What does strong leadership look like during a volatile regulatory environment and political pressure? In this HousingWire exclusive, the CEO of Silk Title Co. Marc Trachtenberg, joins HousingWire President Diego Sanchez to talk through what the industry needs to know if the GSE’s exit conservatorship. This discussion separates politics from business and focuses on how lenders and servicers can adapt to a potential future where Wall Street is a stakeholder in America’s mortgage backbone.
Marc stresses the importance of preparation over prediction — and explains how organizations can adjust their operations to stay ahead. With sharp insight into both risk and opportunity, he offers a roadmap for navigating structural change with clarity, objectivity and purpose.
Marc stresses the importance of preparation over prediction — and explains how organizations can adjust their operations to stay ahead. With sharp insight into both risk and opportunity, he offers a roadmap for navigating structural change with clarity, objectivity and purpose.
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NewsTranscript
00:00Live from Colorado Springs, I'm Diego Sanchez, president of Housing Wire, and I have a very
00:13special guest today, Mark Trachtenberg, CEO of Silk Title. Mark, thank you so much for joining
00:19me. Thanks for having me, Diego. So what is your background and how did you end up owning a title
00:26company? My background spent 10 years in mortgage lending. About seven of them were those good years
00:32from 2002 to 2008. And that led into me opening my own mortgage company and failed miserably.
00:40Great recession. Yeah. 2008, 2010 was horrific. I was asked to come into the title industry.
00:47I started at a company called Linear. Linear sold to Solidify. And then I had an opportunity to go
00:52into Silk as a partner. I went into Silk as a partner, realized that the operation needed a
00:57whole overhaul. And that's when I realized, hey, we should stop looking at this as title. We should
01:01start looking at this as more of a tech company with a workflow and business process. And that's
01:06when the aha moment came on to me and said, okay, if we're going to do this and scale this and be
01:10ahead of everything, we had to change the mindset of what title was. And how are you changing that
01:16mindset? I think it's more of a looking at it of a manufacturing process. And how do you speed up
01:21the manufacturing process? How do you lower the cost of the manufacturing process? To me,
01:25it was more, we also looked at the experience. It's such a bad experience in the mortgage industry
01:30still today. And you look at it. And that was our goal is to figure out the better experience. And
01:35that led us into all these other things. We said, okay, how do we get to the borrower having the best
01:40experience? How do we get to our client who happened to be the processing LOs and mortgage company
01:45and started looking at, okay, when you start reverse engineering, we actually landed on this
01:49by default, right? And I think that really was the biggest key to focus on the end goal,
01:54which was a great consumer experience. Historically, too much paper, too much in-person.
02:00How are you solving those two problems? Paper-wise, it really depends on the lender.
02:04Some lenders have gone back to full paper. Some lenders are at that hybrid piece of it.
02:09Everything else we're doing now is digitally. So we even eliminated, if a lender wants,
02:13we eliminated our PDFs. Don't even, if they need it for investors, we can send it to them.
02:17Well, we stopped at the stare and compare. We did system-to-system. We integrated open API stuff
02:22and then started really working on machine learning, AI, and robotics. So during COVID,
02:26we just doubled down on that. So instead of just taking the money and going and having a free-for-all,
02:31we actually said, okay, this is a perfect time to take that and reinvest in the company to be where
02:35we thought we were needing to be. We never saw this three and a half years, right? We never saw how long
02:40it was going to be.
02:41So you've been a pretty active supporter of the Trump administration's housing policies,
02:47including GSE reform, and maybe even exiting conservatorship. How does GSE reform tie back
02:56to your leadership of silk title?
02:58I think when you look at it, like, it's a big unknown right now. There's a want,
03:03there's a potential desire. And if it happens, everybody's got to be prepared for what does
03:07that really mean, right? And I think the biggest thing for leadership of silk title is preparation.
03:10I can't control rates. I can't control economic conditions. I can't control what comes out of
03:14Trump's mouth tomorrow, and none of us can. So like, you know, the reality is, what can you plan
03:19for? And I looked at it and said, all right, you know, if it goes into an IPO status or goes out of
03:24conservatorship, you got to be prepared for that. Just because that means that everybody thinks,
03:28oh, rates are going to go down or this is going to happen. You got another piece that you got to
03:30understand, which is Wall Street's going to start turning out credit. It's not going to be because
03:34you're not funding it through the government now. Now you got Wall Street looking at it going, okay,
03:37now what's the inverse effect of that? So yes, could it lower rates? Potentially.
03:41So I've always thought this year that it's very unlikely that the GSEs will exit conservatorship
03:50for a number of reasons, but you've been adamant that it's happening. And so how are you preparing
03:58for it to happen? And what's sort of driving this push to take the GSEs out of conservatorship right
04:05now? I think when you start looking at it, everyone's so focused on the bond and you got
04:09to figure that out. I mean, what's backing the mortgage business right now? It's the bond, right?
04:15And we're leveraged to a hilt on that side of it. We've got so much foreign control sitting on that
04:20side of it right now. And there's that desire to break free of that, right? What that means chaos.
04:26Yeah. So if you're asking how I'm going to prepare for it, and you know, we're already been in three
04:30and a half years of chaotic rate environment. We're about ready to hit, even if they're, like I said,
04:34if the rates change, that's great, but you're going to be in another chaotic environment of how do you
04:38operate your business with new regulations and a transition. And how do you help your customers,
04:45which are primarily mortgage lenders, prepare for that chaos? I think it's more of a partnership.
04:52Like it's not, it's more of a, Hey, what can we do to make sure we have the best people,
04:56the most efficient processes so that we could focus on that chaos when it does occur and
05:00understanding and managing through it. We're not focusing on how to produce the business at that
05:03point in time. We're actually focusing on what changes that we have to work together on.
05:07How do you think the GSE is exiting? How does that going to impact mortgage rates in your mind?
05:15I think you'll see them go up first and then you'll see them go down.
05:17Yeah. So walk me through that a little bit. Like what's the, a little more detail there.
05:21Uncertainty. You're still going to have uncertainty. You're still going to have,
05:24if Wall Street does come into, into the mix, they're going to not know everything at first,
05:27right? They're going to think it's a great idea and make money because they saw it in the past
05:30potentially. But then you're going to say, okay, there's still going to be a risk built into that
05:33factor until it really flushes itself out. And it's okay. Now we really understand this.
05:38And that could, or it could go in the exact opposite effect. Wall Street goes, okay,
05:41we're going to do this to try and move the business and sweep the business. So it's the same thing I said
05:45earlier. I don't have that crystal ball inside. I know exactly where it's going to go. Those are
05:48the two scenarios and you've got to plan either way. Do you think it's a good idea that they exit?
05:53I do think overall it's a good idea. I'm a little bit nervous about that strategy of how you would
05:57do it. Yeah. I think, I think that's the key. I don't think if you look at the reason why they
06:01want, want to exit, it makes a lot of sense. I think everyone's question is how are they going to do it?
06:06Yeah. And how do we avoid a repeat of what happened when your last mortgage company didn't do so well,
06:14right? During the great recession. How do we avoid a repeat of that?
06:18I think that's the million dollar question. Now a billion dollar question. How do we,
06:21and I think it's going to have to, it's going to go down to leadership sitting in Washington.
06:25I don't think, I mean, if you really look at it, that chaos or lack of chaos, whatever your side
06:30you're on on that is going to really matter. Right. And then you got to decipher whatever's coming
06:34from Washington and decipher that down to your team, right? You can't control what they're going
06:38to do. We've seen that in the last 12 years, but what we can do is try and understand and make the
06:43best decisions for our companies and our partners. And how are you adjusting your operational strategies
06:49and how are you counseling your customers to adjust their operational strategies for any of the
06:56potential changes that are coming down right now? I think a lot of it is this, this notion around
07:00costs too, right? Like, so that's becoming a big player, even without that, without that topic of
07:05GSEs, I think you're starting to look and say, okay, how do you drive this cost down? Right.
07:09Everyone's focused on appraisal waiver, title waiver, all this other stuff. Like that's really
07:13not the bigger issue. The bigger issue is the technology costs. That's about that. That's
07:16incrementally rising at a rapid speed. The credit costs rising at a rapid speed. Like those are,
07:22those are things that are really serious stuff that if you're not working together to figure out how you
07:26lower that cost, you're really going to be behind the eight ball because then you're going to have not a
07:30rate issue, you're going to have a cost issue. How are you working to lower costs?
07:35We're double downing on more of the AI stuff and technology and true AI stuff. We're not just
07:38talking about it. That's why I don't even, I'm not releasing any of it right now. We're,
07:42we're really figuring it out. Right. And understanding what it really means. Where is it
07:45applicable within our business? Where is it applicable within our partners? Right. And where,
07:49and from a client standpoint, like it's not that easy to say, I got AI, here you go.
07:53Yeah. All right. Crystal ball it for me. A year from now, let's say Fannie and Freddie
08:00exit conservatorship in the next couple of months. It won't happen that fast, but let's just say it
08:05does. The idea. A year later, what do you think a successful housing finance system connected to
08:13title looks like if we've done things right? I think you're going to see a shift in the people.
08:21I think you're going to see a shift in the mindset of the people. I think you got to get your people
08:23ready for that. Right. There's going to be a fear sitting there in some of the technology and the AI.
08:28Everybody's got this thing. Okay. Job security. People are worried about the job security in this
08:31rate environment. Imagine what they're going to be like when you say, okay, like, and they start
08:35seeing any types of shifts and everything else. It's more of a understanding and explanation.
08:40What a lot of people aren't doing very well right now is they aren't explaining to even their,
08:44their, their overall organization, why you're doing these things. Like, and I think the why is very
08:48important because you still are going to have people, ain't going to some zero of no, no, no employees.
08:53Right. And I think you got to really educate and have them understand because you need them
08:56helping you with that initiative. You don't need them fighting your initiative. You need them
09:00helping you with that initiative. So, uh, we'll close with this one late last year. Um, you and
09:06I made a little bet and your side of the bet was rates were going to be, rates are going to have a
09:12five handle by the end of this year. Uh, and I, I, I think that's crazy. Uh, I think rates are going
09:18to stay around seven. Um, are you getting a little nervous? We're halfway through the year and we're
09:23still at 7%. No, ask me that in December. No, you know what? I love that, the, the notion of it,
09:30because again, at the end of the day, friendly banter, friendly competition on it and looking at
09:34it going, you know, I, I think if you really are honest with yourselves over the last three years,
09:38no one's been predicting anything pretty right. Um, I think we, there's, there's indications of why
09:43things can happen and there's indications why things can happen in a different direction. And I think
09:46those that are really understanding those, those indicators are starting to see success, not worrying about
09:51certain indicators that we've all been always used to watching. I mean, again, am I nervous about it?
09:57No. Could it go any other direction? Yep. Could it stay where it is? Very, very likely. Yeah. Can't
10:02control rates, but at least we get a good dinner. We will have a good dinner regardless. Mark, thank you
10:07so much. Thank you, Diego. Pleasure.