Ask anyone in the housing industry and they’ll agree that 2023 was one of the most brutal years in the industry since the Great Recession.
While some of the same headwinds—high mortgage rates, low housing inventory and lower mortgage demand—that stifled business growth last year have carried into this year, there’s reason for optimism. Executives at a handful of the nation’s top mortgage lenders say they’re confident about a market turnaround in 2024 and their company’s position to emerge stronger and more resilient than ever.
To find out how major mortgage players are tackling new challenges and opportunities in the year ahead, RISMedia interviewed the following executive leaders:
- Rick Arvielo, Co-Founder & CEO, New American Funding (RA)
- Alpa Lally, EVP, General Manager of RKT Ecosystem, Rocket Companies (AL)
- John Bianchi, EVP, National Sales, loanDepot (JB)
- Andrew Pohlmann, Chief Marketing Officer, Guaranteed Rate (AP)
- Desmond P. Smith, Chief Growth Officer, United Wholesale Mortgage (DS)
In this extensive Q&A, these leaders share insights on several aspects of their company’s business strategy to give an inside look into their lender playbooks for 2024.
Author’s note: The following Q&As were lightly edited for clarity and brevity.
RISMedia: What are the top areas your company is focusing on in 2024?
Rick Arvielo: You’ve got a lot of borrowers that just aren’t starting their home-buying journey the same way their parents did; they’re online, they self-serve and they research. So the one thing we’re expanding is our NAF Leads program, in which our call center connects online buyers with our loan officers in the field if they choose to join NAF Leads. And if they can’t take the call, the lead goes to our call center where they will be served. There’s going to be more and more opportunities in the online channel. So (the program) is something we’re really proud of and it’s working.
Alpa Lally: Our goals are focused around providing help for homebuyers. They’re patiently waiting for more forgiving interest rates to buy, but there’s going to be more time for a competitive market, and I think this is where things like technology really come into play. What we’re trying to do from a technology and a product mix standpoint.
You’ve got things like Rocket Homes launching on Apple CarPlay and its app now on Apple Vision Pro. Making the app available on Apple Vision Pro, it’s absolutely amazing. Within the integration, homebuyers virtually explore listings and tour properties, using that mixed reality without leaving their living rooms.
John Bianchi: We have a very good joint venture group, and that’s expanding with opportunities with home builders. The home equity business we opened up a year ago has been doing very, very well. We do work with a sister company called mellohome. We buy a tremendous amount of leads and we work on converting those leads with our REALTOR® network (and connecting them) with our in-market loan officers, educating consumers and helping convert them into homebuyers. So one of our playbooks is doubling down on leads. We’re also getting a lot of veterans coming through via social into our pipeline. Over the last year, it’s been generating business and leads, so we’re probably going to spend a lot more money on that.
Andrew Pohlmann: We’re getting ready for potential refi business; we know it’s still a big opportunity for consumers. We’re making sure that when that happens, we will take advantage of it just like anybody else will, but we’re still staying committed to purchase, especially because so much of our business comes from our referral partners. Other areas we’re looking at are new affordability products that Fannie and Freddie are rolling out as well as our OneDown, a 1% down payment assistance program. Another big area of focus for us is reverse lending and we’re hoping to see how that grows.
Desmond P. Smith: Everything we do in UWM is to set up wholesale mortgage brokers to be able to compete in the marketplace. The foundation here, outside of supporting mortgage brokers, is about the purchase business. We’re really focused to ensure that every loan, from the time it’s submitted to being able to close, is done within 14 days. So speed is the key for what we do.
We just rolled out (in February) Mortgage Matchup. It’s a website that consumers can go to and find experts in their local market. It’s more targeting first-time homebuyers, the people who are more digitally focused and helping them get information. We rolled out another program called Refi 100. On all of our conventional products, we’ve improved the pricing by 100 basis points to help consumers save money.
RISMedia: What are the main challenges facing your business and/or within the overall market today? How are you overcoming these issues?
RA: These underwriting rules weren’t designed for the (current) economy, so you just have to be in a place where you’re comfortable making credit decisions based on what you can prove as it relates to the way things are done today. For instance, the Latino community is more comfortable being cashless. So their credit scores and their qualification criteria are impacted by that. So you have to be willing to go the extra mile to put people into homes. And I think that that’s a differentiator for us and New American Funding, because our business is really run by our underwriters.
JB: The fact is we’ve got so many homebuyers that are preapproved, but lack of inventory seems to be an issue. Everybody wants a turn-key home that’s ready to go and, of course, if everybody wants the same thing, that’s where you’re getting 15 to 20 bids on properties. We’re trying to educate a lot of our consumers, especially first-time homebuyers, about renovations and to not be afraid of the homes that need work. You can get renovation conventional, FHA or VA loans, so that’s part of our education process.
AP: Not unlike other lenders, we had to go through a number of cuts and that was certainly painful, especially as it relates to the people side of it. We looked at what’s really important in terms of platforms, systems and partnerships and things like that and I think that’s where much of the learnings came from was really getting down to the vital few of things that you need to survive and now thrive in this market.
A lot of organizations built up a lot during the refi boom and, in many cases, lost track of what was important, meaning they chased refi. We stayed true to our roots, which is a very purchase-centric organization. Lesson learned is to stay lean and that way you can remain more competitive as you enter another tough market.
DS: Affordability and a lack of inventory are the biggest challenges we’ve faced across the board and in our business now. We’re trying to do our part to make mortgages more affordable. We rolled out a Conventional 1% down payment program in which buyers come with 1% down and UWM pays the other 2%, up to $4,000.
RISMedia: Where do you see your marketing dollars and efforts being best allocated? What about technology investments?
RA: We’re developing tools to take these more uniform documents like title reports and appraisals and things like that, and teach the large language model to look for how to decipher them and just to create more efficiencies. It’s a long road because this is new stuff, you know. You’ve got to develop the talent asset in your organization, you’ve got to start feeding information into it. So that’s underway at New American Funding.
We’re committed to our tech fields and to automating operations, and we’re doing a lot of that over in India. We took the time to actually incorporate there and have about 250 employees in India for both the tech and back-office functions.
AL: We’re super excited with (new CMO Jonathan Mildenhall) coming on board. Our focus for marketing is continuing to grow our brand. We want to be the trusted partner for clients and we want to elevate—for clients and brokers and everyone we work with—the importance of homeownership and what that means for consumers out there. That’s going to be a big focus again in 2024.
JB: We’re actually doubling down on our marketing efforts. We have a whole new marketing team underneath a new CMO (Alec Hanson). We’re pretty excited about building out all these new things for our originators to be successful. We got through a rebuild of Salesforce, our CRM and our marketing, and we built tons of automated campaigns to help support that.
Arguably, we have one of the best point of sales in the industry. We are taking our power platform which we’re upgrading to the new Windows basepower. And so there’s a big investment that’s being made by a company now on technology from an LOS (loan origination system) perspective. Our goal is to use technology for efficiency, accuracy and to drive down the cost to the consumer. And our loan officers will be happier and more efficient and be able to do more deals.
AP: We’re really excited this year for the expansion to our language-access program, Contigo 100% (“With You 100%”). It allows the consumer that wants to do business with us in Spanish to go all the way from learning about us through marketing materials to apply to a home, a mortgage, going through the mortgage process, getting closing docs, getting disclosures, and closing their home 100% in Spanish.
Generally, most of the advertising we do is on behalf of our loan officers and empowering them to do things. This includes paid social and paid search. Some of it is just for brand recognition, but much of it is in (the loan officer’s) name. Through our partner, Total Expert, we offer customer intelligence for our loan officers’ book of business, helping them understand when their customers have an equity opportunity or predictive analytics around life events.
DS: We provide a lot of tools to help our mortgage brokers be able to go to consumers. We offer Brand 360 Brand Builder, our own marketing system that we give to our brokers that allows them to reach out and connect with their referral agents. It has social media tied into it as a brand builder that will help them with fliers. Plus, we have a large team dedicated to IT and technology, and we are investing not only in tech stack but also in AI and everything we can do to give brokers a competitive advantage.
RISMedia: What are the key mortgage products or loan features you’re offering that set you apart in today’s competitive market?
RA: A few years ago, we created NAF Cash, which levels the playing field and helps traditional homebuyers compete and win in multiple-offer situations. We are buying homes for cash on behalf of our borrowers, and they take out a conventional or VA loan to pay us back. It’s an incredible tool for our loan officers and real estate agent partners to win deals.
AL: Our One+ program is targeted at helping the segment of the population with the biggest need. It allows them to buy a home with just 1% down. That’s really surfacing and addressing the need to help that population. That program has a ton of traction and it continues to be a big focus for a lot of our clients coming through. Home equity is definitely going to be another focus for us in 2024. And a lot of that will also build into like the digital experience
JB: Along with educating veterans about VA benefits, we’re heavily promoting some of our new programs that we rolled out at the end of the year. The 1% down program and zero-down FHA program push on our Vision 2025 on helping the underserved. One way we do that is to educate consumers on what’s available but, at the same time, about their finances.
Our FHA program is 3.5% down, but they borrow a second mortgage from us so the down payment as well as closing costs can be borrowed with a 3.5% percent or 5% second mortgage (which has to be repaid) on top of a first mortgage. That program has been very successful.
AP: What we still know is traditionally a big pain point for borrowers is the financing process. The product that we launched called Same-Day Mortgage, which is exactly that: it does your full approval on the same day. We were really proud to be part of a pilot with Fannie Mae and what they call the HomeReady First mortgage (for first-time homebuyers), really great down payment assistance programs and then our program which is called OneDown, but no surprise a 1% down mortgage. We also entered the home equity market, personal lending and we’ve had an insurance company for a number of years.
Our consumers are looking for us to help with financial confidence, solve a debt issue or solve a dream they have, and the first mortgage isn’t always the right product. So I think offering our loan officers and customers different services they can use fits well with our focus of taking care of people’s financial confidence and financial health.
DS: We stay focused on the major products: conventional, FHA, VA and USDA. But we did roll out products like bank statement programs, investor flex or investor (debt-service coverage ratio) loans. I think we have the most competitive jumbo pricing in the market. We believe that we’re offering brokers an entire portfolio of products to solve whatever their consumers’ needs are.
RISMedia: Are there operational or strategic changes you’re undergoing this year to better position your business for growth and profitability?
RA: From an acquisition standpoint, since we’re not in a lot of the country, there’s a lot of great smaller regional players out there. That’s the $2 billion-a-year guys that are in two or three states, right? Well, that’s a sweet spot if those are states we’re not in, and that gives us a chance to promote our brand in areas that otherwise might not be exposed to it. So I have had conversations with several other companies and I’m hopeful you’re hearing more about acquisitions.
AL: We want to continue to meet the client where they’re at, and brokers are a very critical part of our business as well.We want to continue to build out tools and platforms for them and to enable them in their local markets that allow them to connect with their clients. There are thousands of brokers that we partner with across the country, and they have relationships with the clients who are looking to buy a home. So we’re providing the tools and capabilities that allow them to facilitate those relationships.
JB: The technology piece has really assisted us. If we didn’t have the technology we have, we might be a lot more reliant on human capital to take us through this. And every year, we seem to get better when it comes to the tech piece, and less reliant on gearing up headcount to solve for an increase in business.
Like anyone else, we’re gonna have to hire more folks when the market is right, because we have to be efficient. But when it does get busier, we might not have to hire as much as we’ve had to in the past because of the technology improvements we’ve been making and investing in.
AP: For a number of years, reverse lending is another thing we started to make a much bigger commitment to in 2023 and now in 2024. And especially because home equity is at a record high and you have a lot of retirees that are struggling in retirement. You put those two things together and it’s a really great recipe for retirees to be more comfortable and live a better lifestyle.
DS: We absolutely expect to remain the largest lender in America. We’re overstaffed by design. We have continued to hire when I think every single mortgage company in America I know of was laying people off. We all know at some point rates will drop and, when they do, the exact same thing that has happened previously will happen again. Most lenders’ turn times will go two or three times (longer than ours) because we continue to hire and invest in technology and AI.
RISMedia: What key messages are you telling your people and consumers right now as everyone regroups from 2023 and looks to find new business and stay optimistic amid tight market conditions?
RA: We like to think of ourselves as the kinder, congenial place where we focus on our culture. We focus on our mission. We focus on our passion. We’re investing in things to keep the borrower with their loan officer for life. Everyone’s so transactionally focused to close the loan and move on to the next one. Our goal is through our culture, mission and passion that the hope is that’s where our loan officers will say, ‘That’s where I’m staying for the rest of my career.’ So far, so good.
AL: There’s always the ongoing market challenges, and we’re all working through it. Interest rates are where they’re at and have come down a little bit. But inventory is so low, so it’s a very competitive market. These are all challenges that we’re facing head on, every day with our clients and trying to find the best solutions to get them into the homes of their dreams.
JB: People are relationship-driven, and I think if you want to be successful you have to get up. You’ve got to go out and shake hands, meet people, have coffee, get to know people and build relationships. I think so much of our industry has become very transactional.
We’ve seen a lot of attrition in the industry over the last year, but for the ones that are staying in it, you know, if they stick with it, they’ll do very well. But that’s my advice: have a business plan. I find that people don’t have business plans, but they have a business plan. You need to wake up every day and work towards that plan, and you need to get out and build relationships and add value to your business partners.
AP: As others have exited or looked at different priorities, the one place where we have really been able to cement is a 20-plus-year legacy of starting off as loan officers, focusing on loan officers and focusing on the community of real estate agents that we know we can serve well. We’re actually really excited about this year after a lot of hard, painful work last year. But whether a refinance boom shows up or not, I think we’re in good shape to keep growing.
DS: I would say to any brokers who’ve made it through this cycle: stay the course. UWM is always there to support them. Our wholesale brokers are the face of the market, and we’re the back-office shop to support them. We’ve seen a lot of folks transition from retail to wholesale over the last 18 to 24 months. I think we’re going to continue to see folks do that.
