Transforming Mortgage Challenges into Opportunities with Dale Vermillion | March 31, 2025

Intro: 00:01:10

Welcome to Optimal Insights, your weekly source for real time rate data and expert capital markets commentary brought to you by Optimal Blue. Let's dive in and help you maximize your profitability this week.

Jim Glennon: 00:01:25

Welcome to Optimal Insights, your weekly source for timely market analysis and expert commentary from Optimal Blue. I'm your host, Jim Glennon, von vice president of hedging and Trading client services at Optimal Blue.

Our clients and industry partners have long relied on Optimal Blue for trusted insights and commentary. And these podcasts are an evolution of our commitment to keeping the industry informed. Let's dive into today's episode. Welcome everybody.

Thank you for being here on this Monday, March 31st, last day of the month. We got a really good show today.

Early on, we'll talk with Jeff and Alex about what's going on in, in the economy and some big numbers this week and also some huge news that came out this morning. You're probably all aware of the, at this point of the $9.4 billion Rocket and Mr. Cooper deal that was announced Monday morning.

So we'll talk a lot about that. And then after that we have Dale Vermillion, CEO and founder of Mortgage Champions, has agreed to come talk with Kevin and I.

So we'll do a little interview there later.

Dale has some really good insights on where he sees the market today, where he sees some opportunities and maybe some views on the market that might surprise you. So definitely stick around for that. We'll talk through what's going on there.

Otherwise, you know, in the way of data, the OBMMI conventional 30 year still above six and a half. Obviously we're all cheering for it to dip a little bit below that this morning. We're rallying a little bit. Threads are tightening a little bit.

e saw pre pandemic. So seeing: 2019

And we've just been reading, you know, I've been reading more articles about homeowners potentially coming off the sidelines this season. So looking forward to more discussion about that as we get into the, the home buying months in, in, you know, March and April.

And with that, let's, let's go over and talk with Jeff and Alex about what's going on in the economy and that rocket deal. Okay. Welcome Jeff McCarty, Alex Hebner. How are you fellas doing?

Alex Hebner: 00:03:26

Morning. Doing well.

Jim Glennon: 00:03:27

Here to talk a little bit about a lot of big numbers coming out this week. So we definitely need to get to that.

But first, you know, rocket mortgage rocket Just seems to be on a, on an acquisition tear recently that, you know, they bought Redfin a week or two ago. And then this morning the bit huge News comes out. $9.4 billion acquisition of Mr.

Cooper, one of the, you know, major servicers and originators and correspondent lenders in our industry. So obviously big news for our industry as well as just, you know, the mortgage business in general. Right.

I mean, right off the bat we have to assume, you know, a play to corner more of the market to own more servicing than they, you know, than maybe anybody has, except for maybe Wells Fargo. There'll be around $2 trillion I think was the stat that was estimated.

And you know, between that and a lot of the, you know, the tools that Rocket already has that we've talked about on, on this podcast before and on our webinars to just sort of have this holistic view of a potential borrower's financial situation and a little bit of a foot in the door to get them a mortgage, just even more tentacles into the market. Now if they get in, you know, if they stay in correspondent lending with Mr.

Cooper, there's obviously an opportunity there to bring in borrowers they may not otherwise see. They have a huge recapture trap. Right. That they're, they've already put in motion.

Alex Hebner: 00:04:53

Right.

Jeff McCarty: 00:04:53

I think, I mean, I think both those companies had traditionally recapture play, but they just got their borrowers initially from different avenues. Right. Of course, Rocket in the kind of retail, direct to consumer space, obviously. And then Mr.

Cooper traditionally getting their new customers through the correspondent space and then recapturing those customers once they do get them in the door.

So really, you know, now they have kind of the two main avenues for getting customers in the door and probably looking to create synergies on their recapture business from there.

Jim Glennon: 00:05:27

Yeah, mega deal probably goes through. Right. We were discussing earlier and Alex did a little research on the FTC chair.

Alex Hebner: 00:05:35

Yes, the new FTC chair, Ferguson, Trump's guy went in there. He was approved during the Biden administration. So he didn't even need Senate approval when Trump made him chair.

But yeah, he's definitely more on the business friendly side than former chair Lina Khan. He has expressed certain areas of the economy that he would put antitrust legislation on, namely Big Tech.

But in the mortgage space, I think it's more, I see this one going through. The only holdup I could potentially see on this one is just the back to back Redfin and Mr. Cooper acquisitions.

I think it very clearly lays out what they're trying to do here. You know, just Be as you were saying, end to end, end to end company regarding the mortgage space. So that's the only issue I could see there.

But I mean they move forward with the deal so you know, at least their internal law team thinks things it'll clear.

Jim Glennon: 00:06:30

Yeah, I mean makes sense any the pendulum is swinging the other way. Right. Whenever there's a Republican controlled government, you tend to have less regulation. That's just going to be the theme.

And this doesn't seem, you know, like there's going to be. There's still a lot of opportunity out there.

We're seeing consolidation in the market as it tends to happen when we get into these phases of the mortgage industry. There's still a ton of other big independents out there. There's big, you know, banks that still do a lot of lending.

So doesn't feel like we're near the level where you, you know someone might look at it as some sort of monopoly, but it is.

Yeah, two mega deals back to back is a pretty, pretty wild and you would, one could speculate that a year ago this would not have gone through but this time around it probably, it probably does.

Jeff McCarty: 00:07:11

So at this point, I mean the big number you Talked about, the 2 trillion or that's 1 in 6 mortgages outstanding that are basically included under one of the, the two now one combined entity expected to close in Q4. Much more to come here. We'll watch and see how this plays out.

Alex Hebner: 00:07:29

I think the, the business play in regards to Mr. Cooper is as we were talking about before the, the cast here, it's, it's a hedge in both directions.

It allows them to bring the recapture in house, you know, recapture those loans as they refi or they're bringing on a massive servicing portfolio and that can, that, that can float you through the, the tougher times when we're, when we're seeing less loan volume if rates remain in the higher range which they for the time being seem to be.

Jim Glennon: 00:07:52

Yeah, definitely reaching some sort of a critical mass and probably creating efficiencies as well within the organization. You know, we, we, we and many of you out there work really closely with, with rocket and with Mr. Cooper.

So we all obviously hope that you know they retain most of the folks that, that, that work there but obviously they're probably going to make some changes that are where they're going to have some redundancies. We've all been through acquisitions before and there tends to be a little bit of that.

But yeah, hoping that it's a positive for most of the folks that work for those two organizations. All right, let's move on to what's going on this week in economic and market news. No small docket this week, right, Alex?

Alex Hebner: 00:08:32

Yeah, no, the one that's really stealing the headline is going to be the quote, unquote, Liberation Day, AKA the day tariffs are going to go into place, which is Wednesday, April 2nd. This is really a delay on the tariffs that were supposed to go into effect, I believe, in early February.

So some conciliatory moves from both Canada and Mexico. The majority of the tariffs were put on hold until April 2nd. You know, stock market's very jittery over this. We don't have a ton of details.

You know, it's pretty broad, like 25% on aluminum and steel, 25% on any country that we have a trade deficit with. They were saying this morning it's not just going to be the, quote, unquote, biggest offenders.

I'm not saying it's an offense to have a trade surplus with the US but the 10 to 15 biggest offenders in regards to those that have a trade surplus with us, they're going to get tariffs in addition to it. Sounds like everybody else. We'll see. I think the next 48 hours will be really telling, in my opinion.

I don't think you can back off on these tariffs a second time. It really kind of shows that the trade policy has no teeth. So I would expect the tariffs to go into place again. Stock market's very jittery over it.

Seen some sell off this morning. Decently steep sell off this morning. We'll, we'll keep an eye on it.

It could take, you know, a month or two for these to flow out into the general economy.

Jeff McCarty: 00:09:46

And really, I mean, Trump's using like he has been, you know, using tariffs as kind of his, his main tool.

You know, newly, he's kind of gotten upset at Putin over the weekend because Putin is not being as cooperative as he wants to be on a peace deal in Ukraine. So he's threatening more tariffs on Russia or secondary tariffs on, on countries importing oil from Russia.

So, you know, if anything, we're continuing to see tariffs expand here over the past several days.

Jim Glennon: 00:10:15

Yeah, makes sense. And I, I think you're right, Alex, that this time around they have to go through this, this April 2nd date has been out there.

It would look pretty weak and I think kind of silly if, if we backed off at this point. So I think it goes through.

Jeff McCarty: 00:10:29

And when you label it Liberation Day and you label it that positive, I'm not sure if you have a choice, skip it.

Alex Hebner: 00:10:36

Yeah. You can't call off D day.

Jim Glennon: 00:10:40

Absolutely. I mean, you know, hurt them in the wallet. That's always been, you know, that's always been a thing. Follow the money, hurt them in the wallet.

And that's how we're go, how we're negotiating this time around and hopefully positive things come out of this as far as, you know, re reshoring jobs and lowering taxes and all the desired effects of these tariffs. It's just going to take some time.

But meanwhile the stock market is worried about growth and we're seeing, you know, the symptoms of that today and going back several weeks as these things likely become reality come, you know, first week of April and then for us that.

Jeff McCarty: 00:11:13

Just as you said earlier, it's keeping rates stubbornly high. We've really been pretty flat essentially for the, since the last week of February.

So you know, going on almost six weeks now here of rates just right around 6.6 on the conforming 30 year. Yeah. Again with all the volatility rates are pretty flat.

Alex Hebner: 00:11:33

Yeah.

It definitely feels like there's, I mean the word that I keep reading, I feel like I've seen more and more in every article I read is stagflation, the rates. I know everyone groans when they hear that, but the inflation and jobs are pushing in equally negative directions.

But as we know, jobs and inflation ideally move inverse to each other. But right now we're seeing them both move in a negative direction. PCE last week came in a little bit hot, came in at 2 1/2 percent.

I think it was supposed to be 2.3% year over year which matches the direction CPI and PPI have been going. And this is pre any tariffs. When tariffs go into effect they will drive those numbers up. Unemployment on the other hand has been creeping up.

I think it's been, you know, we've been talking about a little bit like in the white collar space that unemployment is becoming a little bit worrisome. But from, from a general economy standpoint it's still at like 4.1% I believe.

Jim Glennon: 00:12:26

Yes.

Alex Hebner: 00:12:26

Which is still technically in the range of healthy natural rate of unemployment. I think if we creep up towards 5% then we should be really worried. So yeah, just just things to keep in mind.

Jim Glennon: 00:12:35

Big number coming out this week.

As you said, there was already kind of a white collar job recession even starting to see jobs in hospitality start to tail off and that was a huge driver of job gains over the last couple years. Right. Was, was hotels and restaurants and they were, they've kind of flattened out.

I think the last report, the major contributor to adding jobs was healthcare, which hopefully we'll still see some improvement there, and construction. But otherwise we should expect government jobs to contribute to a negative effect moving forward, at least for the next year, I would think.

And we may actually see some of that this Friday.

Dale Vermillion: 00:13:09

Right.

Jim Glennon: 00:13:09

Like some actual effects of Doge and some other belt tightening effects.

Alex Hebner: 00:13:14

Absolutely.

Jim Glennon: 00:13:14

Yep.

Alex Hebner: 00:13:15

You know, there's been so much back and forth on so many of these jobs. You know, usaid, cfpb, they're the ones that really captured the headlines.

But they're, there's, there have been cuts and then, you know, taking back the cuts all across the government, I think, I think we'll really start to see those official numbers start to snake their way out in this report and probably the next one as well.

To your point about hospitality workers, I was reading an article earlier this week about how the airlines, they were expecting to have a really a boon year actually. And then they're not seeing the numbers in the first quarter for bookings for summer travel, specifically like domestic travel.

They said international travel has held up decently well. So that tells you, you know, maybe the slightly more wealthy customer is holding up all right.

But those that are, that are flying domestically, those bookings are down. And I expect there to be a corollary there to, to the hospitality industry.

Jim Glennon: 00:13:59

Yeah, a little bit of that doom. Spending is slowing down. I think we've talked about it a lot. Credit cards are getting maxed out. Folks are not buying that ticket.

And if anything, there's a weird effect going on right now where people are buying certain items or certain things that might have tariffs on them in the future.

So we may have some like ghost spending or fake spending going on right now that's going to slow down after folks, you know, you know, bomb shelters are fully stocked. All right, what else? We're expecting around 4.1.

And anything that gets, I, you know, I've heard even close to four and a half percent is when the Fed might have to start really focusing on unemployment rather than inflation. And they do have, they got a lot of ammo. Right.

That's one thing that would fight against the idea of stagflation is we're still in a really restrictive spot in terms of what the Fed is doing.

So if we did get in a place where economic activity was slowing down and jobs started to go negative or start to get close, closer to zero build, I could see the Fed stepping in and juicing the economy a little bit and maybe allowing inflation to tick up closer to 3 or above 3%.

Alex Hebner: 00:15:04

Right.

Jim Glennon: 00:15:05

But yeah, we'll see Friday how nasty that number is.

Alex Hebner: 00:15:08

Shakes out.

Jim Glennon: 00:15:08

Yep. Yeah.

Alex Hebner: 00:15:09

Expecting 4.1 on the official unemployment rate and 140,000 on non farm payrolls, so.

Jim Glennon: 00:15:14

Gotcha. Which is still relatively low, like, compared to what we've seen the last few years.

Alex Hebner: 00:15:19

Yep, yep. Absolutely.

Jim Glennon: 00:15:20

All right, Alex, Jeff, thank you very much.

Alex Hebner: 00:15:23

Thank you.

Jim Glennon: 00:15:25

All right, ladies and gentlemen, welcome to our two guests, Kevin Foley, of course, from Optimal Blue. You all know Kevin, a very frequent guest on our podcast. And then Dale Vermillion is joining us today. Thank you for being here, Dale.

Dale is the CEO and the founder of Mortgage Champions. That is a. It's an organization that we'd love to have Dale describe here and give a little summary of here in a minute.

But Dale, you know, y'all likely know him from LinkedIn or from his podcast. He's also a fellow podcaster. Has over 20,000 followers on LinkedIn. By our, our count, maybe approaching 25,000.

He has helped over a million originators and service professionals in our part of the industry. So really, he's been doing this for, I think, 35 years, Dale.

Dale Vermillion: 00:16:12

Yeah, 30 years as a speaker and trainer and 42 years in the industry. It's been a few minutes, for sure.

Jim Glennon: 00:16:19

That's amazing. Would you mind telling us just a little bit about yourself before we get into some questions on what's going on in the market?

And tell us about Mortgage Champions.

Dale Vermillion: 00:16:27

Well, first, Jim and Kevin, thanks so much for having me. Honored to be with you guys on this broadcast and looking forward to just having a great conversation.

You know, I started back in: 1983

national mortgage company. In: 1995

And this is our 30 year anniversary mortgage champions. We've been doing this for 30 years. We've trained over 700 lenders across the nation.

Million and a half or 2 million loan officers in that time, tens of thousands of leaders.

And I've had just the great privilege of being around just the best of the best in the industry and just kind of learning and gleaning from people on what they do to have incredible success.

And we built an incredible selling system and leadership system all built around that, that we call the gps, the guaranteed path to success, that we've helped many, many clients just double, triple, and quadruple their numbers.

have done really well in this: 2022

Jim Glennon: 00:18:08

That's awesome. Yeah, that's great. Background story. Basically worked your way up from the mail room, right? Everybody likes to hear stories that. That way.

I think it's. It's the American. American dream, right? And then from there, you built up your own. Your own empire, and you've seen all types of markets.

So we do want to get into some of that here in a minute. Just, you know, what do you think of this market versus what you've seen over the decades? And maybe this is a good. A good segue.

So Kevin and I were just a few minutes talking about the conference a few weeks back where. Where you. Again, amazing speaker. We're up there on stage, and Kevin was.

I think Kevin was super engaged and came back with some really good anecdotes about that.

And as I said earlier, too, I was on your LinkedIn page digging through some of that and just had some really good thoughts about this current market and where we are, and. And a lot of it was pretty similar to what we talk about on this podcast. So I'm glad that we all.

We all have a good amount of, I think, hope for what this next year or two looks like, even though we're all still kind of weaning ourselves off of what the pandemic market looked like. But anyway, Kevin, would you mind telling. Just telling that story again real quick?

Kevin Foley: 00:19:16

Yeah, yeah, for sure. So let me. Let me set the stage here.

So I'm sitting in there in the audience early, early one morning, and Dale gets up on stage and he says, this is one of the best refi markets in decades. Not just markets, but refi markets. And I'm sitting there and I'm like, oh, God, where is he going with this?

Jim Glennon: 00:19:36

Did people gasp?

Kevin Foley: 00:19:38

Right? But by the end of it, My mind was blown and I was like, we need our optimal blue lenders to listen to this.

So I was super excited to have you here, Dale, on the podcast to be able to tell this story. So you ready to get into it?

Dale Vermillion: 00:19:53

I'm ready, I'm excited. Can't wait.

Kevin Foley: 00:19:55

All right, let's drop some truth bombs. So tell us, Dale, why is this one of the best refi markets in decades?

Dale Vermillion: 00:20:04

Yeah.

You know, it's so interesting, Kevin and Jim, because as you guys know, the problem that I've seen for 42 years in the business is lenders and loan officers alike, and leaders too, they evaluate the refi market by what rates are doing. And that is exactly the wrong indicator. That is the worst thing you can look at. Rates have nothing to do with whether or not it's a good refi market.

Refis by nature, if you think about why they're even created, what is the goal within a refinance transaction when done properly, it's really three things you're trying to do. Number one, you're trying to help people lower their monthly payments and create more cash flow. That's the number one reason why people refinance.

That's gotta be central to everything that you do. Number two, get access to cash out of their equity for things that are meaningful and life changing within their homes and their families.

And then finally, number three, this should be one of the key pieces is to get out of debt, not to get into debt. And to me, that's always been the three guiding principles. Now let's just talk for just a minute about today's marketplace and why.

I think it's one of the best markets that we've seen for refis in 20 plus years. It's because of the economy. Just look at the economy today, okay?

You ask any consumer on the street this question, what do you feel about today's economy?

They're all going to give you five alarm fire bells going off left and right about how they're worried about the future, they're worried about their payments, that they're worried about interest rates, they're worried about cost of things, they're worried about, you know, inflation. I mean, you're going to get an earful of all of their concerns. And here's the deal, okay? We are sitting in a marketplace.

All right, I'm going to give you three statistics that I shared in that, in that session that tell me this is an incredible refi market statistic. Number one, the average non mortgage, the average consumer debt according to the ascent at the end of last year in the United States is $105,000.

Let me say that again, $105,000. The average car loan, new car is 39,000. The average used car is 29,000. The average credit card for a homeowner somewhere around 15, 16,000 in debt.

You got student loan debt, you got personal loan debt, you've got, you know, all of these factors that come into play. So people are loaded in consumer debt, there's no question about that. Higher than it's ever been in history.

Never thought I'd see a six figure number to that. It's there. Now. Let's contrast that to you're sitting in a market with an average loan to value of about 40% for homeowners in the U.S.

and CoreLogic just released the number last month that the average equity, gross equity in a home in America is $313,000. Take 80% of that year, 244,000 in usable equity. So here's the deal, okay? Forget about 6%, 7% interest rates, forget about all this other stuff.

We got a whole bunch of people out there that are hurting exponentially. And why are they hurting? Is it just because of inflation and the economy and interest rates?

No, it's because of debt more than any other single factor. They're sitting on 240,000 plus in equity to work with 100,000 in consumer.

And I know a lot of people go, why have a lot of customers that have 100,000? I know that. So they have 30 or 40,000. It doesn't matter. If you got 40,000 in debt, you're paying over $1,200 on average for that.

Because the average payment to debt ratio is 2.75%. So here's the deal. You take that debt you put into a mortgage loan today at a 6.5% rate.

Not only can you lower their payments exponentially, but you can give them cash while you do it. And here's one of the biggest problems in America today.

59% of homeowners, according to MBS highway, have less than $10,000 in liquid assets, cash availability in their entire portfolio. Think about that. 200 some thousand in equity. You got no money in the bank to back yourself up if something goes wrong in a very tough economy.

So here's the deal. And I'm going to use this quote that I used in the session, okay? Everybody talks about rates, rates, rates, rates, rates, rates, rates, forget it.

Rate don't matter. Here's the deal. You don't pay a rate, you pay A payment and you don't get a rate, you get cash.

So if I can give you cash at a payment less than what you pay today, why are you concerned about the interest rate? Well, but I got a 3% rate. Yeah, but it ain't working for you. It's not working for you on a daily basis.

What matters to a consumer today who's a homeowner is can you put me in a position of cash flow plus where I've got access to funds that are left over at the end of the month after I pay my bills and, and I'm not robbing from Peter to pay Paul, can you help me get out of that debt? That's high rate debt.

I mean look, look at the 28% credit card rates and the 17 and 18% car loan rates and the 15 and 16% rates you've got on all these other debts. Why are we worried about a 7% mortgage rate?

The bottom line is if you can lower their payments, give them cash in the process and help move out of that debt, to me that, that is absolutely the answer to the problem in today's economy. That's why it's a great refi market.

Kevin Foley: 00:25:21

It's so true. And I think it's one of those things where I don't think we hear that perspective enough of.

Look at the record amount of consumer debt that's out there. Look at the record amount of equity. Just put those two things together and there's so much opportunity for lenders out there.

Jim Glennon: 00:25:41

It seems like it's going to continue to be forced for consumers to go tap into that equity. Right.

Like you said, we were addicted to the Fed for many years, keeping rates low and we kind of had this mental block of rates have to be this lower, why would I refinance my house? But at this point we're in debt, we're broke, cash wide, we're cash poor. Right.

But all this equity is sitting, trillions and trillions of dollars are sitting in equity in homes. And it feels, I mean we're already seeing it, we're seeing volume on cash out refis expand.

And it's not because rates have made a dramatic move south. It's because debt is higher than it's ever been and we're paying 25% on credit cards.

It's insane to continue doing that when you can get an interest rate of, you know, six and a half percent for 30 years to pay a lot of that down rather than just basically just servicing that, that 25% interest every month.

Dale Vermillion: 00:26:32

Yep. Yeah. At the end of the day, what matters is not just your mortgage debt or not just your consumer debt. What matters is all of your debt.

That's the thing that I train loan officers all the time. I'm like, look, you guys, the mistake that loan originators make is they compartmentalize debt, okay? You got your mortgage debt.

Well, we don't want to touch that because that's 3%. Then you got your consumer debt, and then you got your auto debt, and then you got your credit card debt. No, no, no. All debt is debt.

It's all owed and it's all got to get paid back. End of conversation.

So if I can show you how to create a better avenue to do that, and, you know, there's so many questions, I'm sure that people are watching this, are going to pop in and go, well, why not just do a home equity loan or line? Well, I can give you a million reasons for that.

We probably don't have time to get into all those conversations in this podcast, but here's the bottom line that's not necessarily going to solve the problem, because think about this, all right? I love this. A loan officer says, well, I don't want to touch your mortgage, so I'm going to put that borrow on a home inequity line of credit. Okay?

So let's make sure I understood what you're going to do. You're going to take a borrower who's got $43,000 in credit card debt, okay? Revolving line of credit debt, which tells you what? They're a debtaholic.

That's what it tells you. They spend money. They don't know how to control what they've got. And what are you going to do?

You're going to pay it off with a big old credit card on their house. That's what you're going to do. So you're going to increase their line of credit from 43,000 to 150,000.

And now they're going to be tempted to use that for all of the things they've ever wanted to purchase in their lifetime.

They're going to go buy boats, and they're going to, you know, they're going to do things where they're going to buy depreciating assets with appreciating assets, which makes no sense. And you're going to tell me that's a better loan for them just because the rate's a little bit less than the mortgage rate.

If I were to refinance, and it's really only 1 or 2% less. I don't think that's a sound solution. I want to get people in fixed rate, fixed term debt that can get them out as quick as possible.

I want to accelerate their debt load and help them be debt free as soon as possible. It's just that simple because to me, that's really what should happen. I quote this a lot. Romans 13:3 says this.

Owe nothing to anybody except your obligation to love one another. What a great line that is right there. That's the life everybody's looking for right there.

Jim Glennon: 00:28:56

Sure.

Dale Vermillion: 00:28:57

So you know what, help people get out of debt so they can enjoy their families more. Let's not just keep putting them in more debt and give them bigger line of credits that creates more, exacerbates the problem they've already got.

Jim Glennon: 00:29:08

Right?

Kevin Foley: 00:29:08

Yeah, I think that's, it's a really good point.

d even going back through the: 2000

You train loan officers day in and day out. What are some of the tips and tricks or strategies that you use to help create that mind shift amongst originators?

Dale Vermillion: 00:29:50

Great question, Kevin. So let me go back for just a minute. I think it's important for me to establish something here to gain credibility with the audience.

en I started in the business,: 1983

ed to do as a loan officer in: 1983

I would call, I get lists of customers at the local bank that had a 10% interest rate. I would call the borrowers up and say, here's the deal.

I'm calling today because you've got this 30 year loan that I can put into a 20 year loan for you. I can lower your payments by paying off your debt, provide a tax benefit you don't have, and in doing so, even helping you cash out of your equity.

So here's the question. If I could do all that, would you like to hear about it? And they'd say yes.

And I mentioned I started in: 1983

I got promoted in 11 months to a branch manager when I was 20 years old. Youngest branch manager in company history for a thousand branch company, Transamerica Financial Services.

The big old pyramid out in San Francisco is who I work for. Why? Because I was closing 32 loans a month by simply just showing people how to save money in powerful ways.

So when you ask the question, how am I teaching people today? Here's the first thing you gotta do.

Quit looking at the interest rate on the current mortgage and saying, well, they're not gonna wanna pay that off if they can't afford it. It doesn't matter what the rate is at this point you've gotta look beyond just the interest rate. Okay?

What you have to look at is what's their debt load and what's their payment load. That's what matters. Compare that back to their equity and if there's room to show them how you can save them money, just put together an option.

Now you might put it all together and it may not lower their payments. If that's the case, then you can't help them. End of conversation.

But if they have enough debt load, which most people do today, that you can actually save the money, then why are you overthinking that?

Why are you thinking for the customer instead of just saying, I know this may sound crazy to you in today's rates with the rate you've got, but I just found a way to save you $474 a month instantly. Is that something you'd like to hear more about? Who says no to that? Almost nobody. It's that simple.

Jim Glennon: 00:32:26

No, that's, that's a good point. And thank you again for some of the background too. I think.

Not that anyone's questioning your credibility, but I think it's important that you've, you've been through this and again seeing market after market and we've, again, I think this industry is still a little bit recency bias is, is we, we look at the rate, that's all we think about. And rates are so much higher than they were four years ago. That's all anyone can think about. Rates have gone up 100, basically.

But we're still in an environment where rates are relatively low historically. And as you said, there's a point where you, I mean, people are borrowing money at 26% on those credit cards.

That doesn't make six and a half look so insane.

Dale Vermillion: 00:33:03

That's right. That's exactly right. And car loans are in the teens. I mean, it's all relative at the end of the day.

And that's the thing that I want people to understand. You know, forget again, you don't pay a rate, okay? You get a rate, you pay a payment. That's what matters to the borrowers. Let me say this too.

I think it's important for people to understand that when I'm talking about paying these debts off, I'm not talking about re extending terms back to 30 years.

A lot of times you can do a 25 year loan for a borrower who's got 28 years left in their current mortgage or 27 years left and actually reduce their term while you're doing this. So you're creating all kinds of benefit for that consumer.

I am about helping consumers live their life right and better and then counseling them on, okay, now when we pay off these credit cards and lower your payments, do not reopen these things. Go ahead and prepare your letters now, send them to those companies and say, do not increase my line. Do not send me a new credit card.

Close my account.

Keep a couple of them open to keep your credit score in good shape and keep the balances very small so that you know you're not creating the temptation to get back in. The bottom line is we can help people in a very tough economy to live a much better life.

this came into the market in: 2019

So you think that 3% rates are normal, 3% rates are not normal. That was an anomaly. 8% rates are normal and we're below that. And 17 and a half is a whole lot higher than 7 and a half.

So when people are saying, oh my gosh, they're seven and a half ago, that's 10% less than I used to sell. Doesn't seem so bad to me. It's all, it's all perception and perspective at the end of the day.

Jim Glennon: 00:34:53

Yes. And by the way, mortgage interest is tax deductible, whereas a lot of other interest is not. Right.

Effective rates versus actual what you see on the, on the note. Right?

Kevin Foley: 00:35:03

Yeah, I know.

Dale, you mentioned that during the, during the presentation, if, you know, if you have a, let's you know, call it $5,000 benefits, your taxes that you can write off, that's essentially like another 400 bucks a month that you can be thinking about as lowering your payment, which is a great, great perspective to take relative to consumer debt.

Dale Vermillion: 00:35:21

Yep.

Jim Glennon: 00:35:22

Right. Well, should we switch gears a little bit here? And so we talked about refis. So best refi market in Dec.

One of the best refi markets in decades that we're embarking upon here. And you know, the volume honestly does support that.

But also seeing hopefully here as the season picks up, seeing a little bit of a pickup in purchase business. But there's still a lot of talk about, about supply. Right. And affordability in general.

For whether it's first time home buyers or people, you know, looking to move.

What are your thoughts just on what the housing market is today and how, how do you help loan officers and, and other professionals deal with purchase business?

Dale Vermillion: 00:35:59

Yeah. So let me give you the solution to inventory because this is what everybody talks about. Inventory is the problem. Inventory is the problem.

Inventory is not the problem. And let me prove that to you. Okay. We're sitting on about 850,000 units in inventory in the United States right now. Okay.

And that changes all the time, but that's still, I'll just give kind of an average number. Okay. If you were to ask me or ask any expert, what does a good market look like for inventory? They're going to tell you.

1.2 to 1.4 million units is a really good market. 1.2 is pretty much where the standards at. Okay? So let's do a little math here.

If you're at 850,000 compared to 1.2, you're about 40% below a good market. But now let's forget. Remember one really important thing that we've forgotten.

he last three years since the: 2021

So if you got 40% less inventory but 60% less originators, you actually have more inventory per capita by loan officer than you've ever had before in the last five years. Your inventory is not your problem. Your problem is your network. You don't have enough referral sources that are sending you business.

So look, here's the deal. Where do most sales take place? They don't take place on the front sheet. The front sheet being the MLS listing.

They take place in the back room between two realtors who know about a property that's going to go on the market. They, they grab it before it ever gets there. They get buyers and sellers together and they sell it in the back room.

If you don't have relationship with those realtors, you'll never see those listings. They don't hit the inventory numbers, and you're never going to know about them.

So we're worried about sales not being there when they're actually there, because the inventory numbers aren't even true. There's actually more inventory back sheet if you add those numbers in. The bottom line is you gotta blow your network up.

So I talk to loan officers every single day. I train thousands per month all over the country and ask this question. How big's your network? You know, actively working with six or seven realtors.

And how long have you worked with those six or seven realtors? Oh, they've been my realtors for the last 10 years. Okay, let me make sure I got this right.

The market rates have gone up 5%, 4% in the last four years. Inventories drop from what it was, and you've got the same network with people that may not even be succeeding in the marketplace today.

That's your problem. You need to have 50 realtors, not eight. You need to have a hundred people in your referral network, 50 of which are active.

million dollars per month in: 2024

70 million per year. 50 million per year. I'm training all of these high producers all over the nation. And what's the single common thread with all those high producers?

Big networks. We all got big networks. It's that simple.

Jim Glennon: 00:39:04

Yeah, you're getting, you're getting a look at that ghost inventory that I've, I've read a lot about that more recently. And as you said, especially in a tight market like this, those houses are sold before they ever hit mls. There's no reason to list them.

There's no reason to have open house. It's just like.

Dale Vermillion: 00:39:17

Exactly. Right.

Jim Glennon: 00:39:18

I know the good realtors know what their buyers are looking for. And then the seller realtor knows, you know, who to contact in that network. And if you've got, you know, 100, it's exponential. Right.

The difference between 10 and 100 is not 90. You know, you then have a look at thousands of, of more houses if you expand that network. That's really good.

Dale Vermillion: 00:39:37

Yeah.

Jim Glennon: 00:39:37

Super good advice. I mean, how do, how do you even do that? I've never been or a realtor. How do you get going on that?

If you've been kind of sitting with those 10, those 10 realtors for the past 10 years, what's your, what's your avenue to get to 30, 40, 50?

Dale Vermillion: 00:39:53

You know, it's crazy, it's so simple, it's almost ridiculous. Because here's the deal. We have social media. Every Realtor is on social media. So the problem today.

Let me just, let me just talk about the problem that I see, okay? And if you're a loan officer, please stop doing this. Number one, we look at data and reports and we want to do everything digitally.

s is a relationship play in a: 2025

You don't, you don't have those access to those realtors and those backroom conversations if you don't have a deep relationship with them of trust and loyalty. So you've got to build relationship. How do you do it? Start with social media.

Go on and do your homework on those 50 realtors in your community that are doing the most business for the last six months. And don't look back a year, two years, anything pre August 17th of last year before the Nir settlement doesn't count anymore.

You're looking post August 17th, how have they done since the Nir settlement? And you want to get your top 50 realtors in your community and also builders and you can work with financial planners and a bunch of other resources.

But let's just talk about realtors because that's where most people live their life. And here's what you need to do.

Just go out and connect with them on social media, follow their pages like their posts, share their posts and do that for a 10 day period. And once that's done, now pick up the phone and call them.

They're going to know your name already because they've been seeing it on social media for 10 days. Wondering, who is this Kevin Foley guy that keeps reposting my listings? Who is that good looking dude? I want to meet him.

Kevin Foley: 00:41:35

I feel so called out.

Dale Vermillion: 00:41:36

There you go. Yeah, and there you go. And all of a sudden they're like, well, you know, hey, I'm Kevin. You've probably seen my name.

I'd like to sit down with you and talk about your business. I love what you guys are doing. I love the homes that you're listing.

I sometimes have buyers that come to me and they're, they're looking to buy a home. I might be able to channel them towards some of your listings. Can we chat about ways we can help each other grow our businesses.

They're going to invite you out every time because they're looking for help. Quit trying to sell them on your service and your products and your pricing. That's what everybody does. They're sick of hearing that.

They don't want to talk to lenders. What they want to hear about is how are you going to help me grow my business?

If you have that conversation, they'll invite you in, you'll build relationship. It might take you a couple of months to get them to send you some business.

But you know what, it's the old thing, you know, it's the tortoise and the hare tortoise wins the race every time because it just plods day after day after day and stays after it. That's the key to success.

Kevin Foley: 00:42:37

Yeah, I think that those are great insights, you know, and I mean, social media, you know, nowadays is just so powerful just in terms of, you know, how you can connect with folks.

And it's actually how I, you know, first got connected with Jake on your team and you know, start started talking to him and just learned a little bit more about what you guys do. And you know, look at, look at how, you know, things can evolve, even, you know, that are, that are starting online.

So definitely appreciate the idea.

If you're cautious, if you're nervous about just what you post or who you're sharing, just get after it because at the end of the day it can lead to real things, which is great insights overall.

Dale Vermillion: 00:43:18

Yeah, I mean, that's a great example right there.

Kevin here, I've been doing this 42 years, 30 years, training companies, trained more companies than anybody maybe in the industry when it comes to that. And that's not an egotistical statement, which is we've worked, we've always worked at the enterprise side. So I'm working with lenders.

That's what we do, that's what we've always done for years. So we've worked with hundreds and hundreds and hundreds of them and millions of loan officers.

And yet you'd never heard of me until you ran into my son Jake, because he's active on social media. And look, here's the deal, here's what I see a lot of loan originators doing. We all want to be influencers. Just quit that.

Stop worrying about being an influencer. You know, I literally talk to loan officers that will tell me, yeah, I just spent, you know, 47 minutes putting together a three minute video.

That's really great. Took me 19 takes to get it right.

I'm like, for what three people are going to like your 47 minute long, you know, thing that was a three minute video. Three people. You're not going to all of a sudden become 9 million people following you on TikTok because of that video.

The chances of that are wanting a gazillion. The people who are going to be influencers are already there. There's not that much room left for more of them.

You just need to be the plotter, the person that you go on social media and use it for. The intention it's designed to connect with people, to meet with them, to build a relationship.

or it to rain money. That was: 2020

We are in a market where you've got to make it happen. You got to get out there, you got to be proactive, you got to be intentional, you got to be deliberate and you got to work on relationships.

That's, that's the game in a nutshell.

Jim Glennon: 00:44:59

Yeah, I mean that's always been the case in this industry. Right. Except for some of these booms where, where the fish were jumping into the boat.

It's a little unconventional to, to say what you're saying today, but it's absolutely wise and makes, makes a ton of sense. Yeah, don't, don't try to be, you know, the, the influencer boat is full.

You know, making the 47 minute video, you know, playing a prank on your dog is probably not going to get, you know, enough likes to start the business up. It's back to the old school of, of just generating relationships, cultivating those and then, and then waiting.

Some of it is you have to, for any new lead, you have to wait a couple months for it to pay off. But that's, you know, almost any kind of sales organization. I feel like that's always been, been the case.

Dale Vermillion: 00:45:40

It is. I mean, look, we're in the industry with the single biggest financial transaction consumers ever make in their lifetime.

This is not a, this is not a small product that we're selling. This is the biggest investment that people make. It requires relationship.

And we're working with realtors who can make millions of dollars per year if they do their job well. We're working with some really important situations here. It takes a trusted advisor.

It takes somebody that they have confidence in and they have belief in and they trust and they like you're going to win so much more business if you go relational than if you go digital. I mean, that's just all there is to it. And look, I know. I get it.

It's easier to shoot off a link to a borrower and let them fill it out on themselves. And it's easier to do all the digital stuff, to connect with people and never get in your car.

But you're not going to win in this marketplace doing that. Not in a 7% market. It ain't going to happen. You've got to get out there and be among the people.

Kevin Foley: 00:46:45

Yeah, great, Great insights overall. Dell, you know, we've been. Been really, you know, awesome for, for me just listening to.

To you speak and hearing some of the perspective that you've brought through throughout your career and how to approach this market. And, you know, this is, this is all I, you know, hope really great stuff for our listeners as well. And, you know, appreciate you.

You coming on and sharing all that stuff.

Jim Glennon: 00:47:09

Yeah, absolutely. Yeah, that's. No, the pleasure's all. All ours, Dale. Honestly, this was. This was a lot of fun, super insightful and relatively simple. Right.

We're in one of the best refi markets in decades, and on the purchase side, it's all about relationships, right? That is. That is relatively simple.

It's not super simple to get there, but with the right coaching and the right discussions and the right mindset, feels like something that every originator is either doing or needs to hear or, or just needs to. To feel, you know, to, to feel vindicated in what they're doing. So very much appreciate you, Dale. Thank you for spending time with us today.

We'd love to talk again soon. And, and yeah, good luck with everything in your business as well. And just real quick, how could people get a hold of you?

Obviously LinkedIn, but where are other places where people can. Can get in touch with you?

Dale Vermillion: 00:47:58

Yeah, I mean, you Google my name, you're gonna find me, I guarantee. There's no question mark.

Kevin Foley: 00:48:05

There's only one.

Dale Vermillion: 00:48:07

Thank God for that. We're all happy about that. Yeah, It's. It's the overmillion.com and, and thank you guys for having me. It's really fun to work with you guys.

Optimal Blue is such a great company and you guys have just made such a difference in the industry. We're grateful for what you provide to lenders. It makes a difference. So thanks for all you guys do. We appreciate that.

Jim Glennon: 00:48:27

Appreciate you saying that, Dale.

Kevin Foley: 00:48:28

Yeah, thanks.

Jim Glennon: 00:48:29

All right. Thanks again, Dale. Thanks, Kevin.

Kevin Foley: 00:48:32

Yep. All right.

Dale Vermillion: 00:48:34

Thank you, guys. For having me.

Jim Glennon: 00:48:35

Take care, guys.

Dale Vermillion: 00:48:36

See ya.

Jim Glennon: 00:48:37

Okay, let's close this thing out. Thanks so much, Alex, Jeff. Thank you, Dale and the mortgage Champions. Appreciate the interview there. And that's it for today.

Join us next week for another episode of Optimal Insights, where we'll continue to provide you with the latest market analysis and insights to help you stay ahead. Don't forget to follow us on LinkedIn for more updates and to access our latest video episodes.

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