”

Today, BSI Financial is one of the fastest-growing mortgage servicers across the industry and currently services nearly $50 billion in mortgages. 

Sharma has a vision of where he sees the company going.

“We spend a lot of time thinking about it. What is our vision? What’s our purpose, almost, right? After a lot of thought, the way we would define it is we’re really passionate about homeownership, but also, our role is in what we call fostering sustainable homeownership. We want homeownership where it is sustainable, whether that’s as a servicer or a lender. We want to make sure that the borrower, the consumer, who is the customer who’s in the home, we can make it into a sustainable home ownership experience for them,” Sharma said.

To do that, company leaders ask how they can foster this through their different businesses and customer experiences.

“Today, we may be touching a quarter million families. Our goal is over the coming years, we believe we have an opportunity to significantly scale that up. So, we want to double our business and more because we think that with our combination of different businesses, we can provide a great value-added solution for all our customers. Whether they be our borrowers or whether they be a lender or other clients,” Sharma said.

Looking ahead to the rest of 2025, Sharma said interest rates will play a big factor in what happens in the housing market.

“They went to seven and higher, but seem to be coming down a reasonable bit. I would say that interest rates are probably going to be one of the biggest drivers of what happens to housing,” Sharma said.   

#technology #financialservices #mortgagenews  

A father and son team that worked together to build a legacy in financial services say there is something special about running a family business.

Robert and Curtis Knuth of National Credit-reporting System and Service 1st have the kind of bond that comes with working together for decades. They laugh together easily and can complete each other’s thoughts.

NCS was founded in 1978 by Robert Knuth. It has the distinction of being the first organization to offer IRS tax transcript solutions (TRV® Services) nationwide.

NCS distributes income, identity, and employment solutions through its Alliance Partner network, which includes its affiliate, Service 1st.

Service 1st is a national credit reporting agency providing lenders and other benefit providers with verification solutions, background screening, and other credit-related services to streamline origination and risk mitigation processes.

The Knuths recently sat down with The Mortgage Note’s Scott Kimbler to talk about their history together and the future of the two companies.

Robert Knuth started his career with Equifax. He worked for them for a number of years in locations throughout the United States and remembers the switch from paper to digital files.

“And it was not an easy task,” Robert Knuth said.

Today, Robert Knuth is retired, but he’s still involved peripherally in the family businesses.

Curtis Knuth is president and CEO of NCS. He is also the CEO of Service 1st and remembers going to trade association meetings with Robert as a teenager, where his father introduced him to other families who worked in finance. That included independent mortgage bankers and credit reporting companies.

Curtis Knuth said his interest in being part of the business had a lot to do with the technology that was revolutionizing financial services in the late 1990s and early 2000s. By the time his father resigned from his role as president and CEO at NCS to become chairman of the board of directors in 2017, Curtis had served as executive vice president of NCS since 2010.

Robert Knuth, who has Parkinson’s disease, explained that he wanted to make sure the company was left in good hands.

“Well, you know, the one thing that I was concerned about throughout all of this was my strong belief in quality,” Robert Knuth said. “We are comfortable that this is going to be very well handled by Curtis and whoever he passes it on to.”

Both father and son agree that it is a point of family pride, especially for Robert, that Curtis was able to follow him into this field.

“Yes, it’s really cool,” Robert Knuth said. “It’s a great opportunity to have your thoughts continue to somebody else.”      

Not that having a family business is simple. There is a bit of a balance when it comes to keeping work and home life separated. Curtis Knuth said his mother, Maryann, has always been good at striking that balance. She was a big part of building NCS.

“My mother was very instrumental in NCS as the company was growing, running our books and all sorts of different things over there. I certainly don’t want to leave my mother out,” Curtis Knuth said.

Looking forward, Curtis Knuth said NCS and Service 1st are on good paths. NCS is continuing to do more on the verification side. Service 1st has expanded its leadership team with four senior hires specializing in mortgage operations, sales, and technology.

#familybusiness #creditreporting #mortgagenews 

The CEO of Land Gorilla says his goal is to empower financial institutions with best-in-class construction lending technology.

Sean Faries founded the construction loan management software company after seeing the need for a platform that allowed for faster disbursements and a seamless exchange of information between stakeholders.

Land Gorilla is headquartered in San Luis Obispo, California. Clients include construction lenders, commercial banks, community banks, credit unions, independent mortgage bankers, and private money lenders.

Rally Credit Union in Texas announced a partnership with the company on May 6.

Faries recently sat down with The Mortgage Note’s Scott Kimbler to talk about Land Gorilla and his vision for the company.

Faries said he started the company in 2010 after losing everything during the financial crisis. His home was foreclosed on, he had a newborn son, and he was having difficulty finding a job.

“It was just a really low point in my life. And I had a friend call me up and say, ‘Hey, you know, there’s a bank out in the east and they are looking for people who are up for doing inspection work on some construction projects.’ Throughout high school and into my college years, I had done inspections for banks. I loved doing it,” Faries said.

Faries created an LLC online, and in his first year of business, he pulled in $8,000 in inspections.

With a $500 credit card from Wells Fargo, Faries incorporated the company, got a phone going, and registered a domain.

150 employees later, Land Gorilla is a leading technology provider of construction loan management software.

“If you keep working hard at something, good things will happen,” Faries said.

Faries says he is still excited to see Land Gorilla grow and explained the onboarding process for new clients.

“The lenders contract with Land Gorilla, they subscribe to our software platform. In the typical engagement, they configure their platform and onboard all their construction loans. And they get them all digitized and set up on the Land Gorilla platform. Then they send out invites to borrowers and the general contractors that are associated with those loans,” Faries said.

The platform uses machine learning and some artificial intelligence to reduce manual tasks. It can be accessed from a mobile device so parties can keep each other updated.

Faries says Land Gorilla goes a long way in keeping projects organized.

“The borrower and lender had this construction loan agreement, and they have to make sure all the I’s are dotted and T’s are crossed,” he said. “It is like doing your taxes by hand versus using something like Turbo Tax, where you’re just entering a couple of pieces of information and everything goes to work behind the scenes, and you’re able to file your taxes the same day. It is a very similar experience to Land Gorilla. We make it as easy as possible for people to get that information and exchange information behind the scenes.”

The time it takes to onboard depends on the financial institution. Large financial institutions typically take about 90 days.

Land Gorilla was recognized as a 2025 Tech100 winner by HousingWire.

#construction #constructionlending #mortgagenews 

The new CEO of Dark Matter Technologies is focused on delivering value for clients and helping lenders thrive.

Sean Dugan says that it all starts with the company’s culture. 

“Our clients will absolutely see an impact on their business on whatever culture that we build at Dark Matter, so that culture will be highly communicative, very transparent, and collaborative,” Dugan said in a recent interview with The Mortgage Note.

Dugan lives in northern California and has been in the industry for over 20 years. The last 14 have been with the company.

“I’ve got a strong understanding of the mortgage tech space, really deep and meaningful relationships with clients as well as our employees, and I have a strong vision of where to take Dark Matter,” Dugan said.

Dugan’s vision has three tenets: value, growth, and simplicity.

Driving value for clients goes without saying, Dugan said.

“If we’re not creating efficiencies in automation and driving the cost to originate down, then we’re not spending our time in the right areas, so that will be, once again, a keen focus for Dark Matter,” he said.

Dugan said they are looking to grow the organization. They will be active in the acquisition market as they continue to grow the company’s stable of products and services.

Dugan said there will be a keen focus on simplicity in their business model and products. That means simplifying administrative tools as well as making it easier and more cost-effective for vendor partners to integrate their services with the Dark Matter ecosystem.

Company leaders at Dark Matter announced their expansion into the servicing market in February.

At the time, Dugan said adding a servicing platform fulfills a critical need for many of their clients, enabling them to expand servicing operations and improve their flexibility.

“The collaboration between our teams is already driving innovation across the product family and will help our clients operate more efficiently and stay in compliance throughout the entire loan lifecycle. We plan on making sure that this industry-proven product becomes a staple within the servicing space,” he said.

During his interview with The Mortgage Note, Dugan said their platform supports all types of loans, including reverse mortgages, from a servicing capacity.

The servicing technology industry needs competition, he added.

“It’s an area that is underserved. There are only a couple of providers,” Dugan said. “We think this is an area of the market that needs competition, and we’re very excited to throw our hat in the ring.”

When it comes to artificial intelligence, Dugan said AI is here to stay, but he doesn’t see it taking over the industry completely.

Dugan explained that humans will always be needed to make underwriting decisions, but predictive AI and automation can help.

They are focused on leveraging AI for document analysis.

“We’ve got a very robust decisioning engine as well as the industry’s best exception-based workflow,” Dugan said.

He explained that as long as a loan meets a lender’s criteria, it can go through an exception-based process and move forward without being touched by a human. If it falls outside the criteria, then the loan is pulled and delivered to a person who can analyze the loan information more closely.

This provides greater efficiency and allows a client’s employees to focus more time on complex, specialized loans, Dugan said.

#artificialintelligence #loanservicing #mortgagenews