Coffeez with Joe Shalaby - How to be Leader in your Industry ft. CEO Wes Yuan | Coffeez for Closers with Joe Shalaby Ep. 20

Starting point is 00:00:00 What's up everybody? Welcome to another special episode of Coffees for Cozers. Today we're going to dive deep into fintech innovation with the focus on the mortgage industry. And joining us today is the founder, CEO, and visionary of LendingPad, a company that's totally reshaping the landscape of the mortgage industry with cutting-edge technology and a commitment to making the loan origination process seamless and super easy. for not only brokers and lenders, but for the consumer experience. Under Wes's leadership, LendingPed has not only emerged as a modern loan origination platform, but it's also been a beacon of innovation within the mortgage space.

Starting point is 00:00:47 Today, we're going to explore Wes's journey and the challenges he's overcome as an immigrant and how LendingPad is setting new standards in efficiency and client support. And without further ado, welcome Wes Yon. Thank you, Joe. So glad to be here. Thank you so much for attending. And, you know, we're really, really blessed to have someone of your stature attend today's coffees for closers. And most importantly, really shed light on the things that the partnership that we're going to launch and the future innovation that we're going to collaborate on. So let's just dive right into it. Now, very, very easy question.

Starting point is 00:01:26 What is it that makes Lending Pad special when there's a bunch of other loan origination softwares? Sure. Well, as you know, loan origination software is a very dated industry. So there are very large players in the space, there are a few, and then there are smaller ones, a whole bunch of them. And we've known, we've been known in the market for speed of implementation, for flexibility of integration, the choices that loan officers can make to connect their own stack, as well as ease of administration.

Starting point is 00:02:00 So you don't need a full-time, for most part, you don't need a full-time administrators to administer the system. And also, the deployment speed is extremely fast. So we can deploy the system within typically traditional iOS, it will take you six months. You know, we can do it maybe in two months or so with all the rules built and so on. So those are, we've been known for those. The deployment and implementation. Yes, that's right. Let's talk about like the archaic, how archaic the mortgage industry is in terms of, you know, innovation, speed, you know, like, because we all know that the mortgage industry is kind of like lagging behind many fintech companies.

Starting point is 00:02:42 Why do you think that is? So there are a lot of players in the mortgage file, as you know, you know, from the consumers to the long office or processor too. So the whole manufacturing process takes maybe 10, 20 people. plus a merit of regulations, you know, laws as compounded on top of each other. So it makes the whole process very, very just difficult in general to kind of get through from origination all the way to secondary market. And that's why we decided to kind of come forward to create a system, LOS. That's your system of record that can compress the space between the secondary market and primary market. and a lot of that, you know, has something to do with, you know, why is so complicated?

Starting point is 00:03:32 Because the number of hands in the process, the regulation that's overseeing the process, and just, you know, in generally the difficulty of underwriting, you know, the documentation that's needed to make one mortgage loan happen from beginning to the end. You know what's amazing about lending pet is like, and I know we started the journey of like chatting with you guys years back, but now you're not just an LOS for mortgage brokers, but you've also incorporated the mortgage banking component, and that must have been a huge undertaking to accomplish that. So how did you do that?

Starting point is 00:04:03 Like how did you build out a platform for brokers and now also bankers, because that's not just something that you can easily do. Absolutely, yeah. Luckily, I had some experience in mortgage banking. I have maybe 10 years of mortgage banking experience, and also equivalent kind of in the mortgage brokering space as well, and then also commercial banking.

Starting point is 00:04:23 So, I guess you work long hours and many, many files, and you kind of see the process from within. And there are, I would say our product covers both brokering and banking side, but there are three pillars, what we'll call three pillars, that's similar to all shops, regardless, you are a broker or a banker. One is the origination aspect of it, right?

Starting point is 00:04:47 How easy it is for the consumers, how easy it is for the loan officers. And then there's the manufacturing process, which is the operation aspect of it. You know, that's from processing to underwriting to funding, right, and to post-closing and so on. And then there's the compliance aspect of it because every step along the way, you know, there are more than 1,000 statutes really that applies to mortgage lending, a different type of consumer lending. So every step along the way. But the three pillar covers both audiences. We, you know, because John from past experience and also the details that we encounter, that we try to build it into software to make it better, you know, all on all, basically.

Starting point is 00:05:33 You're always innovating on that front, huh? Absolutely, yeah. And as you know, the manufacturing cost for the loans are very high right now. And, you know, those costs from the front end, from the brokerage end, you know, we might think it's the lenders issue. And then, you know, of course, the lenders are putting those costs in, in the rate itself, right? And to recover those costs.

Starting point is 00:05:57 So having a good system, have a good process, good people driving that system would be the, I think it would be a key sets of ingredients to make this work. So now talk to me about the innovation side. So how are you guys always so innovative? Like I remember hearing about Lending pad years ago. and it was like, people were like, oh, this is a different world. How have you always been on the forefront of innovation in fintech? Sure.

Starting point is 00:06:25 I think what this industry, again, is relatively dated. You know, there are several big players and there are a lot of smaller players. We, you know, we really kind of, we draw, you know, we put it on the blueprint. We want to be the innovative company. you want to compress the space between secondary market and primary market. We look at different processes. We put it, you know, we look at the competitors' product. And the competitors certainly also make us better too, right?

Starting point is 00:06:57 So there's no one that can do it all. So we really kind of try to speak the truth on every single element of the product and do better. You know, so that's really how you stay in the front. Yeah. Look at the details. And I always say the detail matters, right? So that's really the ultimate goal is to look at every single step. And also having kind of the holistic view of the whole process and the issues along the way,

Starting point is 00:07:24 then you try to design those things in your product to make it better, you know, and every single detail better. What are some of the big hurdles that you've had in creating such an efficient platform? No, I would say hurdles as in, well, come back to three things, how to originate better, faster, more accurate, how to stay compliant along the way, and how to make operationally, from a company perspective,

Starting point is 00:07:54 the controls that you need to have. So I would say the hurdles that we have is, every software is designed for a specific audience, right? And so our LOS really covers a wide range from brokerage, from the one-man brokerage to a large shop, to mortgage, to mortgage, shopping shops to a hybrid to delegated shops to wholesaler. So those are our challenges. Checking all those boxes is like impossible. I haven't really, you know,

Starting point is 00:08:22 seen a platform that can cover that, especially big shops like ours, you know. And what I've noticed is, you know, the very big and the very successful companies are using your platform. Yes. Why do you think that is? Like that's, that's what an honor to be recognized for that. Yeah. Thank you. And they grow on those platforms. as well. We have enough data now to see. I think really just focus on the client's needs, you know, specifically what details they're having pain with. We always say that you have to lift the pain, you know. So I'll give you an example. Most of our staff have either mortgage background or

Starting point is 00:09:02 some type of certified mortgage background, you know, mortgage education. So this way, when a client tells us they're paying, we try to live through their eye. basically and then we roll up to a product view and then through the architecture view and through another round of review so on all when we design the product for you know larger growing shops you know we kind of look at these details and these feedback and then quickly make improvement as you know that there's a lot of systems they they promise the whole world and they don't deliver or they say they're going to improve but it takes five years to do it so you know of course we also have a long list of items that we wish that, you know, that could be done tomorrow. But, you know, you kind of look at

Starting point is 00:09:46 this whole thing holistically, look at the feedback very carefully and improve the product. And but do nothing but improve the product. You know, that's what, you know, how we overcome the challenges and over the years. Yeah, you know, honestly, I really appreciate your guys' and honesty because I remember a couple years ago when I approached you guys and people were telling me, oh, you got to get on Lending Pad. And I said, listen, we're a banker. Like, they're like, well, our model is not really ready yet for mortgage banking. And you were candid. Like you could have told me the same thing as the platform that we're on now.

Starting point is 00:10:17 So yeah, yeah, come on board. We'll just make it work. And we'll just figure it out along the way. You guys were like, not yet. We are building it and we'll be ready by. Sure. And you gave me the date, you know. So being candid was very, very important.

Starting point is 00:10:31 You know, especially as a business, you know, you have your reputation to stand on. And that's something I really admired is that you guys were completely transparent in your dealings. You weren't like misleading any of your partners. Yeah. And we understand it's a product. You have to live with a product afterwards. You know, so we take that relationship part of it too. So philosophically speaking, when we are dealing with our employee trainings and so on, you know, from sales to support, you know, to service side of things. We understand whatever we promise you from day one is what we need to deliver on, you know, day 365, one year into the system, two year and three years. So we kind of know that we cannot over promise and that under deliver.

Starting point is 00:11:15 It should be the other way around. Yeah. And from our marketing, it's just, it synced into the company culture. We don't ever over promise. If we don't have it, we don't have it. But, you know, possibly what we can do it this way, maybe an alternative, maybe a timeline, right? So those things, we take it to heart. A lot of, I feel like a lot of vendors on the market today, you know, the marketing goes out first. You know, I kind of book the sales and then, you know, lift that the promises later.

Starting point is 00:11:44 But that's not our model. You know, we kind of, but we will listen to your feedback because. Yeah, yeah. And that's something I appreciate about you guys. And it's significant.

Starting point is 00:11:53 It's really been a major determining factor for us. Because this is, this is probably one of the biggest decisions we as a company are making. So not only did we make this decision with very calculated, but we thought this out, we thought out, you know, how we're going to make this work and how we're going to scale this because, you know, we have close to 900 loan officers right now as of, what, February 6th. So, you know, depending on when people hear this, it could be a thousand plus people. So I'm going to talk about, like, your journey and who you are as a visionary leader. So I know you're like me, you're an immigrant.

Starting point is 00:12:33 You came when you were a young guy. and, you know, you started in as a realtor, correct, in the 90s, and then you became, in college, yeah. And then you became a mortgage broker. Yes. And then you became a banker. So you transitioned from a banker to a mortgage banker. And then, and then you became a chairman of a nationally recognized bank. So tell me about that journey.

Starting point is 00:12:59 Like what inspired that? Sure. Well, you know, in college, it pays the bills, you know. that's always, I started part-time for my broker. But on the trips to different houses, clients would ask me, what's the mortgage payment? You know, and back then, it just so happened. I was a math major, so kind of, you know, kind of instantly telling what the PI payment is for whatever loan amount. It comes pretty quick for me.

Starting point is 00:13:28 I mean, it's pretty much, I don't think. So after that, it was, so naturally, I went. into broker space, brokerage space. And then, you know, banking knocked down the door, and we also operated as hybrid mode for a long time. And that was early 2000s, I think. And we did well. And we sold the shop to a PE firm,

Starting point is 00:13:53 a very large, reputable PE firm. Wow, so you grew a big brokerage. I wouldn't say it was big, but it was profitable. I mean, you know, it was efficiently ran. And part of the system that's in lending, had today was used in the mortgage banking shop and broker shop at those years. You know, so part of it, you know, we have to retool it for the market. But, and then somewhere along the way I got involved with a national bank called Dominion

Starting point is 00:14:20 National Bank. I inherited that bank from kind of like acquired the charter type of thing. They call it change of control. I did that for a number of years. and then, you know, kind of lending pie was funded about seven years, eight years ago now. So, but the lending pie was a system through due diligence from the mortgage shop sale, you know, that the PE firm discovered and kind of opened it with us together because they kind of see the efficiency that drives through the mortgage broken banking shop.

Starting point is 00:15:03 much efficiency and so much lower cost per loan basically. So and they thought that the product was a good idea. And of course, when we took it to the market, we have to kind of retool the whole thing pretty much, you know, kind of making a one single tenant application versus like multiple tenants is a different type of approach in architecturally. But a lot of fundamentals like origination, compliance and operation, those pillars are the same actually throughout the, you know,

Starting point is 00:15:33 the progress. So that's essentially how this product came about. So it started at the National Bank, like a microversion? Not the bank. The bank I was just involved as a director, but it was the mortgage broker and a lending shop that had for about 13 years. Did you create, like a mini version of lending pad at that point for your own operational efficiency? Yes. So then in 2016 is when you created lending pad, right? Or is it 2017? 2016. 2016 and then so it was a so that you had the baby version for your own shop of landing pad you weren't operating on calyx or anything you had your own prior proprietary platform correct and then in 2016 you're like i need to take this to market much to the sales acquisition advisors you know how did you take a l-o-s into the mortgage market at you know how did you penetrate the market it was hard i mean you know my mentor told me expect to be miserable for the first 10 years and I think it's almost 10 years. So but but but it was difficult.

Starting point is 00:16:42 But I think you know for most part we well we had we started with one blue chip client. So that was very it was the mortgage shop sold to the PE firm so that the PE firm became the first blue chip client. So that was a little bit easier. So we have at least one client and then we started taking to market and just sell first first 50, 100, you know, kind of focused on client relationships. I mean, we still keep in touch with the very early, the first, the second, the third client. We still are very much involved in their, you know, in the conversations every, I say,

Starting point is 00:17:16 every quarter, so we touch base and a lot of their feedback, you know, and I always remember whatever you promise, you got to deliver. So, you know, and that's how you keep old friends and make new friends, right? So that's how we came about it and came here. So that's, that's, I mean, it was hard. I mean, it was a lot of headache and, you know, a lot of manpower, a lot of resources, but you just have to do it one at a time. And, you know, making sure that you keep the relationships, you know, making sure that you deliver what you say and excel, you know, and exceed that expectation to the best that you can.

Starting point is 00:17:54 Yeah, I mean, listen, you're not a sales guy. You're computer scientist, right? So you really had to get uncomfortable with. with selling. You had to sell this product. So, like, how have you managed your level of uncomfortability in this journey of success? How have you managed that? I think everyone sells to some extent, you know?

Starting point is 00:18:16 I sold myself to my wife. I always said. Best sale ever. Yeah. And I think everyone sells to some extent. And that's a part of the skill everyone should have, you know. And I think there are different styles of selling. But, you know, I just, I would, you know, I would just, you have to get uncomfortable.

Starting point is 00:18:38 You know, even product, you know, like even running the company, even though we have a very good market share now, you know, but I tell my team, don't ever get comfortable because technology is today is one thing and tomorrow is another thing. So, you have to stay ahead. You know, don't get ever get. So in terms of ideas, innovation, listening to customers, look at what's in the market, look at what's coming up, how the industry, we, we. evolve, all of that, you know, we'll say that those are the fabrics of the culture of the company is that you don't get comfortable, you know, ever, you know.

Starting point is 00:19:09 So that's part of the company culture. So describe to me the company culture, because I heard a lot of good things about your company culture. And I know that you guys, you know, you're, there's a deep bond between you guys. Lending pad people or the employees that work there, they're big advocates of

Starting point is 00:19:25 lending you've had. So describe to me the company culture. Sure. And I think first of all, the team, your service by a team of almost family-like, you know, type of team. So we've been with, most of us, been with each other for five, six, ten plus years, and we've seen the children grow up and so on. So having to be serviced by those type of team, you know that, you know, that we all can communicate, sometimes even in a non-verbal, non-communicated, like we know what we're thinking.

Starting point is 00:19:56 And in that sense, that it creates a lot of efficiency and also good culture to drive you know and from within right from how we build the product to yeah service and i think our clients can tell and i think that's another reason that's part of the growth so i look at the company same as you do you know people process and system you know do i have a good system do i have good people do i have good process and only the three work together in tandem then you you can create something great so that you know but the culture in general we try to kind of i mean i think the culture realistically is be telling the truth, you know, and I think we also have to hold each other accountable,

Starting point is 00:20:35 right, because you've got the high performers, you've got middle, and you got the lower, you know, performers. So you have to speak the truth and the culture is, and sometimes it's uncomfortable. I'd be honest that, you know, that you, but I try to manage to some, you know, kind of to the truth-telling aspect of this and in every decisions that we make. And a lot of decisions, actually most of the decisions are made jointly. So it's more of a collaborative, fail, safe environment. We encourage participation from all employees. So, you know, someone tells your experience from products,

Starting point is 00:21:12 from support side, maybe directly through the CTO side, the product side, and the product team will go, you know, kind of look at those things altogether. So having that type of internal culture that's transparent, that's truth-telling, you know, that sometimes is uncomfortable, but hold each other accountable for. I think those are the culture element in our organization. It's really no secret.

Starting point is 00:21:38 I think a lot of successful companies are the same, you know. The pillars of success would be, you know, really everyone performs at their maximum capability and more, you know, and they encourage an open, positive environment and a good communication. you know, so those will be our culture. Nice, nice. A client can tell. Yeah, and we definitely sense it.

Starting point is 00:22:01 We definitely sense it. And we know that there's a lot of collaboration going on with your company culture. So let me ask you this. What's the plan for market share? Because there's a lot of market. We have, what, 100,000 LOs. There's, you know, you've got all the top brokers, probably some of the, so how much market share do you guys want? So we have, we feel like we have a very good brokerage market share.

Starting point is 00:22:24 We, you know, we still have a long way to go in terms of banking and so on. I would say that, you know, our goal is to double the market share in the next two, three years. Do you know the percentage of market share you have now? We calculated the originated loan amount in the system, about 5% of the market. I would take it off. 5% of the national market share. The total market, yeah. How many trillions is that?

Starting point is 00:22:52 I think you look at the NBA data. I don't have this year's data because it's so new this year. But, you know, I think last year was, I think, 1.7 or something like that. $1.7 trillion in 2023. Well, that's amazing. So that's what was originating through lending ban. No, well, a small percentage of that, you know. Oh, 5% of $1.7 trillion.

Starting point is 00:23:11 Yeah. Yeah. Well, give a take, there are some fall through and so on, right? The 1.7 is closed loans. But I haven't checked my data, you know, like all that close. No, but listen, if you want, 10. 10% of national market share when there's, you know, there's Calix, there's encompass, there's arrive, there's, I mean, there's all these random ones too. And then you guys are, you guys are the big

Starting point is 00:23:32 players in the space and you're gaining more market share by the day. Yes. I mean, to acquire a couple like, you know, to get eMortgage capital on your platform and then all the people, all my competitors, we're watching this show right now. We're probably going to jump on after this. You know, there's a system for everyone. You know, we always have open again. and the truth-telling culture is, you know, what can we work with you? And you guys were on a trial. You know, we give all the big shops, you know, access to trial. And don't sign it until you like it, you know.

Starting point is 00:24:04 And that's our quite different, right, from the traditional sales channels. They log you in for 10-year contract. We have none of that, you know. I mean, we do have some just because of the level involved to service the market, service the whole infrastructure. I mean, it does have substantial overhead involved. but in general we let you try the product out before you sign up, you know, and we realize that whatever we promise you, again, is what we have to deliver and more.

Starting point is 00:24:32 Every good company does it that way. Like there's no lot, we don't lock you in. We have to compete for your business. That's right. And that's the mentality. Don't get comfortable. We have to compete. Earn the business.

Starting point is 00:24:43 Yeah. Right way. I love that. I love that. And then let me ask you this. What is the transition for a new person switching from her? arrive or from Calix or from whatever LOS, how is that transition and how do you support that person and overcome the mindset that they have in that transition? Because a lot of people are

Starting point is 00:25:03 scared to transition. So describe to me that transition and that transitional support that you offer your team. Sure. First of all, change is hard. No one wants to change, right? So once you're comfortable, you don't want to check. So we understand that to support that transition, from really the service team or the support team side from onboarding to support, we'll give you an example. One of our policies is one of our support channels, life support. For the first five loans, we want people to jump in life support, you know. You get someone to answer your call, walk you through shoulder to shoulder.

Starting point is 00:25:39 You know, so once you do five loans or so, it becomes pretty easy. And we've had the statistics all played out. pretty well, you know, so a couple of months immediately, they pick it up, you know, and, and our system tend to attract the more seasonales for some reason, like they pick up faster than the ones having a little lesser experience in the industry. That's also a statistic we interested in learning, you know, but in generally speaking, we'll try to make it as, we will be there as much as you need us to be to kind of walk through the files. That's the transitional aspect of of course the training the support you know the not having you wait

Starting point is 00:26:22 when the file needs to close we'll try to get the answer as quickly as possible internally they will have different it's called skill-based routing systems going on you know it depends on what what kind of expertise you need that we try to zoom down the expertise for you in real time you know if not we may need a day or two to get back to clients but for most part to help them transition that's what we do the training the support the the walkthrough, you know, and then once that beginning period is over, usually user pickup right away. That learning curve is what I call a J curve immediately. It's an exponential pickup. And then the more they use it, the more they feel like it's easier so that we have that type of

Starting point is 00:27:05 feedback as well. So it's just getting that initial threshold. It's like I always tell, you know, tell my kids, you know, the workout, the hardest part is to be willing to go. go to, decide to go to the, and that's the first step. You know, once you take the first step, the rest of it, same as scaling the business, same as a lot of other aspects of the business, the same, you know. But once the mindset is open to learn, then it becomes much easier and it will help the users to transition that way. I want to congratulate you on your recent awards.

Starting point is 00:27:38 You were just nominated for the Housing Wire Tech 100 and then for LendingPad. and then you were also nominated for, was it, housing, you were nominated as the Housing Wire Trendsetter for last year. I mean, that's amazing. Good honor that we appreciate Housing Wires, yeah, awards, yeah. No, we try to kind of focus on the product and I always say, you know, at the end of the day is the product and it's the service, you know. So, but, yeah, we appreciate the honor, you know, whatever we can do to advance,

Starting point is 00:28:16 you know, advanced this part of the industry is what we were happy to see that that's being placed out and that's been getting more and more recognition. But recognition set apart, you know, we're actually razor focused on the product, you know. So we had a little celebration and that's about it. Yeah, it's like little seven minutes and we're done. Yeah, we're done. We're on to the next thing. Because that doesn't matter.

Starting point is 00:28:39 You know, I think we still have a long way to go. So, you know, from- I love that mindset. I love that mindset. And that's a winner's mindset that you guys have. Never gets that, yeah, comfortable. So, but yeah, it's served us well. But, you know, again, we got a long way to go far from where we like it to be.

Starting point is 00:28:56 But I think we'll get closer. One thing I like to close the podcast on, it's a personal, a couple personal questions is your goal. So tell me a personal goal that you have, a family goal that you have, and a business goal that you have for lending pad. Wow, that's a hard question. I know. Those everybody off a little bit. Yeah. So the personal goal, I would say that, you know, kind of, you know, I'm pretty happy personal goal-wise.

Starting point is 00:29:27 Actually, you know, I enjoy what I do. So personally, I think between, I guess, balanced is a way to put it, you know, balance between the personal side of things and career side of things. I think, relatively speaking, I'm happy where I am. So I think it will continue on maybe healthier. And the second one is the family goal. Of course, you know, seeing the children grow up, be healthy, happy, and that's generally the goal and continue to be goal.

Starting point is 00:30:04 The goal. And then the third one is... This is your business goal for Lening Pad. What's the vision? What's the goal for? The vision would be, you know, a better product. And I think build it more. better product, you know, kind of larger market share, of course, and advance the industry in

Starting point is 00:30:21 general, actually, you know, to our part to advance that small piece, one at a time type of mentality. So those are the personal advancing an entire industry and the landscape of an industry. You know, it's limited, but, you know, we'll do what we can to advance that. You know, it's not that limited. You got, you know, you got a lot of people backing you up. You got a lot of support. And you got a great product. And thank you so much for.

Starting point is 00:30:45 attending the podcast. Thank you for coming on, Wes. I know your time is precious. You flew all away from Washington, D.C. Thank you for watching everybody. Wes Yon, founder, CEO of LendingPad. Awesome. Thank you so much. Thank you, Joe. Thanks for having me.

Coffeez with Joe Shalaby - How to be Leader in your Industry ft. CEO Wes Yuan | Coffeez for Closers with Joe Shalaby Ep. 20

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