Vaultedge newsletter - Jerry Maguire or Mike Lyon?

March 21, 2021

To Our Clients, Colleagues, and Friends:

  • Earlier this week, I watched Jerry Maguire for the umpteenth time. The movie has some great lines, and every time I watch it I get goosebumps. I am not talking about the "You had me at Hello" or "You complete me" lines, though they are pretty touching too. I particularly like the lines of Jerry Maguire's mentor, Dicky Fox. The best of all: "If this [points to heart] is empty, this [hits own head] doesn't matter." Check all his lines here.

  • If you haven't watched Jerry Maguire, then you should watch it. But if you did, then the next best thing to do this weekend is listening to Mike Lyon, CEO of Nexsys Technologies in the latest episode of Mortgage Vault. In this episode Mike talks about his foray into the mortgage industry, his journey with Quicken Loans and Nexsys, how he applied automobile assembly line concepts to dramatically improve lending efficiency within Quicken Loans, what the lenders missing out by not adopting digital closures and more and if 2021 would be the year when eclosings will go mainstream.

  • I first met Mike at an MBA conference in Phoenix (yeah, in those pre-covid days when you could actually meet people). Nexsys had a stall in the conference and he would not let anyone pass by the stall without giving a beautiful pitch on why eclosings is the best thing to happen to mankind :) The fact that inspite of being part of Rock Financial/Quicken Group, he was doing that himself truly impressed me. Check this episode, you will like it. Listen in on Apple podcasts, Spotify, Buzzsprout.

  • The $1.9 trillion America Rescue Plan that the Congress passed has lot of measures that extend protections and provide assistance to homeowners and renters that are facing foreclosures and evictions. These are welcome measures. However, such measures also bring significant operational challenges for mortgage servicers & demand immediate action. We specifically identified three challenges that ned to be addressed. Read about them in our blog here.

  • There is a lot of discussion peppered with dire warnings about the rise in cash-out refinances. The implication seems to be that this is destined to wreak havoc on the housing market and the economy at some point. Cash-out loan volume indeed has been growing over the past few years and it is also true that we have a recent history of excessive equity extraction. But there are several critical reasons why the recent uptick in cash-out refinancing is nothing like the cash-out boom of the early to mid-2000s. See the graph here. For more on this topic, check out Freddie Mac's very well written article on Refinance Trends in 2020.

  • Early this year, New York Times published an article with a thought provoking title - Why Markets Boomed in a Year of Human Misery? To quote from the article - "It’s a macabre spectacle. Asset prices keep reaching new, extraordinary highs, when around 3,000 people a day are dying of coronavirus and 800,000 people a week are filing new unemployment claims. Even an enthusiast of modern capitalism might wonder if something is deeply broken in how the economy works." It turns out nothing is really broken - its a mix of factors: Personal income increased (taking into consideration government stimulus), spending decreased (because there is no where to go and spend money) and savings increased. That means, there was just more money looking for investments. So markets were just functioning as they should.

Have a great weekend!

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