Lean, Integrated, and Smarter: The Future of Mortgage Technology According to Lending Leaders

HousingWire

In a high-stakes lending environment marked by margin compression and evolving borrower expectations, leaders from Fifth Third Bank, Rocket Mortgage, Planet Home Lending and Xactus gathered for a candid discussion on how to stay competitive without adding complexity. Moderated by Diego Sanchez and sponsored by Xactus, this special episode cuts through the noise to focus on real, actionable strategies — from consolidating fragmented tech stacks to streamlining operations with intelligent platforms.   Hear from Chad Powers, Eric Czajka, Candice McNaught, and Shelley Leonard as they break down how AI, lean process design, and integrated systems are helping lenders modernize in real-time. Discover how platforms like the Intelligent Verification Platform (IVP) from Xactus are enabling a smarter, faster lending lifecycle.

Transcript

00:00We are live from Colorado Springs. I'm Diego Sanchez, president of Housing Wire. And this

00:13is a bonus session. Y'all just got off the stage. And I have to say, I have not seen a room that

00:19packed in a while. It was pretty amazing. People were lined up along the side, lined up along the

00:24back, and all the chairs in the center were full. It was amazing to watch. And it was a really good

00:29session. So before we dive into this bonus conversation, could each of you just introduce

00:34yourself and talk about where you work? Yeah, great. Chad Powers with Fifth Third Bank. I oversee

00:40all of our real estate systems as well as the home equity business. Great. I am Eric Schaika. I work

00:45with Rocket. I'm the SVP of Governance and Oversight. Shelley Leonard, president of Zactus. Candice

00:52McNaught, SVP of Business Development and Strategic Initiatives. So it's a really interesting panel

00:57because each of you are lenders that have different business models, right? But you're all probably

01:03thinking about margin compression and cost savings in this environment. I'd love for each of you,

01:10just going down the line here, to talk about what activities you've been up to in this margin

01:16compression environment and how you're tackling the issue. Yeah. I mean, we're working really hard

01:21in trying to find great strategic partnerships. We've done some transactions on our correspondent

01:27channel to sell some flow servicing. That increases the margin on that business. We spend a lot of time

01:34on the front end of our loan origination operations, trying to take out costs on the credit side,

01:39the income side. I think it's a lot of things folks across the industry are probably doing.

01:44Yeah. I'd say having a startup mindset is really, really important for us right now. And that's

01:51something that Dan Gilbert has talked about over the years. But really getting back to that mindset

01:58and remembering that what got us here isn't going to get us where we're going tomorrow, right?

02:02Taking a fresh look at all of our systems and realizing that just because we did it one way in the

02:10past doesn't mean we should continue to do that in the future. So that has been really, really important

02:16for us to continue or really focusing back on mindset. So, Shelley, I'm going to skip you for a moment

02:23and go to Candice and then I'm going to close with you. Sure. Yeah. You know, I think during the time that

02:30we've evolved, right, when times were really good, where we had money to spend, we started to incorporate

02:34all these tech stacks and these tech vendors. And now we're looking at it and it's like the scope is 27,

02:4030, 35 people. And now we're trying to see how we can shrink that. Do we go to enterprise? Is that going to

02:45help us drive costs down when you're servicing and correspondent in retail? You know, how can we be on a

02:50level playing field? Are you using different loan operating systems for different channels? You know, yes,

02:55some are because they had to back in the day. And then things have evolved over time to where you no longer

03:00have to. And then what systems talk to one another? Now you've got AI. And how are you taking your

03:05servicing book and turning that into the retail for the lead gen? You know, do you want to be on

03:10three different systems or do you just want to be on one so it can all flow appropriately?

03:14So for us, our largest thing is doing QBRs with our tech partners. So we've asked them to present to

03:19us, where are we missing the mark? How are we performing? How can we retarget? Where can we cut costs?

03:25And what is our competition doing on maybe where we're missing the mark? And we let them evaluate us.

03:30And then we then evaluate them because we say, hey, this is no longer working for us in a cost

03:34perspective. We need to get to X and we want you to help us get there.

03:38Shelly, I love that. Could you respond to each of those? Because they were really interesting

03:42responses. Different, but also there's some common themes as well. I actually love how they all come

03:48together. Yeah. Right. And as a as a fintech in the space, right, we're doing all of those things.

03:55Again, not only in the products and services we're delivering to the lenders, but also internally,

04:01right? Because we have our own operations to run, right? And our own margins to manage, right? So

04:06we're building technology to help them with all of those challenges. And that's really where the

04:12intelligent verification platform comes in, right? So it's enterprise, right? So you can order all your

04:17verification products that you need start to finish within one platform, not only for origination,

04:23but also for servicing. So again, doing the full lifecycle of mortgage, but then it's also

04:28integrated, right? So it's APIs, everything is integrated into your operating system, right?

04:35Whatever the LOS of choice is, right? And then I think about the startup mindset, right? And that's

04:41when I think about being lean, right? And thinking about how do you adjust and not always do the same

04:48things you've always done the same way you've always done them, right? And that's exactly what IVP is

04:53about as well. Because again, I think about innovation in the verification space has been

04:58very limited for a long time. And it's because it's been constrained by how we always do things.

05:04And that is where we're lifting that constraint and saying, what is the art of the possible? What

05:08could we do? Obviously, it needs to be compliant. It needs to meet regulatory requirements. All that's

05:13a given. That's table stakes. But how can we use technology to drive dynamic workflows that will

05:20actually enable that lean approach? So again, I think that then I think about it comes back to the

05:26people, right? And it comes back to how are we leveraging our people who have deep subject matter

05:32expertise, and driving that into the platform so that you can deliver different workflows based on

05:38channel, you can deliver different workflows based on different models, so that we can support all of

05:42these different lenders with very different strategies, strategies, very different operating models

05:47in a singular platform without everybody having to operate under the least common denominator way

05:52of operating. And then I turn it the lens internally, right? And think that's all the things we're doing

05:57for lenders. We're doing all the same things internally at Zactus, leveraging the intelligent

06:02verification platform. So that's where we're automating. That's where we're delivering lean solutions.

06:07That's where we're going to leverage AI to drive tasks out and make sure that our people are focused on

06:12being empathetic and making sure that they're there to support lenders and consumers through their

06:16origination and servicing process. So I love how all of that comes together in a very dynamic

06:22ecosystem of technology. And you and I have talked about that before, kind of using data to save money

06:29on data. So yeah, it comes back again into the conversation. Candice, you brought up AI, and it's

06:37going to come up a lot during this event, because it's important, right? So could each of you, and Candice,

06:43I'm going to start with you, and then go here, and then down the row, could each of you talk about

06:48the build, buy, partner decision that's going on at each of your companies, and how you're thinking

06:54about AI? Yeah, that's a really great question, because the build versus buy, right? And we're

06:59watching what others are doing. It's a huge investment, right? But at the end of the day,

07:03when you go SaaS, they are going to continuously evolve it. They're going to spend the money to keep

07:07it going. If you bring it in-house, you got to have the developers, you got to have staff. When it goes

07:12down, can we get it to go back up as quickly as we need it to? You know, you have to evaluate all

07:17of those things, and we are. We're looking at a lot of our tech stocks. I'm also inquiring about

07:22our tech partners. Hey, what does AI look like for you? What is it in your roadmap? What's your

07:27vision for it? Because it helps me define whether what we need to focus on internally, if it's just

07:32a miss, or if it is something that we're already partnering with them, if it's already going to be

07:36built-in cost that we don't need to spend money on? Because you can throw a ton of money at AI,

07:41but is it really going to generate a proper ROI? Let's go here. Yeah. I mean, for us, there's

07:48really three factors kind of playing out right now. One, our bank as a whole, starting at the top with

07:54our CEO, has really embraced this and taken a top-down approach. So the bank is gone full in with

08:02co-pilot wrapped around the entire organization as a core part of everything that we're doing

08:07across the bank. What this is doing is a couple of different things. One is it's pulling along our

08:11partners within the bank. So our risk and compliance partners and everybody else who ultimately has to

08:16be on board with how you implement, that's happening organically in our bank, just naturally.

08:22You know, and then the second piece of it is we're replacing our LOS. I called it out out there

08:26for almost the sole purpose to be ready for this. We will more than likely buy and partner with folks

08:33specific within the mortgage space, but we're using the enterprise scale to mature our internal

08:39processes, mature our mindset, so that as we get the new LOS up and going later next year,

08:46we've got the disciplines in-house to go and start running off the races with it. I mean, we've just,

08:52you know, I also mentioned we're replacing our servicing system. One of the things that we've been doing

08:56is we have co-pilots sitting in on every single one of our new process map calls and out of every

09:02call, it generates a draft, visio, and procedure documents of every single call. Now, is it 100%

09:11spot on? No, it's probably 70%. But if you think about, I mean, for a mortgage operation,

09:17for servicing, we've got thousands of processes. We're accelerating the timeframe to complete that

09:23work. Unbelievable. Because then we just send people back behind it to put the finishing touches

09:27on it. Well, on every call, it gets smarter. Yeah. So it gets better. I love that. Yeah.

09:31Yeah. So we've created RocketLogic, which is our proprietary LOS, but that's just for loan

09:37origination. I mean, just for that. But there's everything else like you were talking about. There

09:41are the meetings, co-pilot for in Slack, like leveraging co-pilot to summarize meetings and

09:52create physios and create presentations. I don't know how I survived without it. And I don't know

09:58how I ever drafted a dang email prior to chat GPT or running something through it to just check me

10:06to see, hey, should I be looking at, because it's so, the capabilities are incredible, more out of

10:11just the, you know, what you think of for spellcheck and stuff. No, ask it to be more dynamic. Ask it to

10:17take a different angle if you're going to negotiate. Like just the incredible, and I said this earlier,

10:24supercharging team members with it. It really is. And it allows, Shelley, like you're saying,

10:29it allows our Rocket team members to focus on what they're good at, which is building relationships,

10:34being empathetic, and just truly getting to know the client and being there for the client rather

10:42than worrying about, oh, I need to go do a outline for my meeting, or maybe I need to put this client's

10:50certain qualification aspects into our LOS. No, instead, it's automatically putting it in there

10:56because it can listen into the conversation and knows what to do. So, yeah, AI is revolutionizing.

11:04How we originate LOS. I joke, and I'm somewhat serious, like I'm getting really close to sending

11:09co-pilots, like 70% of my meetings for me. Because so many of them are just, they're kind of readouts

11:14and statuses of what's going on and things along that line. How much more efficient can we be?

11:19So, my favorite use case so far, you know, I run a media business. It was, I asked ChatGPT how I could

11:26get it to stop crawling our content and posting it within ChatGPT. And it actually gave me a really

11:30good answer. Oh, really? Yeah, which I, you know, typed up a memo from it, sent it to my tech team,

11:34like, please implement this stuff. That's awesome. Yeah, that's awesome. Shelly, let's close with you

11:38on this one. Yeah, so, again, within AI, you know, we've done, we're co-pilot. We have internal

11:46ChatGPT. We actually have also had our own instance, if you will, that's safe and protected,

11:51that's API enabled, where we're using it to have a full knowledge base of all of those SOPs,

11:56as well as all of our system documentation, so that it's the one place that a team member can go

12:02within Zactus and say, how do I do something? And it doesn't just, you know, it doesn't just give

12:06you, like, a blurb. It actually shows you the screen, takes you to the spot, so it's very interactive

12:11in how it works. We've actually also implemented a tool, so ours is a combination of build versus buy

12:17as well, where it is a co-pilot-like, but it's been built to specialize in pipeline management

12:28and integrated into Salesforce. And so, it goes along in every sales conversation that we have,

12:35whether it's a Teams call, whether it's an online call, it's there, right? And it's not only,

12:41you know, creating the summary of the call and the action items, but it's putting them back into

12:45Salesforce, right? So, it's real good comments about what's happening with these opportunities,

12:51which I love because it's saving so much time in pipeline calls and translation and, you know,

12:57just normalizing data that salespeople put into Salesforce to make sure that we have a good view

13:02of how things are progressing. You know, we're using it, obviously, internally to optimize things

13:08within operations and just eliminate tasks altogether. But then we're also using it and building out

13:14some very dynamic workflows, again, to achieve the buy less data using data.

13:19All right. So, for your session on stage, you had a kind of a bonus question that you didn't get to.

13:24So, we'll ask it in this bonus session. So, talk about what's one underrated action that lenders

13:32can take that will just make them more agile in this new world of AI. And Eric, why don't we start

13:37with you? Go to Candace, come over here and then end with Shelly.

13:41I would say ignore the noise. And what I mean by that, I talked earlier about focusing on what you

13:48can control. And I think that's so important, probably for any industry. Focus on what's in

13:55front of you. Focus on the say-do ratio. Make sure that you're actually doing and completing the things

14:02you're saying you're going to do. But really, you know, ignoring the noise and focusing on what's

14:08in front of you, I think, is the most important right now in the environment we're in.

14:12100% agree. Candace?

14:14Yeah. So, I would say the one underrated thing is, I told my Ted Lasso comment, is be curious.

14:19You know, be curious about what you're reading and what you're hearing. It doesn't mean that you

14:23need to fall for it. It doesn't mean that you need to redirect your strategy and pivot to what

14:27everyone else is saying, you know, to mimic what Eric just said. The noise can get in our heads as

14:33leaders and it can really become a distraction. And then when you lose that distraction, you lose

14:38your strategy. And share your strategy internally with your people to ensure that you are on point.

14:43Is it what they need? You know what you need as an organization, but is it really what your

14:47producers need, your originators, to go close loans, put people in homes? It's the dream of home

14:53ownership. We all have the common denominator, but if we get distracted, it's going to hold

14:58certain companies back. And so, be curious. Continue to educate yourself. I said it on the stage.

15:03Get up and read. Invest in yourself as a leader and be curious, but it doesn't mean that you have

15:08to do it. It's one of three things that I hire for. Curiosity. It's a really good one. Yeah. How about

15:12you? Yeah. I'll give you something so underrated, it'll almost feel tactical. And I think it's a matter

15:18of people not focusing enough on appraisals and appraisal-related activities. And it wraps a lot of these

15:22things together. I think it's going to be the thing that when the market turns, brings processing

15:28to their knees if you haven't spent time investing in it. And there's some amazing technologies out

15:34there, AI technologies, image technologies that let you automate the clearing of appraisals and

15:39not enough people are paying attention to it. I mean, look, it really slowed things down during

15:43the pandemic. We all remember that. You look where the overall appraiser market from a number of

15:48appraisers that are out there and that are- Fewer and fewer. Correct. I think it's a big problem that

15:52nobody talks about. Not to mention, we're doing a huge change to all the underlying norms and

15:57processes within appraisal at the same time that could also be really challenging in that environment.

16:04Shelley, take us home. So I like the, and Chad, you said this on stage, but now's the time to sit with

16:11your operations. Now's the time to look at where you've got bottlenecks, where you're not as optimized

16:18as possible. Now's the time to evaluate your workflows and enhance and improve them to be

16:22optimized. I think that is, you know, one of the most critical things that we can do together with

16:29lenders as a partner is to make sure that things are as streamlined as possible. And so that when,

16:37when the market starts to come back, you know, you've got the ability really to hit the ground running.

16:41Amazing. Well, this has been a great bonus session after your amazing session on stage. Thank you so

16:47much for joining me. Thank you. Thank you. Appreciate it. Thank you.

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