HELOC For Seniors, with Longbridge CEO Chris Mayer

0:01 We're excited today on the Reverse Mortgage Podcast to have really one of the leading figures in the industry and with a real innovative product that a lot of people can talk about but this is the guy who's responsible for it. Chris Mayer is the CEO of Longbridge Financial and they recently launched their HELOC for seniors product which is well, let me describe it. Chris, thank you so much for joining us today. Well, it's great to great to be here. I really appreciate your having me and I'm look been looking forward to our conversation. So, HELOC for seniors sounds really straightforward but it's a little more than just a HELOC for people who are older. It's a HELOC for seniors specifically using the reverse mortgage concept. So, describe kind of how this product is and what the inspiration was for it. Sure. So, I'd like to give you an alternative name for the product which is what you might call it if you were in the UK or in Australia which is an interest-only retirement mortgage. And that is a little more descriptive but is actually the same idea. So, this is this is a product that we've actually wanted to launch at Longbridge for a long time. We in fact bought the domain and filed a trademark for the product back in 2018. Wow.

1:21 So, this is something that we've had on our agenda for a long time. At that time, the company, you know, was barely you know, was barely getting going and getting started. The idea of offering a product like this would not have been in the cards for us at that point. But, it was something that even before interest rates fell and all these people were sitting with low interest rate mortgages which is certainly the dynamic today that is if anything made this even more attractive. The idea that, you know, people when you think about young home buyers we wouldn't tell somebody or most people wouldn't tell somebody, you know what, if you haven't saved at least 20% down, you should never be allowed to buy a home. Some people will say that. Most people realize that, you know, you're either going to get help from your family, you're going to do something else but buying a home, the vast majority of people, if you look in the data, bought a home with a down payment of 5% or 10% not 20% because it's really hard particularly today to save money. So, when you're young, we create products to help you get into a home and again, those things did not cause the, you know, 2008 crisis. What caused it was investors and speculators and, you know, really bad lending products but not that we were, you know, that we were somehow subsidizing people buying homes.

2:43 On the other end of the spectrum, you know, when you're middle-aged, we start to create products to help you pull money out of your home to trade up and buy more expensive homes. We have, you know, W, you know, people who don't have W-2s, people who are, you know, stated income. You have all sorts of different products for people who have specific, you know, their own businesses or, you know, had some, you know, repair their credit. When you get to retirement where people's incomes are falling not rising, we don't have anything that are designed for those people other than reverse mortgages. And as a company that, you know, as a long-time believer in reverse mortgages as you are, Bill, it's not a it's not that we don't that I don't think reverse mortgages are great product. They are. It's just that most people when they look at a reverse mortgage, they sort of get nervous about them. And they get nervous cuz they don't understand them. They think we want to own their home, we're the lender. They have all sorts of misconceptions. And for a long time, you know, almost forever, the reverse mortgage industry has taken the view that well, if we could just educate and explain it to people, that would be fine. If I switched from the other side and said now you're somebody who's thinking about a mortgage. If somebody across the table from me said, "Look, if I can just explain to you how it really works." The reaction that many people have to that, particularly including my kids in their, you know, from the time they were 2 years old when dad says, "Can I explain to you how it really is?" you know, there are lots of people who don't want to hear it. And so, as an industry when our message is we want to educate you and explain to you don't really understand, that is a hard message for many people to hear particularly for many people in their 60s.

4:31 And so, I resemble that. Yeah, exactly. Well, I do too. So, I'm with you. But none of us want to be told if you just understood better. Right. So, we think of HELOC for seniors as a product at least if people who are in their 60s are going to get a mortgage with payments that they're going to have to make for the next, you know, 25 or 30 years, we should at least design a product that meets their needs better than where the current products are. And so, the existing products today require you to pay off the loan over the next 20 to 30 years. And there are a million plus people that take out products like that who are 62 and older every year. And if you look at the data for cash-out loans from 2024, there were about a hundred billion dollars of applications by people 62 and older for a cash-out loan predominantly HELOCs and closed-end seconds. And they were all taking out products that had two characteristics. The first is you're going to have to pay down the loan in retirement. That's effectively forcing you to save. It's one thing if you're 30 or 40 years old and you're taking out a loan or 50 years old and you have a period of time where you're going to be working where your income is going to be rising not falling to be able to make payments to pay them down.

6:09 The second is for most HELOCs, you have some kind of balloon feature where the payments go up significantly. In the case of a traditional HELOC, you have 5 to 10-year period where you have a draw period and you're paying interest only. Then you lose the ability to draw and all of a sudden you have to make payments to fully amortize a loan. Those payments, if you're a borrower who's 65 years old, let's take the, you know, the 10-year period. So, at age 75, you've gone from a chance of work. Basically, everybody who gets a HELOC at age 65 is working or the vast majority cuz their income was used to qualify. At age 75, only a few percent of people are going to be working in the US. No matter what they say they want to do, surveys show a big disconnect from what people say they're going to retire and they're going to actually retire. So, by age 75, your payment's going to go up 40% and your income is going to be lower than it was when you qualified for the loan. So, that's a terrible feature to give. And then even worse, many of them are adjustable rate. And so, because of the adjustable rate feature, I'm now going to make you take the risk that not only did the payments go up 40%, they could go up further.

7:27 And we've imposed a tremendous amount of risk on the elderly, on people who are in retirement because of the design of products. So, what got us interested in this is trying to figure out how can we solve this problem which is to create something that somebody is asking for. We know they're asking for them because there were a hundred billion of applications last year, 30% of which by the way were rejected or withdrawn. So, you have all these people who are looking for something, we should at least create the best thing we can for them. And that's the idea of HELOC for seniors is how do we hear what people say they want as opposed to telling them what we think they want. And again, I believe in reverse mortgages. This is not coming from and our company sells a lot of them. So, this not coming from somebody who doesn't believe in the product but when consumers say they want something, sometimes you should actually give it to them but give it to them in a way that meets what they may or may not understand they really are looking for. You know, at first blush, like a lot of people I'm sure, I saw this product and said, "Well, there already is, you know, a line of credit feature in the reverse mortgage." And I would I would describe the reverse mortgage as kind of the Swiss Army knife of mortgages in that it has like five or six amazing great features to it. Individually, none are ideal but in combination, it's an amazing tool. And so, I have a Swiss Army knife here at my desk. I keep it cuz it has a knife, it has a screwdriver, it has a whatever. You know, from time to time you need something but it's not a good screwdriver. So, I need a real screwdriver, I go get a real screwdriver. And I think what you've done is taken the Swiss Army knife reverse mortgage and said, "But there's so many people who just want an equity component and let's try to find a way to break off that piece." And just like, you know, I'm sure, you know, Baskin-Robbins sells more chocolate ice cream than I do because they offer 31 flavors or 30 besides chocolate, you got to offer people what they want. So, I really appreciate you do that. Now, you're the CEO of the company. I'm sure there were originators before you who

9:32 Said, "I'd love this product. They can't actually make it happen." Can you describe for us and I'm sure there's some limits but what is it How does a product idea like this A come to you in the first place cuz I imagine you're running the company and not originating loans yourself all the time. And so, you're not as on the street. How is this How did this particular idea come to you? And then B, how does this go from, "Wow, what idea" to cuz I'm sure there's attorneys and documents and forms and bankers and stuff that ends up being nice cuz I know where James we feel like, "Hey, just tell Chris this and we'll have that product next week." If only, right? Exactly. You are you could not be more right, Bill, as of course you know. Things you don't snap your fingers and just have something appear. There's an enormous amount of work involved and particularly for a product like this as best we can tell we've never seen this product having been offered in the United States before. But as I mentioned earlier, I subsequently found out through traveling and I probably been to eight or 10 countries and met people from 15 at least who offer some kind of senior focused products in those countries. So I've spent a lot of time globally looking. In fact, I was a featured speaker at the Equity Release Council in the UK this year. So I spend a lot of time looking at what other people are doing and learning. So part of it is and I've done this for decades, not years. You know, my background is very unusual. This is part of how I get so involved in product development, which is I have a PhD in economics from MIT. I spent the early years of my career, I started off at the Federal Reserve. When I actually ran a refinancing club that we didn't talk publicly about but it was, you know, not using we didn't have inside information about what the Fed was going to do.

11:22 But, you know, it was it was an interesting thing. I learned a lot about mortgages. I bought my first house at age 24. So I've always had a tremendous interest in how or maybe I should say my wife bought it while I was a grad student with her income and, you know, let me live in it with her since we were married. It was very nice of her to do that. But we, you know, I've been interested in these products for a long time. I've taught at, you know, Columbia and Wharton, ran the real estate programs, senior vice dean of the business school. So I built a strong academic career. And during the global financial crisis in 2008 to 2012, I was very heavily involved in public policy. So I testified six times at House and Senate committees. I'm actually one of those very few bipartisan people. I was actually three times called by Dems, three times by Republicans. So I think of myself as being somebody who tries to think about sensible ideas and solutions to problems. But you know, through the time I spent in academia where I was very successful in writing papers and getting things published and studying things and, you know, then I worked in the public policy arena and, you know, I did a commission paper for the Financial Crisis Inquiry Commission on the role of ratings in the crisis. So I've done a lot of research on it.

12:44 But at some point in my career and this is how I got going at Longbridge, I sort of felt like what I wanted to do was not just write about things or ask the government to do them, which as we know these days is not a particularly successful mode of anything, which it took me four or five years to figure out of spending a huge amount of time in Washington. I decided at some point I wanted to help build a company where we could build products and take seriously the idea of solving problems in the private sector, which is where we in this country really solve problems. Not in Washington and, you know, I don't want to say in academia cuz I'm very positive on the I you know, the role the role of an academic, of somebody studying problem taking data seriously, understanding analytics is something I think is really important. And that training as an academic had me kind of ahead of how people thought about things. In 2008 at Columbia, we had the entire record of all property transactions for sale. And we mapped by congressional district the number of people who are eligible to refinance their mortgage by congressional district published on our website at Columbia. So I've long believed in the view of data and trying to understand things.

14:04 But what's been different is that, you know, when we started Longbridge, it was really the opportunity to build a company that was going to build products that took seriously understanding what people do in the world and what the data says they do, but also understanding risk and how to control and manage risk. And so those are two things that our company's been really good at. And so when you get to product development, most of the time you don't have the CEO leading that, but actually given my background, that's something that I've always been passionate about. We have other people at the company. So one of the differences between having a former academic who comes up with ideas is we need a sales team who says, "All right, that's a good idea." Or oh, that's not such a good idea. And I can promise you I've had many more ideas than we've implemented as a company, some of which I thought are great and maybe still think are great. So you need a sales team and a marketing team to say, "Yeah, that's fine, but people may or may not buy it." And you also need an operations team who understands how to execute. And in the case of HELOC for seniors, what we really needed was a partner to get into the business, a partner who could help us on the technology side, and a partner who understood the HELOC business and was an expert in that because our company up until this point has only offered reverse mortgage products. And so building an entire set of products where borrowers make payments and we have to think about credit and underwriting and securitization and financing and all of these other things, you kind of do it yourself at your peril. And that's really where Figure came in. And as a turn I have an interesting story about how, you know, how the partnership with Figure came out. But we've been looking for a partner and we've been looking for somebody to work with to do this for a while.

16:06 And the moment came up last year to start to really have the rubber hit the road, to start to do this. And this was when we seriously thought that our company was in a financial position to do it. And that we had the, you know, the bandwidth and the wherewithal to really start to develop products. So this is one of three products we've launched this year that have had a real two of which have had a really significant impact on the volume. The third will. And so we are very much about trying to be innovative on the product side and trying to figure out how do we serve older Americans? How do we help people who are retiring with a home, which is what 77% of all people 65 are doing as homeowners? How do we create solutions for them to feel comfortable using home equity in retirement? So was this product something that you came up with through your, you know, exposure to other countries or other markets? Or was it something came to you from somebody on your team? Or how did this particular idea go from somebody's idea to you're selling it, you're making these are the loans on it. So it's actually real.

17:17 Right. So it was really exactly as you described, which is if a lot of people are trying to create a cash out I'll call it a forward mortgage, a traditional mortgage. Let's try and make that product as responsive as possible for the needs of older Americans. And so when we looked we felt that the requirement that you make somebody make payments that pay off the interest, the fact the equity that you're forcing someone to save, that was the fundamental point of HELOC for seniors. That was really the idea that I had. And then when we talked about it in the company that people said, "Yeah, that seems like a really great idea." Sure. Because it fits into the bucket of what people are looking for. Yes. But it's designed for the needs of older Americans. And so the more we looked at data, the more the data supported the idea that this was a great thing. So it was an initially an idea I had. Later on traveling, I discovered that it was a product that was offered in other parts of the world. And in fact, our, you know, the parent company of Longbridge, Ellington Financial, actually has an office in London and they participated in securitizations of the UK retirement interest or interest only retirement mortgage. So our parent in the company has experience doing this. So it kind of all came together really nicely Nice. From the idea.

18:46 You know, forgive me cuz I never being in the C-suite myself, you always imagine the presidents are all sitting around in meetings without any sense of what's happening in the field. To me, the ability to unlock equity for a senior is just so obvious. And to do it with a equity line of credit, and yet, you know, I'm sure that it's harder to go from the idea to implementation. You mentioned the importance of a partner. One of my mentors is Grant Cardone. He says, "Even if you have the world's best product and you give it away for free, it's 10 times harder to sell than you would ever imagine." Right. Even it's free and the best product, it's way harder to sell. Now you guys have launched this, you have a really I think a slick name for it, HELOC for seniors. You have a website done to it. But obviously, it's not as simple as just you launching this product and you tell Joe get the forms and Mary check it by legal. There's got to be some implication and you say operations to get to the streets effectively in a way that the product rolls out and customers sign up. So what's that look like going from idea and then you had the partner to help you put the finance together for it, but now you got to get out in the streets to your originators in a way that they can be effective with it. Right. So, you know, the first thing is, you know, we are we have launched this product with Figure. Figure is the largest non-bank HELOC originator.

20:06 They've been doing the technology side since 2017, I think. And have been really focusing they were first, you know, the idea that, you know, Mike Cagney had when he built Figure was that they were going to really streamline the origination process. And there have been, you know, pretty few other people that did it as well and maybe no other people that have done it as well in the HELOC space. But the second innovation, and you see this when you look at what Figure has done with their IPO and as a company, is trying to create better execution for the loans through, you know, creating provenance on the blockchain so you can better create the ability to borrow against the loans and have lenders think that they have collateral. So, warehouse lending is a lot more efficient. You don't have some of the things you've seen in the, you know, in the auto loan side where, you know, they pledge collateral to multiple people. Here, you know, in mortgages that's harder, but for to streamline HELOCs and to do to deal with title and other things like that idea, you know, part of streamlining is finding other solutions to these problems. And so, that's worked and also the ability to ultimately get liquidity by trading individual loans on the blockchain. These are all real innovations in the space that Figure has been involved in. And so, by partnering with them, we took the things that we don't know how to do very well, which is offering HELOCs and finding the most innovative financing solutions, partnering with Figure has given us the opportunity, and I say partnering these are Longbridge closing loans in our name. So, this is a Longbridge loan.

21:51 Longbridge is servicing loans, and we're really good at servicing loans for older borrowers, but the technology and the access to the innovation, those are the things that we've done with Figure. And because they know what they're doing in this space, last quarter they did two and a half billion dollars of HELOCs through their through their technology. So, they understand this business really well and are growing incredibly rapidly. So, that's really what came together was having the idea, having done the legal work, and the market analysis. But, as it turns out, the CEO of Figure, Michael Tannenbaum, was a student of mine at Columbia. Oh, there you go. There you go.

22:37 And so, you were wondering how did all this get together? Michael and I have got together for breakfast. I followed his career. He's, you know, simply the most successful of the students I've had or one of the very most successful. And you know, there are other people who may be listening like, Chris, what are you talking about? But it, you know, Michael really, you know, to be in your sort of mid-30s and to IPO a company, Figure, you know, he was a, you know, ran mortgage, built a mortgage business at SoFi, then went to Brex, which was, you know, one of the first few employees at Brex, which built an incredibly innovative credit card business for small businesses to being hired and brought in to take a company public at his age and with his knowledge base, you know, tremendously successful person to work with. And so, for us as a company, combining some of the analytics and, you know, I think a trusting relationship that we had for a long time together, it meant that it worked through some of the things that would have otherwise been a lot harder. He knew me, he knew what we were doing. There was a level of, you know, trust that started, I think. And we then said, what are the things that each of us are good at? And how do we how can we use this get to market? And for us then rolling it out means there are lots of advantages because Figure is offered by so many large non-bank IMBs already that the technology implementation, the trust that people have to say, what's going to happen to this loan? Do I understand the process that's involved?

24:15 We were able to overcome some of those issues pretty quickly. And so, you know, we launched the product in July. It was with some amount of fanfare because the name and the idea, you know, a lot of people immediately say this is something that's really cool, but to your first several questions, it's really hard to do. So, we started in retail, and we started testing and trying to, you know, there are questions like, how do the old, you know, how do older borrowers fill out, you know, are they going to be comfortable doing an entirely online process? Where do they have hang-ups? How do we, you know, there's every state has their own rules. You've got a lot of work to do. So, we just launched the wholesale version of this Oh. Over the last couple of weeks. I expect we're going to fund our first wholesale loan in the next couple of days. I expect that to ramp up really quickly. And we're working with, you know, almost half of the top 10 IMB or top 20 IMBs we're working on to try and implement and roll out the product. And so, some of those many of those are already clients of Figure's, but a few of them aren't, and they're actually people who have looked at the product and are companies that we've worked with that are really excited about this. And so, it takes time that and technology integration, figuring out for them how to sell this along with us. Is it the same thing as just writing people and saying, well, we have this new thing?

25:49 No, nobody knows what a HELOC for seniors is. How do you talk to them? It has other features that we haven't talked about that are advantages, but that they hadn't, you know, but they're not used to thinking about. For example, you can leave an available line of credit to be drawn. Most of the most non-bank HELOCs require you to draw the entire amount Yep. Or they you know, if you're a bank HELOC, there are prepayment penalties for paying off some of that loans. Or if it's a closed-end second, you're again drawing the whole thing. Our product doesn't require a full draw immediately, and it doesn't have prepayment penalties. So, there's lots of things that people have to learn, understanding the differences with our product versus other products in the market. And then trying to explain them to people. So, that rollout will, you know, will continue to grow and take on a momentum of its own. But the thing that's interesting is when you send out offers and opportunities, people really like the product. And the demographic, getting back to reverse, in many ways looks like people a large number of the applicants for this product actually could qualify for reverse. And a whole bunch of people who are rejected for this product are people who, you know, could take out a reverse mortgage, but didn't.

27:15 And so, it's up to us and it's up to our partners for the people who apply and don't get this. Right. We now have a relationship with those folks. They've said they want to borrow and have credit, and we have good products for them. And so, part of the goal of this is now that people have raised their hand and said, hey, I want this, unlike most forward lenders, credit unions, banks who never offer reverse mortgages ever for their customers, we will, and we will talk to people and sort of say, we think it's a different conversation when they've applied for a loan with us than somebody who hasn't. And we're saying the same things to our wholesale partners, which is you're going to get a lot of leads and a lot of people who are going to look and say, you know what, I didn't want a reverse mortgage, but actually, you know, now that we're having a conversation, we're sort of in a different place than before. And when you have a relationship with somebody, when they've applied for credit with you, it gives you the opportunity to have a more holistic and robust conversation. You've seen information, so you know what the value of their home is, you know what their FICO score is, you know what their income is. So, you can almost pre-qualify for people who fall out of the HELOC for seniors world, you can almost pre-qualify them for a reverse from what we have. And it becomes a real lead gen tool in a way because you now have different things to offer people, and it's a different conversation. And that's really that's a feature, not a bug. That's something that we've always thought about this product as doing as how can we offer more things so when we're having a conversation with the customers, you said, we're not at 31 flavors, maybe we have three or four, but one of them looks very different than what people are used to having.

29:11 And, you know, I'm I personally like peppermint stick. It's actually hard to find peppermint stick at very many ice cream places. 31, you know, Baskin-Robbins actually has peppermint stick ice cream. So, if we offer

29:23 My favorite. Yeah, but, you know, the critical thing is you have something that somebody thinks they're looking for. Yes. And if it's not available elsewhere, Yes. Then you're going to serve you're going to pull through that customer, and you're going to have a different relationship. And maybe I look and say, you know what, I like peppermint stick, but I was really in the mood for, you know, black cherry and chocolate cuz you know So, I walk in thinking peppermint stick, but then I'm like, "that's not really what I wanted." So, you know. Sounds like you spend a lot of time at Baskin-Robbins. I'm not I don't mean to bust you or anything, but I'm just saying. Well, I it's partly the gray hair. You and I are in the demographic in which when we grew up, that was the place to go for ice cream, and I will neither confirm nor deny I had friends who worked there, and that I might have shown up after the store closed, and they might have had some extra ice cream that, you know, got served up after the store closed. So, it's possible.

30:20 Yeah. I'm not saying I'm not saying one way or the other, either. I'm not going to I'm not going to ask you so you won't ask me. One of the Statute of limitations, I hope, is gone on that. On the history. One of the one of the buzzwords in the in the press release and in the package, and one of the words you use, blockchain, is one of those words that when it came out, it was really hot. A lot of training classes for real estate agents and originators. I don't think it's really hit us on what we do as much as it's technology that will empower or make more productive companies like yours. In your case, I don't think necessarily you're even doing the blockchain work. You're having your vendor, basically, do that for you, but you have to understand it so that you can make an assessment, is this an appropriate, you know, technology for our company to sell? So, talk a little bit about that decision for you, how you looked at blockchain and was able to implement it, and then I think maybe just spend a second talking to originators because, like you say, the customer the demographic of this product is older, less technology forward by definition. Talk a little bit about how an originator should explain the trade-off of the cost savings versus, perhaps, blockchain being different. All right. So, from a customer perspective, they could care less whether their mortgage is traded on blockchain or anybody anything else. What they care about is getting a mortgage that is the most attractive mortgage to them at the best rate possible.

31:47 We care about it because having that is an opportunity from that execution perspective helps us. And so, in the real estate world, you know, the opportunities for blockchain are enormous, but they go through county governments and state governments because that's where loans are recorded. And as long as loans are recorded in the traditional way, which is you have to file a record with the deeds office, it you know, you have to go to the county to figure it out. Maybe the county sells their data other people who publish it. Maybe in Texas they don't always do that. You know, it you know, when you file a lien, you don't see it right away. It takes a while. So, the opportunity when people first talked about blockchain as a technology, not, you know, separate from crypto, which is, you know, things that are traded on the blockchain, you know, the different kinds of tokens and other things, but for the technology in real estate, the opportunities are enormous, and there are a couple of company countries that have tried to use it. But for the most part, you have to go, you know, county by county, and there's I'm not an expert on this, but there's been pretty little progress in doing it. But you can imagine the idea that everybody can immediately look and see that this is this is who owns the property. These are the liens that are on the property, and it is available for everyone to see and record it instantly.

33:13 That, of course, would be a huge productivity innovation in the real estate market business. But it isn't that's attractive. In the mortgage business, and in actually in lending in general, that technology is just a way for people to transparently see, anybody who has access to the blockchain, to just see what the loan is and to see the characteristics of the loan. And so, it makes it easier for people to buy and sell individual loans, and it makes it easier for lenders to finance them, knowing that they have a secured lien, so to speak, because everybody sees that lien that the lien exists on the loan. And if that allows us to get a cheaper cost of financing, so one of our lenders has already said that loans that are coming through the blockchain, they're willing to give us more attractive financing on those loans than through other loans that we have through that same lenders' warehouse facilities. That's the kind of thing that allows us to get better terms, and if we can offer better terms to borrowers, the borrowers don't care about whether we how the heck we finance it. The borrower just cares about what the features of the loan are, the rates, etc. So, those are examples of things that'll be helpful. Our loans are not yet offered on the blockchain, but we haven't you know, we're still looking to get enough scale that we can tell people, you know, you can buy these in bulk cuz the people are No one's going on there to buy, you know, these are institutional buyers of these loans. No one's buying one or two or five or a hundred of them. They want to know that there's a consistent flow of those loans that they're going to be able to acquire over time. So, that's where we see the opportunity. And it, you know, it may be that we sell more stuff there.

35:00 It may be that we securitize those. Our we're owned by Ellington Financial. Ellington Financial is a large, you know, non-QM originator. They also originate closed end seconds. And they're involved in other parts of the space. It may be that we sell the loans to insurance companies or to, you know, private, you know, private debt on a flow basis. Having the blockchain available as an option where all of those people can look and see transactions provides additional opportunities and transparency. And the more transparency there is, the more we're able to benefit as originators and lenders to get better execution, which at the end of the day, that's what our borrowers really care about cuz that's what allows us to offer more attractive products to them and more attractive rates and terms. So, that's the ultimate goal that the borrowers have. Yeah, better execution, I think, just either means savings to the customer, savings to the originator, or savings to the company, or a piece of all three. But the more efficient you can be in the long run, the more effective you're going to be as a player in the business. And I think for anybody looking at this, it's an exciting beginning which I think it's I think it's going to take you longer than industry players think. I work in the world in private real estate where when we sell a property, we not only need the grant deed, but we need the wet certification copy of the court of LA County to record a document. Like, I can notarize online now and record documents online around the world, but I still need original wet stamp as if I couldn't steal a copy or a fake it and fool them. Stamp on the document I sent I'm pointing cuz we still work with 1960s rules in LA County. So, Chris, that's why you're the CEO. Good luck with that. I wish you the best.

36:53 Yeah. And that's one county out of, I think, 3,700 in the United States. So, good luck with all that. It's, you know, that in Orange County and San Francisco, you know, that actually those two counties are probably our largest two largest two counties to originate in. Obviously, high home values combined with, you know, a you know, a place that people like to be in retirement. You know, there are a few people that leave for taxes, but, you know, lots and lots of people stay, and, you know, their kids, etc. So, it's an important market for us. But, you know, I do I hope that the counties start to think about the ability, honestly, you know, like everything, some of those places are like, well, what would all those people do, and what would, you know, what would get done if we got rid of that ability to do it, to which I suspect you and I are not so sympathetic, but officials, you know, in government try to keep their, you know, want to keep kind of what they're doing. So, I'm really interested to see, you know, some state is going to really mandate going after this seriously at some point.

38:02 Yeah. And I'm hopeful they will. And some states at least allow, you know, e-closings and some of the other things. So, they're, you know, and Jenny is, you know, has been started to be supportive. So, there's more push to streamline this, but I think the greatest efficiencies are in what exactly you described, which is the ability to have real transparency in, you know, how we record and, you know, liens and see, you know, and see where changes take place and the credibility of that. So, I'll wrap up a little over time here, if you'll excuse me. One last question, though, cuz I've done 40 episodes. You're the first CEO of a significant company I've had a chance to talk to. The thesis I launched this podcast on was that as an industry, we should today be doing 10 times the reverse mortgage we are because of the market need that's being addressed, and we're held back by the bad reputation of the product, stemming from the '80s version of it, the '90s version of it, and our bad servicing generally today, not Longbridge specifically, but I'm just saying in general, we're not doing good enough job as an industry. And second, I think also not enough people coming into that. We have mortgage originators who I think grew up on, you know, declining interest rates and doing refinances, not building relationships and value. And with all the changes in AI and technology, you hit you use the word a few times, it gets down to trust with your customer, particularly older customers, particularly retirement customers who can't make it up. So, you know, I'm sure you have your own strategies as a company, but as an if you can step back a little bit and say as an industry, what do we need to do to address the market that's just sitting there waiting? You know you don't want to 10 times the industry at just at your company today you have to there's scaling issues and growing pains but as an industry what do we have to do in order to address what's obviously a market mismatch in terms of I think desire for the product and use for the product and the current delivery system. Right. By the way we'd take 10 times. I could I could do I could do I could do 10 times

40:04 The HELOC for seniors. Our company could literally do that. So there's technology I'm here to help. I'm going to put it on the internet. Do my best to promote it and wish you guys luck with it. Yeah, no look we appreciate it. By the way you built a really successful podcast as I think you know you know the numbers you have the number of listeners and the engagement is really successful so you should be very proud of that and I am happy to be your first CEO. I you know hope that I'm not the last not that I you know I wish everybody in our business success. I think we as a business you know the forward world there's only so many people buying homes there's only so many loans are going to get refinanced. So you got to compete with each other for this in the reverse world that's not where we are we're in a world where we all should want to grow the size of the pie because to the question you're asking you know our job should be to help each other figure out how to be successful. So I say that as a starting point but you know the I mean there's no magic bullet. Our company is growing rapidly. We will you know we should end the year up 40% from where we were before. All of that innovation has been in product. It's not that we're selling more HECM's and it's not that I don't like HECM's. I'm a big believer in HECM's. But we've had to build products to be successful. So for us a big part of this is trying to listen to what people say they want and to build products around it and streamline them. So we launched Platinum Peak which went from nothing in April to just about 2/3 of our proprietary loans and the proprietary loans themselves have more than doubled year-on-year. So product innovation is part of the answer and products that change the way people think.

41:55 And you know because people think they know a reverse mortgage. I used to think as I said you just I'll just explain to you what's going on and then but I don't think that's how it really works. So part of product innovation is really changing the people's perceptions. So I'll talk about I talked about HELOC for seniors. Platinum Peak the big thing is that it offers 15 to 25% more proceeds than you can get in a HECM. So people say they want higher proceeds. We gave them that. The third product we have I think to me is about how to change the conversation which is we call Platinum Reserve. Lots of people really worry about the idea that we as a lender want their home. We want to own the home. They don't understand that it is a more the word mortgage means you are borrowing and the LTVs are low lower than they're used to because you know we don't want to own the home. That is not our goal and we would lose money if we had to own every home. The whole point is that there has to be money left over for the heirs which means we get paid in full on most of our loans. Otherwise it would not be a very good business as a lender. Platinum Reserve is a product that allows people to borrow against a portion but not all of the home. So you can for example say I want to take 30% of my home and give it to my kids because I want to leave a legacy for my kids but I know I need to tap the home and I'm worried that if I borrow the whole thing if home prices go down you know if I live a really long time am I going to have something to give to my kids?

43:31 With Platinum Reserve 30% of the sale price of the home if you know if you continue to pay property tax and insurance and work you know work with us you will keep and give to your kids. It could go to paying for assisted living if you need that when you sell your home. Whatever it is you want to do and the thing about Platinum Reserve is that you can tell people no I don't want to own your home as a lender or you can say I have this product that makes it really clear that we don't own the home. We don't want to own the home and one of the things we've discovered is by starting with Platinum Reserve many people have actually want the reverse mortgage on the whole home but it changes the conversation by making it immediately clear not because I tell you I swear I don't want your home because I can't say that ultimately as a lender if you live long enough or home prices don't keep up eventually we may end up owning the home. So I can't tell somebody we won't own the home. But Platinum Reserve starts with the idea that there's a portion of the home that you're going to be able to keep and do whatever you want with. And so it changes the conversation and even if people eventually end up with a reverse mortgage or whether HELOC for seniors brings them in the door and a loan officer says well let's talk a little more about what you want. What are you going to be doing in 3 years? Oh I'm going to be retired at that point. Well you're going to have payments. Is that really going to be something do you want to make these payments for X number of years? Maybe somebody says look I'll come back to you in 3 years and we'll talk further but these the products open up discussions.

45:09 They open up opportunities for loan officers to listen to people to hear what they want and to meet their needs and by changing the kinds of conversations and not just starting with let me tell you about what it is but instead allow you to listen and to be able to serve the unique needs of borrowers it really changes the sales process and I'll tell you in our call center we have literally doubled productivity. Our loan officers are selling twice as many loans as they sold a year ago a year and a half ago per you know per loan officer. And so having changing the way the conversation happens and being able to have a more holistic conversation where you listen to what the borrower wants and you offer them something that makes sense sales is about listening more than it's about telling people things. And that's that idea that's really where we see the growth of the industry is by changing conversations not by educating people more or telling them we're you know if you just knew you know we're not going to be able to change the stigma of reverse mortgage you know the name right away. Again I'm just saying what is clear. We believe in it but you know we need to have a conversation so that the loan so that the borrower trust you the loan officer and the company and then they're willing to take what makes sense to them and by offering them a non-reverse mortgage option or an option where they can preserve some of their home it changes the conversation and the tone of the conversation in a way that allows you to move forward with more borrowers and that at the end of the day is what we're all trying to do and all of us who are in sales you know is to try and offer the very best thing for the customer we can.

47:06 So My first coach was Mike Ferry and he used to say selling isn't telling selling is asking questions and so if you're able to ask what do you want and they can tell you and you have multiple options to fit that but you can go deeper. What do you want? Why do you need that? How much do you need? When do you need it? And then you can offer those options and I think just like your analogy with ice cream you walk in wanting peppermint stick and occasionally you find the chocolate cherry is really what you want today. Offering proprietary products will hopefully help us expand this industry. I'm just so committed to I'm really excited so excited to have you on the call today Chris. I really appreciate your time. I know you got to be busy doing things with sales talking to real estate agents in California about on a podcast but I think hopefully together we can help offer this to more people. HELOC for seniors is the website Longbridge Financial is a company. Chris Mayer CEO Chris Mayer PhD CEO. I think he really shared with us his body of ideas as well as he showed us why he has that back background. Thank you so much for your time today Chris. I really appreciate meeting with you today and sharing not just the HELOC for seniors but I think just the general vision where you have with the products to hopefully help us expand the market to serve more of our customers. I really appreciate it. Great Bill thank you so much for having me. I really enjoyed the conversation. I'll sort of say I do lots of interviews and conversations. You're you know you're really you know knowledgeable and it was I really enjoyed the conversation. We're able to cover a lot of ground so you know I appreciate it very much. So thank you.

48:34 And please thank Trevor for me for setting this up. I really appreciate you getting your time together. Thank you so much. And for the rest of you this is the Reverse Mortgage Podcast. We usually have originators but today we really had one of the key players in the industry a CEO of one of the major players both wholesale and retail and hopefully this will help us learn how to be more effective in serving our customers ultimately which is the goal of doing more business is helping more customers. I'm Bill Gross this is Reverse Mortgage Podcast at Bill Gross Probate. If I can help any way please reach out. Put comments in. If you want to be interviewed for this put your name in. Let me know. As always make today your best day ever. Thanks so much.