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Why Affordable Housing Programs Miss the Mark · The Ground Game

• 0:03
  Speaker 1: Welcome to the ground game for mortgage professionals built for the fight.
• 0:08
  Speaker 1: Hosted by Bryan Lovell and Mark Milam.
• 0:13
  Speaker 1: Level of guys is talking about mortgage stuff.
• 0:18
  Speaker 1: So, anyways, you're you said this was a controversial uh idea.
• 0:23
  Speaker 1: Oh my gosh, we're just going to jump in equally like it's jumping right into my gripe list.
• 0:28
  Speaker: Um so affordable housing programs as they're structured with Fannie Mae and Freddie Mac, right?
• 0:34
  Speaker: Which is obviously that's where like 80% of all mortgages go, right there to agency Fannie Mae, Freddie Mac.
• 0:39
  Speaker: They have these affordable housing programs that are well-intentioned.
• 0:42
  Speaker: And I'm not trying to throw Fannie and Freddie or the FHFA under the bus.
• 0:45
  Speaker: If you're not familiar with the FHFA, Federal Housing Finance Agency, this is the overseer, right?
• 0:50
  Speaker: The regulator of Fannie Mae and Freddie Mac.
• 0:52
  Speaker: Fannie and Freddie, they have their own board, but it's the guy who heads it up, is the same guy who heads up FHFA.
• 0:59
  Speaker: So they have these programs.
• 1:01
  Speaker: A couple of uh Fannie's is called home ready, Freddie's is called home possible.
• 1:05
  Speaker: And then there's 100%.
• 1:07
  Speaker 1: So you're gonna get into AMI.
• 1:08
  Speaker: I'm gonna get right into it.
• 1:09
  Speaker 1: Okay.
• 1:10
  Speaker: So area median income is how you determine eligibility for these programs, in large part.
• 1:15
  Speaker: The 100% AMI, you also have to be a first-time home buyer, which by the way, doesn't mean it's the first time you've owned a home.
• 1:20
  Speaker 1: It just means at not in the last couple of years.
• 1:23
  Speaker 1: Not in the last three years.
• 1:23
  Speaker 1: That's right.
• 1:24
  Speaker 1: So, man, before you get into this, like I one of the things that's always made me sh shaken or shook, shake my head about this, is for the large part, I look at the AMI requirements to even qualify for these homes, and I'm like, these people can't qualify for a home, period.
• 1:42
  Speaker: Right.
• 1:42
  Speaker 1: Which I'm sure that's kind of where you're going.
• 1:44
  Speaker: For sure.
• 1:45
  Speaker: If you look uh, you know, from San Jose, which is one of the most expensive areas, metropolitan areas in the country, to Pittsburgh, which is one of the most affordable metropolitan areas in the country, anywhere in there, the the median home price compared to the median income, we're still above what experts think we should be spending.
• 2:03
  Speaker 1: Okay.
• 2:04
  Speaker: And it's absurd in San Jose.
• 2:06
  Speaker: It's not absurd in Pittsburgh, but it's certainly not affordable.
• 2:10
  Speaker: And my problem with the current structure, it's not its intention.
• 2:15
  Speaker: The intention's good.
• 2:16
  Speaker: The problem is in the execution.
• 2:18
  Speaker: And the problem here, when you when you really start digging into this, it's because they don't do it every day.
• 2:24
  Speaker: They're not in there every day.
• 2:26
  Speaker: And so how would they know that this program is missing the mark?
• 2:30
  Speaker 1: Sure.
• 2:30
  Speaker: And the problem that I see is all area median income does is it tells you how much do you make compared to your neighbors?
• 2:36
  Speaker: Right.
• 2:37
  Speaker: Who cares?
• 2:38
  Speaker: I could care less how much I make next to my neighbor.
• 2:41
  Speaker 1: Yeah.
• 2:42
  Speaker: Or that he makes more than me or less than me or whatever.
• 2:44
  Speaker: It's just a ranking of median and it's just a ranking of income.
• 2:48
  Speaker: Let me back up.
• 2:49
  Speaker: What do these programs even do?
• 2:51
  Speaker: So they might provide you with a lower interest rate.
• 2:54
  Speaker: It's not substantially lower unless you have a kind of a low credit score.
• 2:58
  Speaker: But maybe a quarter, maybe three eighths, maybe a half point in rate.
• 3:02
  Speaker: And if you're putting down less than 20%, you might get cheaper mortgage insurance.
• 3:05
  Speaker: That's the real benefit of these programs.
• 3:07
  Speaker: So, all right, so every eighth counts, we understand.
• 3:11
  Speaker: Lower interest rate means lower monthly payment.
• 3:13
  Speaker: We'll take every bit of that we can get.
• 3:15
  Speaker: But we're qualifying these people based upon how much they earn compared to their neighbors.
• 3:19
  Speaker: We've never once factored into the calculus what does it actually cost to buy an average size home there?
• 3:26
  Speaker 1: Yeah.
• 3:26
  Speaker: That's the missing ingredient.
• 3:28
  Speaker: And so what I would suggest is we bake into it based on MSA, metropolitan statistical area, what is the median price of a home in that area?
• 3:38
  Speaker: Now, here in Atlanta, if you pulled out the full MSA, which is a big area, we're talking like 13 counties.
• 3:44
  Speaker: If you pull in it here in Atlanta, that's about $380,000, is a median priced home, right?
• 3:49
  Speaker: And so what's the income needed to get a housing ratio of around 28%?
• 3:56
  Speaker: Okay.
• 3:56
  Speaker: 28 to 30%.
• 3:57
  Speaker: Because you're gonna have other debts, right?
• 3:59
  Speaker: You're gonna have other debts in there, student loan, auto loan, credit card, whatever it is that you've got.
• 4:03
  Speaker: So what's the how what's the income needed?
• 4:05
  Speaker: Well, it's not 100% of AMI.
• 4:08
  Speaker: That's that's not what it is.
• 4:09
  Speaker: You need way more than that.
• 4:11
  Speaker: And it's closer to about 150% AMI.
• 4:14
  Speaker: And so my my recommendation, my thought is these programs just need some adjustment.
• 4:20
  Speaker: They need a metric to bring in what it costs to buy an average price home in that MSA, and so more people can qualify because you've seen it and I've seen it.
• 4:30
  Speaker: If you come in to Tampa or wherever, Fort Myers or Orlando or Atlanta or any even a more rural area like Valdasta, and you're making 60 grand a year, you're making 70 grand a year, the odds of you being able to afford a decent home on your own are you better not have any other debt.
• 4:51
  Speaker: Yeah.
• 4:51
  Speaker: And you're gonna be strapped with with what you can afford.
• 4:55
  Speaker 1: Yeah.
• 4:55
  Speaker 1: So you what you're suggesting is hey, let's take a look at what it actually costs to live there or to buy a home.
• 5:01
  Speaker 1: To buy a home.
• 5:02
  Speaker 1: Right.
• 5:02
  Speaker 1: And let's use a formula to determine you're you're saying housing ratio.
• 5:06
  Speaker 1: So in mortgage terms, that's the front-end ratio to determine what the AMI is, and those folks would be the benefactor of the lower mortgage insurance, no, no L LPAs and the lower rates.
• 5:18
  Speaker: It's called price to income ratio.
• 5:19
  Speaker: Yeah, that's it.
• 5:20
  Speaker: And so you basically say, all right, well, in this particular area, if you want to afford a median priced home, Metro Atlanta is $380,000, then and you need your front ratio, your housing ratio to be a 28, whatever, that threshold needs to be about $143,000 is really what it needs to be.
• 5:36
  Speaker: Okay.
• 5:36
  Speaker: And right now in Metro Atlanta, it just changed.
• 5:38
  Speaker: It's at $117.
• 5:39
  Speaker: Okay.
• 5:40
  Speaker: So we're way off.
• 5:41
  Speaker: Cutting a pretty substantial number of people out that could benefit from these programs.
• 5:46
  Speaker: I don't know what a counterargument to that would be.
• 5:49
  Speaker: Maybe the counter-argument is, well, the loan level price adjustments are how Fannie and Freddie make money, or one of the ways they make money.
• 5:55
  Speaker: I would argue you're gonna make it up on volume, right?
• 5:58
  Speaker: So yeah, you you you might make less per deal, but you're gonna close more deals.
• 6:03
  Speaker: And hey, guess what?
• 6:05
  Speaker: That's what we've all had to do.
• 6:07
  Speaker: Like, yes, like welcome to 2026.
• 6:11
  Speaker: We all have had to make less on more if we want to survive in this industry.
• 6:17
  Speaker: Yes.
• 6:17
  Speaker: I think the GSEs need to play along with that, yeah.
• 6:20
  Speaker: And they need to play into that.
• 6:22
  Speaker: If the mission of Fanny and Freddie is to provide home ownership affordability in all markets and all, you know, times, yeah, then it's time for them to adjust this program.
• 6:34
  Speaker 1: Yeah.
• 6:34
  Speaker 1: Yeah.
• 6:35
  Speaker 1: Yeah.
• 6:35
  Speaker 1: I I mean it it doesn't seem like that's I mean, I think that's a pretty outside of the box.
• 6:40
  Speaker 1: I love the way you're thinking on that, right?
• 6:41
  Speaker 1: Because at the end of the day, you're just looking for ways to how can we help put more people in homes, right?
• 6:47
  Speaker 1: Right, and kind of end the grind a little bit of of where we're at with housing.
• 6:51
  Speaker 1: But the big thing is the affordability problem, right?
• 6:54
  Speaker 1: So home prices are going up, wages are somewhat flat to maybe going up a little bit, but the two aren't going up at the same rate or the same pace.
• 7:03
  Speaker: Nor have they since the pandemic, right?
• 7:05
  Speaker: Or even pre-pandemic.
• 7:06
  Speaker 1: Okay.
• 7:07
  Speaker: I didn't really appreciate it when it happened.
• 7:09
  Speaker: But I'll give you the seeds for the imbalance that we experienced today between home prices and wages.
• 7:14
  Speaker: And it was something called Operation Twist.
• 7:16
  Speaker: Operation Twist, uh, the Fed had already started buying mortgage-backed securities and treasuries.
• 7:20
  Speaker: They'd already started buying them, but they were really buying more on the short end of the yield curve when it came to treasuries.
• 7:25
  Speaker: They were buying a lot of short-term notes, right?
• 7:27
  Speaker: Okay.
• 7:28
  Speaker: And and and that's what they were doing to sort of support the market.
• 7:31
  Speaker: And what the Fed decided with Operation Twist, this is dating all the way back to 2011.
• 7:36
  Speaker: They said we're gonna sell on the short end and we're gonna buy on the long end.
• 7:39
  Speaker: Okay.
• 7:40
  Speaker: Why are we gonna buy on the long end of the yield curve?
• 7:42
  Speaker: Drive down long-term rates, right?
• 7:45
  Speaker: Drive down long long-term rates to spur to create uh the cheaper borrowing cost.
• 7:50
  Speaker: And guess what?
• 7:52
  Speaker: It worked.
• 7:53
  Speaker: It worked in spades.
• 7:55
  Speaker 1: Yeah, so that was part of quantitative quantitative easing.
• 7:58
  Speaker: Yep, that was part of one of the ways of QE.
• 8:00
  Speaker: And it really it completely worked.
• 8:02
  Speaker: What they wanted to do, they did it.
• 8:04
  Speaker: No doubt.
• 8:05
  Speaker: All right.
• 8:05
  Speaker: And if you could say that they hit the bullseye with that, but they set off this price increase trajectory that outpaced wages two to one.
• 8:14
  Speaker: And it lasted for a decade.
• 8:15
  Speaker 1: You know, Mark, what's interesting is like you look back in that season, I would go back to like all the way to 2008, 2011, maybe even you know, 15 or 16.
• 8:23
  Speaker 1: I feel like we were invested in making corrections to the market that would help consumers and help homeowners.
• 8:31
  Speaker 1: Yep.
• 8:31
  Speaker 1: But I mean, we haven't seen that type of aggressive behavior in a long time.
• 8:37
  Speaker: Yeah.
• 8:37
  Speaker 1: What why do you think that is?
• 8:38
  Speaker: I think they realize they created as many problems as they solved.
• 8:41
  Speaker 1: As they solved, okay.
• 8:42
  Speaker 1: And it listen, I think it's better to just do nothing.
• 8:45
  Speaker: I think they don't know what to do exactly.
• 8:47
  Speaker: That's why you see some crazy freaking ideas.
• 8:49
  Speaker: And listen, I'm gonna be a little controversial and tell you they're crazy.
• 8:52
  Speaker: Portable mortgages, or like you could do that, even if you could do that now.
• 8:57
  Speaker: Who wants to take their mortgage with them now?
• 8:59
  Speaker: Yes.
• 8:59
  Speaker: Like everybody wants to go back and take the one that they got in 2020.
• 9:02
  Speaker 1: They got it in 2021, yeah.
• 9:04
  Speaker: Or 50-year amortization where you're paying even more interest now for the same home, just to let where you're payment a couple hundred bucks.
• 9:10
  Speaker 1: Well, I think we've seen that doesn't work in Canada.
• 9:12
  Speaker 1: Yeah.
• 9:12
  Speaker 1: Right?
• 9:12
  Speaker: So I I think you can look at all this and go, they know that what they did created as many problems as it solved.
• 9:21
  Speaker: And I'm not here to throw Bernanke under the bus or or or even those that succeeded at that dude had an impossible job.
• 9:27
  Speaker 1: He had a difficult job.
• 9:28
  Speaker: And it did keep us out of a Great Depression, what they did.
• 9:32
  Speaker: Not to be overly dramatic, but they didn't do it without consequence.
• 9:36
  Speaker: And if you're listening to this, think about that for a second.
• 9:38
  Speaker: The only real way out of this, it's not lower rates because we all know what's going to happen with really low rates, right?
• 9:44
  Speaker: We're gonna be right back in the same stew that we got that got us here.
• 9:46
  Speaker: The only real way out of this is for wages to catch up to home prices.
• 9:51
  Speaker: What does that mean?
• 9:52
  Speaker: We all know how fast wages rise, but home prices have to plateau.
• 9:57
  Speaker: And not for this year and not for next year, but for the next five years and the next seven years or the next 10 years while wages catch up.
• 10:06
  Speaker 1: So you made me think of two things.
• 10:07
  Speaker 1: I'm gonna I'm gonna pivot just a little bit, right?
• 10:09
  Speaker 1: The the first one is I I guess the argument I could make to that is if I buy now, let's say I'm even younger, right?
• 10:17
  Speaker 1: Like you and I are in our 50s.
• 10:19
  Speaker: You mean you're 49?
• 10:21
  Speaker 1: Well, I'm 49, yes.
• 10:22
  Speaker 1: Let's let's let's hold on to that for as long as we can, by the way.
• 10:24
  Speaker 1: Right, right, right.
• 10:25
  Speaker 1: All right.
• 10:25
  Speaker 1: So um, you're in your 50s, I'm in my 40s.
• 10:28
  Speaker 1: And if if I were to buy a home when I was younger in my 20s or in my 30s, the argument that I could make is that the wages I earned when I was 30 are certainly gonna be less than when I'm 40.
• 10:40
  Speaker 1: Yep.
• 10:41
  Speaker 1: But my mortgage payment for the most part stayed the same without you know fluctuations in insurance or sure or taxes or whatever.
• 10:48
  Speaker 1: Sure.
• 10:48
  Speaker 1: So I would I would grow into that, which maybe that makes the argument to bring back maybe interest only.
• 10:54
  Speaker 1: Uh-huh.
• 10:54
  Speaker 1: What what are your thoughts on on that?
• 10:56
  Speaker 1: Because I know you're looking for a solve for today, but for the long term, your wages could eventually catch up.
• 11:05
  Speaker: They could.
• 11:06
  Speaker: I think it's really hard to look at almost anything in your life and go, let me project out the next 20 years, right?
• 11:13
  Speaker: I think I think the average person who's 25, 27, 32 looks at the prospect of buying a home and says, it just doesn't feel good.
• 11:25
  Speaker: Right.
• 11:25
  Speaker: And and listen, whether we like it or not, we buy cars based on emotion.
• 11:29
  Speaker: We date based on emotion, we invest based on emotion, and we buy homes based on emotion.
• 11:35
  Speaker: And if it doesn't feel good, you might be able to make the most compelling financial argument in the world.
• 11:40
  Speaker: But when someone goes home and they put their pit their head on the pillow at night, if they don't feel good about the decision, they're not going to do it.
• 11:47
  Speaker: Yeah.
• 11:47
  Speaker: And I think right now that average 25, 27, 32-year-old looks at it and goes, doesn't feel good, man.
• 11:53
  Speaker: It doesn't, I I can look at a million other things I would rather do right now with my money.
• 11:59
  Speaker: And I don't exactly know where this whole thing is going.
• 12:01
  Speaker 1: Is going.
• 12:02
  Speaker 1: Yeah.
• 12:02
  Speaker 1: So I, you know, the emotion of when I bought that Fannie Mae stock thinking that it was going to come out of conservatorship, right?
• 12:10
  Speaker 1: But that it and it hasn't.
• 12:11
  Speaker 1: I know.
• 12:11
  Speaker: You're welcome for that advice.
• 12:12
  Speaker: Thank you, by the way.
• 12:14
  Speaker 1: Uh that didn't play out the way I hoped.
• 12:17
  Speaker: For a little bit a lot of my stock conveyed.
• 12:20
  Speaker 1: For a little bit that played out, and then I was like, uh-oh.
• 12:22
  Speaker 1: That that didn't work so well.
• 12:23
  Speaker 1: All right.
• 12:24
  Speaker 1: So here's my next question, and I'll shift this a little bit.
• 12:26
  Speaker 1: Let's talk about from an origination standpoint, right?
• 12:29
  Speaker 1: Is you're you're still in production every day.
• 12:31
  Speaker 1: Man, talk to me about the conversations your borrowers are having with you based on their feeling about that.
• 12:38
  Speaker: So some of this is getting really laser focused on the conversation.
• 12:41
  Speaker: So I used to do this thing where I would uh I would try to like tell them all of the data, right?
• 12:47
  Speaker: Everything.
• 12:48
  Speaker: And I've really tried to pause on that for a second and put a pin in that and ask them, hey, what is it about this process that brings you anxiety?
• 12:56
  Speaker: Okay.
• 12:56
  Speaker 1: What's keeping you up at night?
• 12:57
  Speaker: Yeah, what's keeping you up at night?
• 12:58
  Speaker: Okay.
• 12:59
  Speaker: And it might even, it might not have anything to do with the financing.
• 13:01
  Speaker: It might just be, hey, I don't know if the this neighborhood is right or this home is right, or maybe it's, you know, we have a child with special needs, or we're thinking about having kids, or I'm not sure how sustainable my job is, uh, whatever it is, you know?
• 13:13
  Speaker: And then I can get right into those particular, you know, craft those solutions uh in a little bit more of a boutique hand-holding fashion.
• 13:21
  Speaker: I was not really good at that early in my career.
• 13:24
  Speaker: I was maybe trying to show them how much I knew or cover up what I didn't know.
• 13:28
  Speaker 1: You were trying to show up as a professional, yeah, right?
• 13:30
  Speaker 1: Like, hey, listen, I'm the guy that's gonna have the answers that you're looking for.
• 13:33
  Speaker 1: Yeah, I think now your approach is more let me just get to the point faster.
• 13:37
  Speaker 1: Right, right.
• 13:38
  Speaker 1: Right.
• 13:38
  Speaker 1: And what is keeping you up at night?
• 13:40
  Speaker 1: When you think about this home buying process, whether you're at the stages of shopping for a home or trying to decide what your financial outlook looks on that, what are you worried about right now?
• 13:51
  Speaker 1: Let's get to that point and then you're working to solve for that.
• 13:54
  Speaker: Yeah.
• 13:54
  Speaker: Yeah.
• 13:55
  Speaker: I think, for instance, um, non-QM is such a great product, right?
• 13:59
  Speaker: I've I've been an agency guy my whole life.
• 14:00
  Speaker: I've done so much more Fanny Freddy.
• 14:02
  Speaker: I never got into AltA, I never got into Subprime.
• 14:04
  Speaker: I know there are a lot of people who made hey doing that.
• 14:06
  Speaker: I didn't do that, but I do embrace non-QM.
• 14:10
  Speaker: And it's not just for the DSCR bank statement stuff.
• 14:13
  Speaker: That's all got its place.
• 14:15
  Speaker: But non-QM that lives on the fringes that misses agency by just a hair.
• 14:21
  Speaker: Yeah.
• 14:22
  Speaker: Like um one year's tax return instead of two.
• 14:25
  Speaker: Like, there's a ton of great non-QM investors out there that have streamlined products where you can go off one year's tax return instead of two.
• 14:31
  Speaker: And if you're self-employed and two years ago sucked and this year's been great, well, now we can now we can tailor a solution for you.
• 14:38
  Speaker 1: Just miss stuff, right?
• 14:39
  Speaker 1: So like I think it's most people look at non-QM as DSCR, bank statement loans, things like that.
• 14:45
  Speaker 1: But there's a lot of great products that are just just agency rights.
• 14:48
  Speaker 1: Right outside.
• 14:49
  Speaker: Yeah, right outside.
• 14:50
  Speaker: The the disregarding a departure residence monthly payment.
• 14:54
  Speaker: If you can show you intend to sell it and you got 20% equity with an exterior-only appraisal, that's a huge game changer, right?
• 15:00
  Speaker: Yeah, that that that makes perfect sense.
• 15:02
  Speaker: Um, so I I do find it to be very advantageous.
• 15:06
  Speaker: And when you get to that, uh, you know, you ask those conversations about, hey, what's keeping you up at night?
• 15:11
  Speaker: The self-employed person says, Man, this past year was really great for me, but uh, you know, the year before that, I was building this business and I didn't have, you know, I don't have five years in this.
• 15:22
  Speaker: I can't go Freddie Mac or Fannie Mae.
• 15:24
  Speaker 1: Yeah.
• 15:24
  Speaker: Uh, you know, I don't want to look at 2024, but 2025 look is beautiful.
• 15:29
  Speaker 1: Yeah.
• 15:29
  Speaker: That's what's scaring me.
• 15:30
  Speaker: I don't think I can qualify.
• 15:32
  Speaker: And then now we can now we come with a solution.
• 15:34
  Speaker 1: Yeah.
• 15:34
  Speaker 1: Yeah.
• 15:34
  Speaker 1: I I love the way you frame that because I just, as you were talking, and what it made me think of is in your earlier years, I look at it as what you were trying to solve for is probably what you really need to be talking to your referral partners about.
• 15:47
  Speaker 1: Right.
• 15:47
  Speaker 1: Meaning to them, you want to show your expertise, your knowledge that, hey, I'm going to direct the people that you've entrusted me with in the right way.
• 15:54
  Speaker 1: Sure.
• 15:55
  Speaker 1: But when you get the consumer in front of you, now it needs to be more about instead of all of this plethora of knowledge that you have, how do I help you in your individual situation?
• 16:05
  Speaker 1: Let's get to that conversation faster so I can help frame opportunities for you, right?
• 16:10
  Speaker 1: Because I I look at our role as like we help people create quite possibly the largest debt of their whole life.
• 16:15
  Speaker 1: Like I know you don't take that lightly, I don't take that lightly.
• 16:19
  Speaker 1: Right.
• 16:19
  Speaker 1: And you're just getting to that a whole lot faster.
• 16:21
  Speaker 1: Right.
• 16:22
  Speaker: Yeah, that's definitely the goal.
• 16:23
  Speaker 1: Yeah.
• 16:23
  Speaker: There's good debt, there's bad debt.
• 16:25
  Speaker: This is good debt, right?
• 16:26
  Speaker: It's tax deductible, relatively low interest rate, stable debt, but it still needs to be structured accordingly.
• 16:31
  Speaker: And you still need to get people the most bang for their buck in their particular situation.
• 16:36
  Speaker: And that only comes by asking questions.
• 16:38
  Speaker 1: Yeah.
• 16:38
  Speaker 1: So as you're going back to that question, as you're having these conversations with consumers right now, what is keeping them up at night?
• 16:45
  Speaker: Um, so you know, there's a lot of play on this next phrase I'm going to tell you, but it's so true.
• 16:50
  Speaker: The the K-shaped economy, right?
• 16:52
  Speaker: The haves and the have nots.
• 16:53
  Speaker: And never before in this country have do I think that we have seen the level of haves and the level of have nots.
• 16:59
  Speaker: And if you've been doing this for a while and you've been successful at it, let me give you, let me clue you in.
• 17:04
  Speaker: You're in the haves.
• 17:05
  Speaker: Yes.
• 17:05
  Speaker: You know, you're in the halves.
• 17:06
  Speaker: If you own a home right now and your interest rate is below 5%, you're in the haves.
• 17:11
  Speaker: You know, you may not feel like it, but you're in the haves compared to people who don't have that advantage.
• 17:17
  Speaker: Yes.
• 17:17
  Speaker: And that's what I hear more often than not.
• 17:19
  Speaker: And this is the great paradox of the United States right now.
• 17:23
  Speaker: We have a stock market that's setting records month after month after month, right?
• 17:27
  Speaker: We we have more IPOs on the horizon that are gonna that are gonna propel the stock market to all-time highs.
• 17:32
  Speaker: Consumer confidence, we're at an all-time low.
• 17:35
  Speaker: And you've heard me talk about this, but I'm gonna talk about it again.
• 17:38
  Speaker: Consumer confidence, the University of Michigan consumer confidence is an 80-year index.
• 17:42
  Speaker: It's been around for 80 years, and it just measures sentiment.
• 17:45
  Speaker: That's it.
• 17:45
  Speaker: All we're all we're measuring is how do you feel?
• 17:48
  Speaker: How do you feel, right?
• 17:49
  Speaker: And we measure it every single month.
• 17:52
  Speaker: And for 80 years we've been measuring this.
• 17:54
  Speaker: For 80 through the, you know, the the uh going back to the Korean War, the Vietnam War, uh, we go to the Gulf Wars, through the oil crisis that that we lived through that that our parents all major events, major events, interest rates 18%.
• 18:09
  Speaker: Consumer confidence was getting reported then, all the way through the pandemic or the great recession that we live through.
• 18:17
  Speaker: We have been measuring it.
• 18:18
  Speaker: It has never been lower than it is right now.
• 18:22
  Speaker 1: That's crazy.
• 18:22
  Speaker: It's never been lower than it is right now.
• 18:24
  Speaker: At the same time, the stock market is setting record after record after record.
• 18:29
  Speaker: We have uh an econom an economy built on the haves and the have nots.
• 18:33
  Speaker: And when I talk to consumers, even those that are in the have category, I think they recognize it too.
• 18:41
  Speaker: And I think that A, they're grateful to be in that category, sure, but they're scared at the disparity between them and others.
• 18:48
  Speaker: And then if you talk to the people in the other category, holy smokes, yeah, they're just trying to figure out month-to-month finances.
• 18:53
  Speaker: Yes, yeah.
• 18:54
  Speaker: Yeah, yeah, they're and they're dipping into their savings.
• 18:56
  Speaker 1: Yeah, they're living paycheck to paycheck and trying to figure out how to get it done.
• 18:59
  Speaker 1: Yeah, so you're you're almost saying like I think we've people have been talking about it for years, but there's almost in America no more middle class.
• 19:06
  Speaker 1: Right.
• 19:06
  Speaker 1: Right.
• 19:06
  Speaker 1: Exactly.
• 19:07
  Speaker 1: You're yeah.
• 19:08
  Speaker: And I think what we're talking about on this podcast when we start talking about practical solutions that don't involve the Federal Reserve cutting interest rates or some magical new thing happening, like a 50-year mortgage.
• 19:19
  Speaker: What we're trying to do is to try to prevent housing from becoming something that's only for the wealthy.
• 19:24
  Speaker 1: Yeah.
• 19:24
  Speaker: Right.
• 19:24
  Speaker: That's all that's all.
• 19:25
  Speaker: It's right.
• 19:27
  Speaker: That's exactly right.
• 19:29
  Speaker: So you shouldn't have to be in the top 1% to be able to afford a home.
• 19:33
  Speaker 1: Yeah.
• 19:33
  Speaker 1: So you talked about the solve.
• 19:34
  Speaker 1: We're we started this conversation about AMI, right?
• 19:37
  Speaker 1: Yeah.
• 19:37
  Speaker 1: And you switched it to what was the term you used?
• 19:39
  Speaker 1: Um price to income ratio.
• 19:41
  Speaker 1: Price to income ratio.
• 19:42
  Speaker 1: How does that get done?
• 19:45
  Speaker: Uh, you know, it's really simple.
• 19:47
  Speaker: It's it's the GSEs.
• 19:48
  Speaker: It's Fannie and Freddie.
• 19:49
  Speaker: Okay.
• 19:50
  Speaker: And it's just they have the program already.
• 19:52
  Speaker: The program exists, it's a good program.
• 19:54
  Speaker: I'm not here to to you know, crap all over Fanny and Freddie.
• 19:57
  Speaker: But the spirit of these agencies is incredibly noble, right?
• 20:01
  Speaker: And and very well-intentioned and vital, vital for uh the United States.
• 20:07
  Speaker: But the programs that they're offering, or this particular program that they're offering, the Home Ready, Home Possible, and then the 100% AMI, they've lost their way.
• 20:16
  Speaker: And through no fault of their own, they just haven't understood what has happened to the disparity between wages and counseling.
• 20:24
  Speaker 1: And I mean, I think some of that, Mark, I feel like maybe not the right people don't have the seat, a seat at the table.
• 20:31
  Speaker 1: Um, I think, you know, I know you you run in some circles with some other executives at mortgage companies, and I get a little bit of the opportunity to do the same.
• 20:38
  Speaker 1: And and I sit with them with sometimes some of these folks from MBA or FHA or FH HFHA.
• 20:46
  Speaker 1: And um the conversation is with people who aren't on the street every day.
• 20:51
  Speaker: Yeah.
• 20:52
  Speaker 1: Right.
• 20:52
  Speaker 1: I think the unique thing that you bring to this equation is you're leading a company while also leading it primarily in sales.
• 20:59
  Speaker 1: Right.
• 20:59
  Speaker 1: Right.
• 21:00
  Speaker 1: As the top or the top two producers in the company.
• 21:03
  Speaker: 50 to 60% of my job is sales, and the other 40% is the the leadership.
• 21:08
  Speaker 1: And it's just a different conversation.
• 21:09
  Speaker 1: I'll tell you like for me, coming um to be able to get to work alongside you is opened my eyes to that in a huge way.
• 21:17
  Speaker 1: Right.
• 21:17
  Speaker 1: Because, you know, for me, I'm not on the street as an originator every day.
• 21:21
  Speaker 1: I'm serving originators who are are on the grind every day on that, but you're actually in it.
• 21:26
  Speaker 1: And I think that's where a lot of these ideas come from.
• 21:29
  Speaker 1: And we need to get those ideas in front of the right folks.
• 21:32
  Speaker 1: And I'm not, I'm not throwing shade at any of those other leaders at other companies who have those same platforms to do it.
• 21:39
  Speaker 1: Right.
• 21:39
  Speaker 1: They're just not doing it in the same way that you are.
• 21:43
  Speaker: My uh my wife and I, so my wife is uh originator too.
• 21:46
  Speaker: She works uh for us and a great originator in her own right.
• 21:49
  Speaker: She is, yeah.
• 21:50
  Speaker: Um we are not cooks.
• 21:53
  Speaker: Like, boy, she and I are terrible.
• 21:55
  Speaker 1: Like, I don't we Oh, so when it's like what's for dinner, is it Uber Eats or where are we going?
• 21:58
  Speaker: Oh my god, it's almost always where are we going?
• 22:00
  Speaker: And we both, you know, you come home from your day and you're just you're tapped mentally and emotionally.
• 22:04
  Speaker: And the last thing you've you know I we feel like do doing is cooking.
• 22:07
  Speaker: I know a lot of people get a lot out of that, but but we don't.
• 22:10
  Speaker: And and so that we usually wind up, you know, we have this beautiful kitchen that we never use.
• 22:15
  Speaker: You know, people joke about it.
• 22:17
  Speaker: It's like a museum piece in there, you know.
• 22:18
  Speaker: It is beautiful.
• 22:20
  Speaker: They should frame it.
• 22:21
  Speaker: Yeah, it's like a pristine oven that no one's ever cooked in.
• 22:24
  Speaker: You're never gonna get good at cooking when you don't cook.
• 22:27
  Speaker: Yes.
• 22:28
  Speaker: Right?
• 22:28
  Speaker: We're never gonna, I can't read enough books, I can't follow, you know, have enough recipes given to me.
• 22:32
  Speaker: You're never gonna get good at at cooking good food that tastes good when you don't ever do it.
• 22:38
  Speaker: And this is the problem with a lot of people that are in a position to solve these problems.
• 22:42
  Speaker: They don't do it every day.
• 22:43
  Speaker: Yes, they're not faced with talking to those clients and having those hard conversations and trying to structure these deals.
• 22:49
  Speaker: So the odds of them, it's not their fault, right?
• 22:52
  Speaker: I'm not blaming them.
• 22:53
  Speaker: I'm sure they have great intentions.
• 22:55
  Speaker: But you're never gonna be a good chef if you don't cook.
• 22:58
  Speaker: And that's the the issue that I have right now with the people that are in charge of housing.
• 23:02
  Speaker: And I think we need a voice, and I would love to be that voice candidly, yeah, to sit at that table and say, I think I have an idea, guys.
• 23:11
  Speaker 1: Yeah, and let's walk through it.
• 23:12
  Speaker 1: Yeah.
• 23:12
  Speaker 1: Hey, and like you said, first episode we talked about, we followed up today.
• 23:16
  Speaker 1: Yeah, we're just trying to have some conversations and everything starts with a conversation.
• 23:20
  Speaker: And I'm happy to wear this bowling shirt.
• 23:22
  Speaker: Yeah.
• 23:22
  Speaker: I go agree with them.
• 23:23
  Speaker 1: All right, Buster.
• 23:24
  Speaker 1: Do you know that you know what this is, right?
• 23:25
  Speaker 1: I have no idea.
• 23:27
  Speaker: So everyone's stripper name, right?
• 23:29
  Speaker: Okay is their first pet in the street they grew up on.
• 23:32
  Speaker 1: You grew up on Crab Apple Street.
• 23:34
  Speaker: I grew up on Crab Apple, and my first dog was Buster, so I am Buster Crab Apple as my stripper name, which I think is a pretty fantastic stripper name.
• 23:43
  Speaker 1: I am Princess Parkside.
• 23:44
  Speaker 1: Just call me double P.
• 23:49
  Speaker: Is there any way, Austin, we can just put this episode in the in the can?