I didn't have the sound turned on originally so you know, it kind of started off a little bumpy there but. But we're here, so we are live. Mr. Barton, how are you doing today?

If I was any better, I'd be you. Right.

Well, as you can see, as everybody can see, you are. I was waiting for this. What's. I need the patented Steve Barton respons. And how your day is going.

You know, I'm dominating today, Mike. Thank you for asking.

That's right. You can't give me the, the lazy answer. I mean you even got it in your little name at the bottom there, the domination tag.

I did, I did. I had to go visit my mother in law this morning at 7:00am at the, the recovery hospital and that's what the nurse said. How you doing, Mr. Barton? I said I'm dominating. She goes, oh my God, that just made my day. Well, you got a real going to.

Lunch with you, telling the waiters that stuff. It's fantastic.

Well, you get a real low bar, something like that makes your day, that's for sure.

Hey, well, you know what, it brings a smile to everybody's face. You say it to. So it's my, it's one of my favorite qualities of you for sure. I even wore my, I wore my shirt for you today. My, my ABC company, their coffees for closers. You know.

Huge fan.

Yes. Because that is certainly the guy that you remind me of more than anybody is. There's no excuses for nothing. We're about to do this, we're going to dominate and if you don't take a hike. Right.

All right, get out the way.

So today I have my good friend here, Stephen Barton. He is the vice president of national production for Eustace Mortgage Corporation, which is also the company that I work for. So in essence, you know, he's kind of like my boss essentially. So he forced me to have him on here and make sure.

Right.

A directive.

Yeah, but I was just emailing all you guys get me on this show.

He has to talk more and so I had to give him a platform, you know, because here we are. No, no, for real. Today we're going to discuss. It's election day, so we're going to discuss all thing politics. All things politics. We're going to talk about. We're only going to talk about Democrats who you voted for, who you hate, why we're out there voting every day. Right. That's what we're going to discuss today.

Yeah. So where's my sticker at?

No no, we're not going to do that because nobody wants to hear about that stuff. Go vote. You know, speak your mind. But today is going to be all things real estate, because that's what we talk. So today we're going to dive in a little bit into where we are in the market currently. How in the hell we got here, what, what did the path look like to get up where we were and where we think we're headed overall? And then if you are a real estate or a mortgage professional looking around going, what the heck am I doing right now and how am I going to survive this? This is the guy you need to talk to because he's never had a bad day in his life and there will be no more bad days going forward. At least, you know, we've all had bad days. But he doesn't feel that way right up here. It's always going well. So he's going to tell you how to survive right now and how to get through all this. But just to give you a little background on Mr. Steve, he has been in the mortgage industry how many years now?

Over 20 years.

20 years. You were an old, old man, I have no doubt.

Like, if you cut me open and counted my rings, you'd be like, dude.

I could see the salt and pepper. See, I don't have any hair, so it doesn't work out for me. It just shows up all right here.

But you look great.

And he's got two wonderful children and his wife Aaron, that he spends the rest of his time with when he's not dominating the mortgage industry. And he also, I would say, started, created, partnered up with running the renegade soccer club in Dallas, which when you say mortgage and soccer, those two things just kind of perfectly line up. So why not? Right?

Well, it was really a Trojan horse to get more mortgages, right? I was like, how else can we get more mortgages? Start a soccer club.

That's right. Get into families. They're looking for homes and all that kind of stuff. So, yeah, so that's great. And then he also, in the recent market, was buying and flipping some real estate. So he's had experience in purchasing investment properties and fixing them up and turning them around. So it's not just what he does at his job, but it's also a little side gig for him, too. So to say that the man has a wealth of knowledge when it comes to this business would be an understatement. So I figured it'd be great to have him on right now and share some of his Wonderful knowledge with us. So one of the things I've always wanted to ask you, and I think you may have told me one time, but I don't listen very well. How did you actually get to like, how old were you when you actually got into the real estate business or into the mortgage industry?

Well, it's funny because, you know, I. I definitely took a different path because of how long I stayed in college. I was there six years to get a bachelor's degree.

Right.

So of course, when I walk into like my house for Thanksgiving, my dad's like, oh, it's Dr. Barton. I'm like, dad, I just got a bachelor's. He's like, well, I paid for a doctorate. But so that, that took a little bit, a little bit longer than we thought. But after college, you know, I did recruiting. I was the rush chairman for our fraternity, so I did a lot of that. And so recruiting just came natural to me. And so I went to Austin and worked in the tech sector industry and semiconductors, huh? Yeah. You want to talk about, like, you know, mortgage has its own lingo. That's how I was able to learn mortgage so quickly. A semiconductor has its own lingo as well. And so I started out recruiting like engineers from China and India. And I had to be able to only speak the semiconductor language. I had to be able to bridge a pretty big language barrier too.

So frat boy coming out recruiting kids to be in the fraternity goes out to China to recruit.

Yeah, like PhD, IC design engineers. And they were actually making the chips that went in the PlayStation. The company I worked for, they made the chips that went into PlayStations.

Okay.

So very interesting work, but challenging. But it kind of was preparing me to be able to be in the mortgage industry. So after the tech bubble burps, I came to Dallas and a bank actually hired me to work in hr. What were they? Were they on the last call? Last call. They would have known not to hire me at hr.

Yeah, yeah, that seemed like a no brainer there for sure.

Yeah, yeah, no, that worked out real well forever, everybody. But it was to recruit for a mortgage division they were building. And so that's how I got into it's actually. I met Brian Mar. Brian Mar was actually in sales at this company and he was silky smooth because he was a call center lo. He never had to see anybody face to face. You got face to face with them and he was like a mime. Like he couldn't talk. It was hilarious.

But Brian's like the sharpest dressed man that I know, and he's got beautiful hair. So, I mean, I thought face to face he would have been able to really, really make that work.

No, it was really. He was socially awkward. It was fantastic. Like, we would play Risk at lunch. That's what we did.

Well, he's a beautiful man. Either way, maybe he doesn't like to conversate too much, but.

Totally, totally. But so that's how it started. And then the bank decided, hey, we decided we don't like mortgages. We're not going to be great at it. And I had to go, you know, help all the people I hired to go find jobs at different companies, and walked into a mortgage company with a stack of resumes, and the guy said, why don't you stay and just tell me who to hire and start building? And that's what I did.

There you go. And then here we are, many moons later. That was 20 years ago.

Yeah, it's 2000 into 2001.

Wow. Who's that?

First company, it was Maverick Residential Mortgage. There they are. Yeah.

And where are they at nowadays?

Crash and burn. Hey, man.

Well, speaking of crash and burn, What a transition. Good job. So we're in what would what could be called a very exciting, interesting, different market than we were just say eight or ten months ago. And we're all, everybody in our industry is obviously reeling a little bit, trying to figure out what the hell we're supposed to do, how we're supposed to adapt. But you know, just for, for anybody who's confused, in your opinion, you know, obviously rates are high. We all know this, but we've. Real estate's had high rates before. This isn't something that's completely unique. I mean, there have been many periods of time, and actually, I think the average over the last 20 years was something like 8 or 9% or something like that. When you take the aggregate over that period of time, and here we are sitting around 7 to 8%. So. But why is this market different? And, and how did we kind of get here?

So, you know, the funny thing is, and I was thinking about this this morning, is because everybody goes back and says, hey, look, here's the rate sheet I had from 1999. It was eight and a half percent, paying a point or whatever. The challenge that, why you can't think like that is because those people never saw 3%.

Right?

Right. So 8.5 was really great. But now you have a new slow of buyers, then they're the millennials and they make up the majority of the home buyers. They've only known low rates.

Correct.

So now the rates are double what they were more than double. And so they're freaking out because they don't know the what everybody. So when somebody says, hey, I remember when it was eight and a half percent, nobody cares. No, because the people that are going to be buying houses, they don't even know what you're talking about.

Right. It's expectations, what they're used to.

It's like if I made a Seinfeld reference to one of those people, they'd be like, what the hell is Seinfeld? Right, Right. Funniest show of all time. They think I'm crazy. Right? Yes. So, you know, I think people have got to get out of the habit of saying, you know, the rights used to be this, this is what were you. No. Do you know, saying that people have been doing this for 20 years and it doesn't matter because those customers that you're trying to get to buy a house right now probably aren't going to use you anyway because you're too old.

You don't think they're going to be chasing down the blue hairs, helping you out when you tell them. When I was, when I was your age, this is what it was for me back in my day.

Look, I mean, at the end of the day, you know, we have to change how we do things. And we had to change how we did things when the pandemic hit too. Right, Right. But nobody had ever seen anything like that, where everything cratered out for a 60 day period and then really shot down. Right. Like we were freaking out.

Yes.

The pandemic hit. You remember those calls where I'm like, what are we going to do? The secondary market was drying up on us. Yes. And then all of a sudden, boom, a light switch hit and everybody raced to the bottom on rates and then things took off. Right, Right. So we had to adjust then and we really have to adjust now. So not that it's important, because to remember history, you have to know history or otherwise you're damned to repeat it. Right, Right. So we do need to look at what the practices were when it was eight and a half percent to do loans, because that still is vitally important.

Yes.

We just don't need to talk about how it used to be versus how it is now. We need to deal with the problem now because it's different than how it used to be.

Well, okay, so from a loan office point of view, you know, we're talking to realtors and loan officers, hopefully that are listening to this, but just from a lender's point of view, there are lot, lots of different types of lenders out there that can give you a home loan. There's servicing banks, there are mortgage bankers like us, there are brokers. What, what has been the impact when you talked about the secondary market drying up, help people understand like what that means. Okay, when, when you're a lender offering a rate or you're offering terms on a loan and before, you know, 18 months ago we could offer 3% and if you want to use it, pay a discount point to get a lower rate. You absolutely could. And there have been periods over the last eight months, it's getting a little better right now. But there have been periods over the last coup where you didn't have a choice to pay a discount point. You had to, there was no option to not pay discount. So what, why has that presented itself and what we're trying to do?

Well, I mean it's no different than the shock that, that the home buyers feeling the servicers on conversely on the other side that service mortgages that you know, they have a formula they use for how long they're going to service a mortgage to be able to recapture the cost to purchase the mortgage.

Right.

And their runoff time frame, meaning when the mortgage pays off is typically over seven and a half years. Well, what everybody's afraid of is now that rates went from three and shot up to where it's at. The good news for a servicer, all these loans of the threes, they ain't going anywhere right now. They're going to hit their runoff targets, which is good.

I actually read something the other day that said that it was 80% of mortgages right now that people hold in the United states are either 4% or less, maybe 5%. It was like 85 or 5% or less.

I think it's 5. But the good news is that's great for servicers because they're going to be able to get their money back and their runoff numbers are going to hit. But conversely, doing loans right now, they typically would pay X in that formula on their, on their, their servicing. They've lowered that by more than half because they know if something happens to the economy, the government's going to step in and say oh by the way, we're going to buy 2 trillion of mortgage backed securities. Rates are going to go down and then their runoff is going to kill them.

Right.

So that's why you're not seeing people like the aggregators pay the normal amount. They pay for a broker or for a banker to send it to them because they're worried about that and they should be.

They don't want to lose the loans because they're packaged up, they're trying to make money off them, they bought the loans, they paid for them and if they can't earn long term returns on it, then they're not going to offer as much revenue on those loans to.

Be able to correct. That's correct.

And that's a difficult thing when you're talking to a buyer because to, to give, to explain that can be a challenge sometimes, especially if you don't understand it. And that's the thing. You know what I, one of the reasons I asked you that question is because I think, you know, as mortgage lenders, we have to fully understand what's occurring in the market, what's going on because we have to relay that information to a buyer and to our agents as well. Because the problem that we have right now is that we have ever, it's, the market's changing so quickly at such a rapid pace on, you know, I mean, we've, well, we've gone from 3% to 8% in less than a year. It's been less than 12 months that that's happened. And you have to be able to tell somebody how that, how that occurred and why these things are happening. Because if you can't and you can't articulate to a buyer or to an agent why it's expensive and why these things are higher, then they're going to pick up the phone and call somebody else that can't explain that to them.

Right. Or might just BS their way around and it sounds a lot better. Right? Right. So the key is not, and especially in this environment, is to get your knowledge base down, make sure you keep it short and concise and then you try to figure out how that person likes to learn how they like to take in information and then you just adjust how you do that. But yeah, you do need to have this knowledge of understanding why rates are going up. Right. With inflation and things like that, with the, with the Fed hikes, which usually are converse, but whatever, it's crazy right now. And then understanding why the discount points have become such a big player this year because of the servicing challenges we're facing.

Right.

So that is something different.

And so now we're entering into a place because the rates are so high that a lot of buyers are scared or, you know, scared maybe better word is probably just hesitant about getting into something because now your mortgage Payment just shot up 4 or $500 based off of the same purchase price, depending on, you know, the loan size. Yeah, and so, so there's a lot of, there's a lot of fear getting into the market right now for that reason. But would you say that, that right now is actually, I mean, we obviously talk about this stuff all the time, but would you say that right now is actually one of the better times to actually buy a home than that we've seen in a while?

Well, I mean, it's better than paying 100% entrance on rent. Correct. I mean, so, I mean that'll always be the case that I think people that are really trying to evaluate whether to purchase a house or not always need to look at the other side of it. I mean, if you're paying into rent, you're not getting anything. And then there's obviously financial advantages with your, your tax breaks with mortgage interest that you can write off and things like that, that, that help benefit coming back the other direction. But for me, there's never a bad time to buy real estate.

Right, right.

It's just something my dad taught me very early on, something I've practiced in my life. Whether rates are up or whether they're down, I always purchase real estate. And right now, frankly, the market's shifting back into favor of the buyers. So maybe the rates are a little bit higher. That's great, that's fine. But the fact of the matter is all economic indicators point to the rates softening in the next 24 months. At some point now do I ever think they'll go back into the threes? I don't know. But I, I would bet. No.

Right.

I would bet it's going to hover some around four and a half to five percent and that's going to be your soft landing spot. It's fair to the servicers, fair to the aggregators, fair to the customer. That's probably where we lay in. So now is the time actually to go in and have your real estate agents armed with the ability to negotiate seller paid closing costs or negotiate paying for, you know, two, one buy down, which is obviously the hot topic right now. But we're using that money to make your out of pocket expenses lessened on closing costs so that you can afford the extra three to $500. And because if you look at it like, let's say you buy a house today and it's $500 more a month than what you're expecting and we think rates are going to be back in the fives by, let's say, I don't know, August. So you're looking at nine months of paying $500 extra. That's $4,500 to get the house you want. Right. So if you have the seller pay $5,000, you basically had them pay that gap of the rate. Then what happens is when you go to refinance, you skip two payments and you're going to lower the rate. You're going to actually end up making money on the transaction if the seller pays that. So is there a reason to buy a house? Yeah, because now the buyers are starting to get the advantage back in their direction, and you want to definitely be the first one in on the right houses.

And what happens in eight or nine months or 10 months when rates go back down to fours or fives? What happens to the, to the buyer's power at that point?

I mean, it's going to become substantial because here, the other part of this economic thing that's happening out there, and we're seeing it month over month of the amount of inventory that's coming back into the market, it's up 37% over the same time a year ago right now.

Right.

So if this trend continues, when the rates go down, the inventory is actually going to be back normalized and the buyers are going to be able to go fast.

So if, if you were, you know, we obviously talk to realtors constantly. That's part of our job as we interact and work with agents on a regular basis. And I know that you play a big role in helping a lot of us, you know, convey and what's going on in the market and help us kind of direct agents on. On how to survive right now. So if you were talking to realtors and you were. If we were sitting in front of a group of 20 agents and you were saying, okay, the markets change, we're in a different environment than we were eight months ago. Here's how you're. Here's how you're going to survive for 20, 23. What, what does that look like for agents from your point of view?

You know, it's funny. It's no different than what we've been telling them for three years because we never abandoned the agents during the refi boom.

Right.

And. And it's the exact same thing I've been, you know, and whether you talk to Rachel Potter, you talk to Lee Lamont, or you talk to our friends in Baton Rouge that we've met with or, you know, Lafayette, or, you know, even in Vanderville, and Metairie and all those places. The same thing holds true right now that needs to be holding true for 5 years is you have to get on top of your data, right? It's all about data. And I keep telling real estate agents this because realtor.com and Zillow have already been doing this for years where they're spending billions to market your customers. Now you got real ology that's coming in and they have to go pay to get your data. Well, you have your data and if you have your data, then you can still win this game because you already know your customer and it's really hard for them to get local, right? So it's the same thing I've been saying for three years at lunches all over the country. And it doesn't change as Realtors. Get your data down, like get it dialed in. Because once you have your data set, then you can choose to go any direction you want. You can have borrower intelligence, you can do your birthday and anniversary mailers, you can do your just list. If you could still do the old school techniques that still can work right now. But it also allows you to scale up these other pillars using the technology that's out there today to get to your buyer before they've made the decision to buy.

So when, when you say data, because again, you know, let's pretend like we're talking to five year olds here. What, what, what are you talking about? What kind of data are we looking for? If I'm hosting an open house or I have a client that closes with me, what, what type of information do I need to make sure I have and where do I put it?

Well, I mean the easiest thing to do, I mean it could be as simple as going old school Excel spreadsheet, but you know, every Realtor should have their own CRM. The good news is some of the real estate companies, whether it be Keller Williams or some of the bigger ones, they have CRMs built most part. But there's a lot of good realtor CRMs for the Independent brokers as well, because you know that we need to be able to support those and our platform supports both. But on that data, you're really looking for key points that allow you to have intelligence built on top of it. So obviously first and last name address is always awesome. Phone number and email address. If you have those five things, you really can run your data sets the way you want. And the great news is it's all public data, right? So it's none of it's private data. There's no socials, there's no birthdays. You don't need any of that stuff these days to. To be able to get the information you want.

Well, and when you look at companies, you know, that run the world right now, like the Googles and the Facebooks and the, you know, Microsoft's of the world, Microsoft maybe not being the perfect example of that, but to some degree, I mean, their entire business model is built on human data, correct?

That's correct. I mean, there's a reason why every time you open up your Facebook, it's trying to get you to buy something you were just talking about.

Yes.

So don't say anything weird around your phone because that will pop up in your feed.

Somewhere. You're looking for. Looking for videos about feet.

Well, I literally was just talking to my wife because I love, you know, Maroon 5. And I'm like, we haven't been in a Maroon 5 concert forever. Got on Facebook this morning, like, Maroon 5 coming to Dallas. I'm like, you idiots.

Hey, Adam Levine is a sexy man. I agree.

He is. He's pretty good. Pretty good, buddy.

Yeah. So when you were talking earlier about, about agents and getting after their database, you know, and making sure that everything stays local. Okay, one of the things that I've noticed over the years doing this, I've been in it not as long as you've only been doing this for 12 years, but you've seen Zillow, you've seen realtor.com Trulia, even Rheology. These companies have been trying to penetrate the real estate market in individual cities and. And areas for a very long time. I mean, they've been trying to do this for, I mean, since as long as I've been in the business. Zillow's created their own brokerage. They've had their own mortgage company. They've all kind of tried this one way or another. And there's even situations now where you have companies coming in like, you know, that are running the business. I won't say names, but running the business model of a brokerage for, for example, and then having the realtors, Realtors pay their commissions out of that. But what you've. What you've noticed is that none of them have really had any success on a grand scale. Right. Because like you said, real estate is very, very local. It's very, very much in your community, very much your friends and family. And having somebody from a nationalized or a national company come in and try to sell you something in a neighborhood that they know nothing about. Isn't something that's an easy task to accomplish. So we've stayed very, very local and I think that that's where we head to. So if I'm, if I'm thinking about, you know, my local market and what I can do to kind of get in front of as many people as possible, what type of stuff should I be doing as an agent to make sure that, you know, I'm collect. I need to get the data. I've got to collect the data. Well, how do I get the data? What are activities that I should be doing to make sure that I have access to this type of stuff?

Yeah, I mean, the great news is the data is all around me, right. I mean, it could be as simple as my son's and daughter's elementary school prints out. Still the prints. Yeah. I can't believe I'm saying this. The directory with everybody's names and phone numbers, email addresses and addresses in there. So I paid a college kid 10 bucks an hour to input it for me. And I've done 26 loans off that database in two years.

Wow.

Because it's giving me the information to allow me to know this. But church is always a great one. You got your sphere right. People that, you know, friends and families, those are easy ones to put in. And you just start adding from there. Right. You just, you got to start somewhere because the, the, the challenge is real. Say, you know, I haven't done it. It's just, it's overwhelming. Well, just put in your friends and families, then just start there and then start adding to it and make it part of your daily habits of your practice. Because, you know, being local is really important. And the important part of being local is everybody knows you're local. So to do that, you got to talk about, you know, what you do. You got to talk about real estate. And then the second biggest part is you got to make sure you pick your ride or die partners right now.

Right.

I mean, that is like never been more important to have, you know, at least two awesome title companies, two awesome insurance agents, one awesome mortgage lender. Just one. Just one. Just one.

And who would that be?

Yeah, talking to him right now. Right, Right. But having those people that you know, have your back that help you continue to grow and, and share in the influence, because you need to do some of those community local events and, and get into it because you still, you still got to do hand to hand combat. Yes, having the data is great, but you're still gonna have to get out there and bloody your Knuckles, right?

You have to. There's a mix of, you know, a lot of the old school stuff went away. The, the, you know, listing cards into mailboxes, the thank you notes. You know, we've gone so digital on everything that a lot of that old school stuff has kind of faded off a little bit. But, you know, what's the saying? Be where other people aren't. Right? Be where everybody isn't. So maybe it's time to get back to those type of activities as well, making sure that you get in, in front of as many people as possible. One of the things that I try to impart on the agents that we work with, and you said this already, was you have to get involved in your community. You have to do stuff, you know, and it's weird because you think, well, I'm going to this, you know, fundraising event or I'm going to this church event or I'm doing whatever activity it is. And it's like, well, that's not really work. Well, yeah, it actually is because your job as an agent and a lender is to get out amongst the people because the people are the ones that are buying and selling houses. And so if you're stuck in your house and you are sending out, I mean, here's one of the things that I learned from you and I tell, tell people all the time is do what you're good at, right. There are plenty of people that exist in our industry that do fantastic with third party leads of strangers they've never met before, right. Where they have a system and they get on the phone and they call them, you know, five times a day and they have a CRM that manages how often the Texas texts go out and how long emails go out and all that stuff. And there are plenty of people that have made a complete career over that. However, if you're not that person, if that is not appealing to you, which I don't think most people in our industry, because we are typically, you know, people, people, people, right? We want to go out and meet people and spend time around the community. That's not going to be how you're going to have success. It's just not. So you have to go out and you have to get in front of people as often as you can. And you know, we've had a push internally within the company to say, hey, look, do social media have, you know, do podcasts like this, do reels and all that. And all of that stuff I do believe is a big piece of the, you know, the stew of Success, or whatever you want to call it, the soup of success, to get out there and have, and get, you know, a bigger client base. But that can't be the only thing. You have to do all of those things. You have to meet with agents, you have to meet with your clients, you have to go out to these events and participate in life in order for you to be able to cultivate a good sphere of business. And then once you've done that, you've got to make sure you stay in front of them as much as possible by doing reels and, you know, videos and whatever else you can on social media. Would you agree with that?

Yeah, I mean, I think it's time for loan officers to remember what the inside of a title company looks like again. Right, right. I mean, it's funny, when this thing started to turn, I, you know, I was telling all everybody, get your butts to the title company. If you want to meet more agents, if you want to be in around the activity, go to a title company. That's where activity is happening still. Yeah, so I know a thousand percent. You know, I've been doing calls with loan officers the last couple weeks. I'm doing one tomorrow with Anthony and it's really honing in on the pillars of business. Right. Making sure that you have the pillars of the business set up. Because the two outside walls for a mortgage person are very easy. It's my database is one wall and real estate agents is second wall. Right. That's going to be where the majority of your business comes from. So that's outside of the house. But to not stress those walls out, you have to build the other channels inside the pillars to make sure that the house has strong foundation. So if your realtor business slides or your past customer business slides, the pillars in the middle still hold everything up no matter what.

And why, why right now? If you're an agent or a lender, why is it so important that you get so heavy and engaging in this type of, these type of activities right now?

Well, I'm annoyed because it shouldn't have been right now. It should have been always right, you.

Know, but the challenge, like it's not easy. Loan loans and deals, you just hung around, your phone rang. That's how it was the last five years.

Well, I told, you know, I told everybody on the call about two weeks ago, as I said, you know, we were working 14 to 16 hour days, but it was in our office on loans and we forgot what it was like to work 14 hour days actually going out and Shaking hands and kissing babies and talking to people and being involved in the community. Yep. So we just have to get that energy back up. And when you're tired, you don't want to do it. You've just got to go. Because ultimately, if you look at what's going on technology wise with the industry, and you and I have had these conversations several times, the robots are coming still. I mean, they got slowed down by the fact that rates shot down and everybody had to just do loans to get through.

Yes.

But everybody's trying to figure out a way to master that. So to be able to extend our life and our livelihood inside of this, you have to build this foundation as wide as you can right now and as strong as you can so that you're ready to, to go as far as you can.

Well, and I think too, with the adjustment of everything that's happened with the, like we talked about earlier, with the pricing on loans and what the revenue models look like for mortgage banks, that, and I don't think this affects agents really, because I do think that agents, because everything is so local, I think, you know, they're protected and shielded from a lot of this. But for us on the lending side, you know, I don't know that in the next 10 years our value is going to be what it's been the past 10 years. And I don't mean value is what we bring to the transaction. I just mean what, because of, like you said, the robots are coming. So how much are you going to be able to make per loan that you didn't, that you couldn't before? And, and now, you know, the, the lower comp models with higher volume is going to have to be probably the way things are headed. Would you agree?

Yeah, I mean, I think, I think we're probably, you know, closer than we think. I mean, obviously this year that's what we've had to go to. Right. To make sure that we can help be part of the solution for our customers and help our agents and those things because, you know, that's where our livelihood comes from. But yeah, it's closer than it is further away. And that's why we have to get smarter. And that's why the fact that we got on the side of data five years ago has really helped our growth and helped maintain our business from walking out the door.

Right. So if you had a, your little crystal ball that you're looking in and you say, okay, what's, what is our, what does our industry look like for the next, you know, next 12 months, next five years, you know, where, where, where's this ship headed? Where, where are we going?

Well, let's hope we don't Titanic into an iceberg, but maybe we already have. Well, I mean, I, I honestly, the, the biggest thing that's looming over our heads and Everybody knows it's 2024. Right. When, when November hits in 2024.

What, what's going on? I don't understand what's happening.

No. Well, that's when the Cowboys are gonna win the Super Bowl.

Ah, yes, yes, yes. The Cowboy playoff.

Famous playoff run of 2024. I feel like Marty McFly. No, I think I have yet to see in my history where an economy is stalled out and the government's not trying to fix it before an election year because.

Right.

One thing they really don't want people talking about is the economy going into.

An election, which is what everybody's talking about right now.

Exactly.

Going into today. Yes.

Right. Inflation and interest rates and consumers and you're killing, you're killing everybody.

So probably not going to work out really well for the ones currently have control and it'll probably swing the other direction, which is very normal in situations.

Yeah. I mean, who can fault people for thinking like that? Because they have pain. Right. They have.

That's right.

Instant pain. And they want instant solutions, and the other side's always promising the instant solutions, and that usually has some pain coming to it as well. And that's what we're seeing in this scenario right now. But having said that, you know my gut feeling now and in the short term, in the next two years, I, I feel like interest rates are going to come back down. I, I feel like you're going to HEAR the words $2 trillion in mortgage backed securities are going to be purchased by the government. When that happens, I think you're going to see a run on rates because everybody knows real estate in the housing market drives most of the economy. Because the lowering of interest rates creates disposable income.

Right.

The lower the interest rates means you can buy more house. And if you can buy more house and you have more money left over, you can buy more stuff to put in the house.

Yes.

That usually fuels everything around. So I see that happening in the next 18 months because people are like, I don't think It'll happen until 20 into 2023. Well, maybe. But if you're doing it by the end of 2023, the primaries are already starting. Right.

Right.

The DNC and the RNC are already picking their candidates and they start campaigning at the beginning of 2024. I think you're gonna have the rates drop before that because you wish.

They start campaigning at the, at the beginning of 2024. We're gonna see it in about three weeks.

Yeah, no, I know, I get it. But I do think that will help us out long term. I do feel like rates at a 5% level is a fair place to land this thing. Even 6%, I'm not scared about.

Yeah.

But I think if you look at the wage gap difference and how slow wages are increasing, there's no way they can't stall out the housing market if they keep the rates at seven and a half percent. Right. Because people just aren't making enough money, especially the people that want to buy the house, which is usually the lower socioeconomic group that they're blocking out of the housing market, which is unfair.

Well, I read something a couple weeks back where they were, they were comparing prices with, including inflation, everything, just what the raw price of things were or cost, you want to call it, from 1995 to 2015. So it was over a 20 year span.

Right.

And they said they found that the, the, the cost of an automobile in that period of time had gone up something like 300% and the cost of a, of college had gone up like 400 or something like that. And, but the cost of owning a home had gone up like 600%. So it had jumped up dramatically. And then they compared it to how wages had increased in that same period of time and the average American wage or average American income had only gone up about 125%.

Well, and then if you do that study a little bit further down and you look at minority families, they've been actually, you know, treated way worse on that.

Right.

You know, that's, that's one of the puzzles that we're trying to unlock, you know, because we are, we do have one of the higher averages of minority based clients. And obviously being in Louisiana and Texas, you know, it's important for us to try to help be part of that solution. So it's been, it's been a little bit of a struggle. We still got to figure it out.

So I know you mentioned earlier that you said that you think inventory will start to come back, but we've been in such a shortage of inventory for so long, averaging, you know, less than a month or two months of inventory on hand in most major markets. I know some of that stuff's turning around depending on where you're at, but we still need five to six Months for it to be a balanced market where, you know, like what we're used to. You know, I see everywhere that housing starts as a whole or down on single family residences. They're building condos, they're building apartments, they're building, you know, townhomes, those kind of properties, but the single family residences are starting to are, you know, going downward, they're not going upward. So what does that do? I know, you know, we will have some relief, I'm sure, due to, you know, people trying to upgrade once the market becomes a little bit more fluid with rates coming down some. But what does overall inventory look like? And do you. Because I, I don't know, I, I know you think I'm doom and gloom on this stuff sometimes, but I do think that the, the American dream of homeownership is really starting to slip away from a lot of people due to the fact that incomes don't keep up with prices and do the fact that they're just not building affordable housing. You can't make, you know, whether you want to say a builder cannot make enough money because of land and costs, or you want to say maybe there should be some subsidies for builders to build more affordable housing, but it's not happening. So, so how does that problem get solved? Or can we. And does that even impart people more that you got to get in and buy while you can?

Well, I mean, the inventory thing is still going to be constrained for the next 12 months. I mean, pretty, you know, but I mean, as I said, it's gone up. Right. The average days on markets is up. You're almost to two months now. But like you said, it's got to be at six months. I still think you're 12 months away from that. I, I have long advocated telling people that the way to build affordable single family homes is the government has to subsidize these builders and make it worth their time.

Right.

And give them either a tax credit or a benefit to doing this. And so until somebody gets behind that, the cost of land is not going to go down because they don't make it anymore. Right. It's the old Abraham Lincoln deal, right?

No, excuse me, that's Mark Twain, sir.

Mark Twain. Sorry. Whatever. Whoever did the Louisiana Purchase, whoever that was. Whatever, whatever. Yeah, thanks a lot, Franklin. So, you know, figuring out that piece of the puzzle is one piece, and then the second thing is figuring out mortgages that benefit those customers as well, because customers in that bracket, they want a house worse than anything. But unfortunately, because wages haven't grown and now you have inflation. They're spending $400 more a month just on groceries. You have to figure out a way to limit their out of pocket because they still deserve a house. And unfortunately, the government has to be part of that solution. And the bond loans and things like that help as well. The CRA program helps out as well, but it's not, it's not perfect at all.

CRA being Community Reinvestment act, by the way.

I mean, it was a good thought process when they did it. And they, you know, forced all the banks that took all the money during the bailout to do it. But unfortunately, the way they structured it really benefits sometimes the wrong group.

Well, and that's the, that's, that's the thing that, that, that, you know, is frustrating to some extent from our industry standpoint is like, you know, there, there are plenty of industries around here that are subsidized on a regular basis. Anytime somebody says government subsidies, everybody's like, oh, but if you know about oil and gas, if you understand the airline industry, if you understand all of these, the banking industry, yeah, they've got the biggest, they've received the largest subsidies of anybody over the last 15 years. So, right. This stuff already happens. And if we're truly dedicated to helping the American, you know, individual be able to own a home, because for most people over the history of this country, that has been the singular path to be able to have any level of wealth accumulated over a period of time because you own an asset that appreciates in value. And then because of the appreciation of that value, you continue to compound on top of that by either upgrading homes or using that cash to reinvest in other places or whatever. And until we get to a place where that becomes a priority for those in charge that you're voting for today, then we're going to constantly be in this cycle. Right. So, so until that happens, you know, we're not going to be able to solve this problem. And my, my personal fear, or whatever you want to call it is I, I always say I think they're trying to commoditize housing. I think they're, we rent cars, we rent music, we rent, you know, stream, we do, we rent our phones, we rent everything. So why wouldn't they want you to rent houses? And you know, there's, there are people and companies out there that are trying to consolidate some of the renting platforms and individual landlords and all this kind of stuff so they can raise rent across the board. And again, it just drives point to home Drives the point home that if you want to be a homeowner and you want to get to a place where you can start to have your own family wealth and generational wealth and, and homeownership is that path. You have to. Even when the market's not great, you have to make those decisions now because the, the inventory is drying up, the programs are drying up. We hope and we petition and we try to lobby to get, to make that change, but nothing's happening right now. And, and you have to be able to buy something as soon as you can in order to be able to not let that slip away. Right.

Yeah. No, I mean it certainly. And you know, for, for anybody, you know, that's listening and stuff we talk about there's not a bad time to buy a house because even if you look at what happened in 2008, the housing crisis, now the good news is Texas, you know, Tennessee, Louisiana weren't as drastically affected as California, Arizona, Washington, Florida.

Better, better laws for the state on how you could lend.

But, but ultimately if the housing market were to take a slip or even crash for that matter, and it decreases 3 to 5% in the states that, you know, currently we lend in, who cares? I mean, it's going to appreciate 3% on average year over year. And over the last two years it's appreciated 50. Right.

Well, California fell off. Would it have like a, the biggest crash in the country in 2008? And if you go find a house, what it was listed for 2010 and how far it fell off, that house is worth way more today. Oh yeah, it was back then.

It always comes back around. So that's why I tell people buy now. You know, we'll worry about the rates when they go down and we'll be there to refinance and help you save that money, but take care of your family, prioritize what's important. Get the backyard or get, get the, the condo that you want and let's go. And we're here.

So the big news that's going to come out on Thursday, today is Tuesday. We will have the new CPI number, which anybody that pays attention to things is always interested when that number comes out. What are you hearing about what you think is going to happen on, on Thursday?

Well, I, I heard Georgia's going to be number one. I think Clemson's gonna fall out of the top. Oh, wait, that's. Sorry.

Completely different. Sorry, my bad.

That's tonight. Okay. That's tonight. Yes. Well, I mean, honestly, we've been lucky over the last Three years. It's been pretty high. We saw it go run a little bit flat last month. It's actually coming out on my birthday. By the way, don't forget Steven.

Happy early birthday, you old bastard.

Exactly. But I think everybody's shaking right now. I mean, I've been going to the grocery store for the last couple weeks doing the shopping because we've been having some family stuff. And I just notice it, like, just what milk costs, what orange juice costs. And I'm like, this is ridiculous.

Yes.

And so if I feel that way, I know everybody else is feeling that way. I'm a little more opinionated probably than everybody else, but it's frustrating. So I think you're going to see it on Thursday. I think that frustration is going to boil through.

Well, the, the numbers that impact inflation the most are typically oil and gas and food. Right now, those are the biggest drivers. And even they call it core inflation when they pull out those numbers. The problem is, is that what's left in the core inflation is still all related to oil and gas and food. Right. Because restaurants and Travis traveling and services and airlines, well, that's all oil and gas and food, like, that's all where it comes to. And my frustration is somebody who pays attention to this stuff from time to time and tries to educate myself on it. It's just simply that, you know, oil and gas isn't going to go down until OPEC decides they want to produce more and, you know, get it out there. And that's, that's not happening anytime soon.

Right.

And the food issue is going to be. Is continue to be affected by the war in Ukraine because Ukraine produces fertilizer. They produce nitrogen for the soil. These are all things that rain, make crops, that crops love, make crops grow. Like, like what's the idiocracy? The, the brondo. Right. What plants crave. So without that stuff, you're still going to have continued prices. And it's frustrating because the Fed looks at things and goes, well, let's just keep raising rates because we have to get inflation under control. But in my opinion, none of those measures really change the fact that oil and gas is expensive and food is expensive and making money more expensive to borrow doesn't really impact that. Would you agree or disagree?

Yeah. And I think honestly, you know, I filled up for gas yesterday and it was like $3 and 33 cents, but I get my gas where I shop, so I had my little code and it took 60 cents off a gallon, so. Oh, wow. It was pretty good. I Hadn't used it in a while, But I think $3 and 30 cents Americans would be okay paying because we paid it before.

Sure.

The problem is it's that and everything now.

Right.

And so like every time you turn around, you're getting punched in the face with something going up. Hell, eight chicken wings cost 19.99 at pluckers. Now it's ridiculous.

Was it 20 bucks for eight weeks?

Yes. So now, you know, chicken wings are off the table for me, which they probably should have been anyway. But, you know, I, I think, you know, the, the two things I always say is there's only really two ways to solve a recession or an inflation. And one is go to war, which we're not going to do.

Right.

And the second is you drop the interest rates and you fuel the housing market and you get all the disposable income back in there. So, yeah, you know, hopefully it doesn't come to that. We have some sound principles. I mean, they, they needed to raise the Fed interest rate. Now do they needed to go as high as they did? I don't know. I mean, there's a lot of degrees in that room that are trying to make really smart decisions. So, you know, we're not going to change their mind. So we just have to trust a little bit and then just have our voice heard today and you know, in two years on this same day and, you know, hopefully we get the right people and they make the right decisions.

Well, we, we're good solid 45 minutes into this, so I know you got things to do, but I just want to leave with one thing or a couple more things on what you and I know we've talked about it a little bit, but if you're an agent or a lender right now and you're trying to survive, there's opportunities out there, there's the, the market shrinking. Right. As far not just the available customer base, but also the available competition. Mortgage companies going out of business left and right. There are Realtors getting out of the industry left and right because they can't afford to pay their bills. So there's an opportunity there, you know, adding to how you manage your customer base and what you do to stay in contact with them. So what, you know, if you had, say, three things, if I'm a realtor or a lender and I got three things I need to focus on. You talked about pillars, but specific things. What would you be doing right now to make sure that you can survive this?

Well, one, obviously, and the, the key one is you gotta time block your days out. You gotta make sure that you're maximizing every single minute that you can. I mean, we all have personal stuff we have to do. We all have life that happens to us and we need to be able to prioritize that. But outside of that, every single minute can't be wasted right now.

Right?

So if you think you got time just to sit back, relax and, and read the newspaper, somebody else is out there hustling. Because like you said, although the pie shrunk, the number of people that are trying to get to the pie are shrinking just as fast.

Correct.

So when people get hungry, they hustle. And so right now we are all starving. Yes. So whoever has the hustle is going to win this deal. So get your time blocking done so that you can hustle. Second thing is the data. You, you have to get it. It's a must. And you know, I keep telling agents, I'm like, you're not listening to me. You don't understand how important this is. And I'm not trying to scare anybody. I've just watched it work for us. Right? I've seen the benefit that we've get and I see the agents that we have signed up on it. The benefit they get from, you know, the borrower intelligence software. And then the third thing.

Well, hang on, before you get to the number three on the data thing, and I think you, you told me this and I didn't realize it as much, but especially from an agent's point of view, and you could do this from lenders as well, is when the day comes where you're, you know, old and gray and ready to kind of call it a, call it a career and you're ready to walk away. That data can be a retirement plan for you that will carry you on for the rest of your life because you can get residual off that data if you handle it correctly. But if you don't have the data, you can't do that. So, so don't you think that, that. I mean, you've told me that before. I think that's a huge piece.

Well, you know, it was actually Hardeman's idea is he said, why can't Johnny, Johnny, you know, because he does insurance, right? Yes. So he said, why can't the mortgage industry and the real estate industry be like insurance? You've built this whole book of business. I can sell my insurance book to somebody. And so, yeah, I mean, and that's what we've had success doing, is setting up the annuity process for you know, loan officers to be able to hand over their book of business, stay connected part time, keep their license active, but then don't have to do the loans and keep the annuity going. So that's right. That's right.

Again, bigger reason why databases are so incredibly important.

Absolutely. They can pay you for a lifetime. And then the last thing, you gotta get back to what worked 20 years ago when those rates were eight and a half percent.

Yeah.

Like you were saying, you gotta get involved in the community. You've gotta start showing up at events. Title companies are having parties again. Cause they're struggling. You gotta go to those parties. You got to network. You've got to do those hard things. And we have several good ideas that we're putting together that have come from our real estate agents, from our loan officers to help you do that as well. And because we're here, I mean, we need you. So whatever you need from us, we're ready.

So just posting on Facebook, hey, call me to do your loan or call me to buy or sell your house. That's not gonna, that's not gonna get it done.

I feel like that might not work.

Well, I know, you know, I appreciate everybody that kind of hung on for this. The time. I know we're in an environment where, you know, if you've been doing this any more than just a few years, you know, it's, it's definitely getting back to what, you know, more of, more of a normal market is, but also it's a little scary. And, and you know, we're, we're dealing with new challenges that we haven't had to deal with in several years. And you really got to lock in and try to figure out where your advantages are, what your competencies are to put you in the best position. Because the way that you do business and the way that somebody else does business may not be the same. And you can't just copy what someone else is doing. You have to do where you fit in best and make sure that you're using all of your own personal tools and advantages to try to get yourself in front of as many people as possible, whether it be agents or potential buyers or sellers or whatever the case may be. And then help yourself by educating yourself on what's happening and why. Because if you want to take the fear out of people, people's desire to buy or sell their home, you have to be able to explain to them why these things are occurring and what it's going to look like in the future. And, and it can't just be call me because you know I'm your best friend. Because this is trying times for people. They're nervous about jobs, they're nervous about the economy. They have fear about all kinds of things that are occurring. And without information, fear perpetuates. And you have to have more information. You have to be able to share that in a way that's digestible for folks.

Brian Mars said it best to me. One day we were flying from Greenville, South Carolina. We just opened up a branch here, and it was when one of the hurricanes is hit in Florida. This is when was way back, way back when. And you know, everybody knows I hate flying. And so, Brian, you know, we're flying in, this hurricane's coming, so the storm's there and we're on a small 2:1 and the plane's just all over the place. And Brian looked at me and he said, hey, whenever you get in a situation like this, look at the flight attendant. If the flight attendant looks nervous, then you get nervous. And so that's kind of what we're in right now, Right? We have these realtors that, that are the experts. And you are. And we're the lenders. We're supposed to be the experts. If the customers look at us and we look nervous, they're gonna get nervous. Yes. So we need to look like, hey, this is normal. This is just a market. Let's get through it. We got this, let's go. And if you do that, it calms people.

Absolutely. Well, thank you so much for your time, Mr. Steve. Cowboys prediction for the super bowl, of course.

Well, I mean, every. At the beginning, every year, at the first tailgate, my dad always says, what's going to happen? I'm like, we're going to win the Super Bowl.

Now, of course, you've been wrong 25 years. Congratulations.

Yes. That's as long as dad and I have had our season tickets, by the way, 1996.

Hey, picked a great time.

Great time. No, we'll see. I mean, this Green Bay game is going to be kind of honestly the way to see how the Cowboys season is going to finish. Because you've got Green Bay on the ropes, right? I mean, Aaron Rodgers had basically the worst game we've ever seen him play, Right? And if you're a Super bowl team, you go and put this team down and you put them down hard. If you're still someone who hadn't figured it out, you're either going to struggle to win or you're going to lose. And that's going to tell you drawing board. Back to it.

And what do you think about Lori's comment there?

Well, I was born in Philadelphia, so my dumbass brother is an Eagles fan, and so is this idiot family. So, you know, I've had to deal with that my whole life. So Lori's no different than what I've. I've experienced with my brother painting his face and my nephew being a complete donkey.

Oh, they're just rubbing it in out there. Rubbing it in out there.

You know what? It's okay. Like, I can take it from all sides. Why can't we all just win the super bowl this year?

That's right. There's only one team that gets to have bragging rights the end of the season. It hasn't been the Cowboys for a very long time, but we're gonna still keep believing and still keep getting our hearts broke either way, so. All right, brother. Well, I appreciate your time today. See everybody out there. We'll see you on the next round.

All right, bye.