Saturday Cup of Joe: a lending and tech(ish) newsletter

Friends & Colleagues,

SCOJ. Week #73. Thanks for reading the Saturday Cup of Joe. As always, I’m trying to pass along interesting articles and observations from the week. We had some new subscribers this week and I hope you find the content valuable. Please let me know your thoughts. Always open to improving. The goal is to stay in touch with friends & colleagues but also to not waste our time so that the dialogue is valuable to everyone.

There were several highlights this week. On Friday, I met with James Chapman (@iwrotethehustle) who is an entrepreneur, mentor and business coach. He was inspirational and focused on how to add value, how to approach solutions instead of problems and how to build a legacy, not a bank account. I really appreciated his perspective.

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Follow James L. Chapman

It reminded me of a blog post I saw this week on Medium that told readers to always do harder stuff. The harder stuff is what we respect and what we end up valuing. If you have a choice next week, pick the hard stuff and see what happens.


According to late reports on Friday, the public lending data for all lenders (otherwise known as HMDA data) was released yesterday. One major change I noticed after joining QL is how much attention is paid to the public lending data for the Top 20 lenders. Of the two highlights so far — nonbanks continue to outpace banks in share of the market and at 6%, African-American homeownership trails the percentage of the overall population (13%).


One thing I’ve noticed over the last few months of these emails is where the “good news” comes from and where the “bad news” tends to come from. For instance, CNBC & reporter Diana Olick seem to always take the cautionary or concerning bit of the real estate and housing markets. I don’t know if they are the ones looking at the data objectively or the ones looking for clicks (even when the Russians aren’t involved, it’s tough to tell these days). This week was no exception. posted a story about the growing “troubles” for home buyers. Here are some highlights:

1. Housing prices go up, while sales go down

2. ½ of all inventory is only available to top 1/3 of eligible purchasers

3. 8 million more renter-occupied homes than 10 years ago (Editorial comment: interesting to use a pre-crisis figure).

What if CNBC is the Cassandra in this case? I sure hope not.


Predicting “bubbles” or major errors in judgment/data before they happen is the whole premise of the Cassandra Effect. How to know whether or not to listen to the one expert predicting the worst. Interestingly, The Wall Street Journal also touched on this phenomenon this week in an article about the history of “bubbles” from tulips in 1634 Holland to housing in 2008 America.

Included this week:

· Of Interest — A new mortgage product pays down student debt with rebate

· Amazon HQ2 Update — Detroit unveils a “day one” teaser trailer

· Next Belt — Couple highlights from Detroit

· Millennial Minute — Overseas small balance lenders are innovating credit risk

· Walk the Talk — Open-minded is where it’s at

· Quirky Story — A new addition to Central Park is floated

· Today’s Thought, the Quote and bonus

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As seen on author Adam Grant’s Facebook page this week

Of Interest: Ever since speculation about CFPB Director Richard Cordray’s political future in Ohio began to seriously focus on his leaving CFPB to run for Governor, the industry has been wondering what the future of his RESPA interpretations will be. One of Cordray’s consent orders — the $109 M penalty against PHH — remains on appeal in federal court. Several other orders reflect the Director’s personal RESPA interpretation but may or may not reflect the legal interpretation under years of official RESPA guidance.

Just as a quick reminder, RESPA prohibits giving a “thing of value” to “a person” in exchange for referrals of a real estate settlement service (such as financing, real estate representation, title work, etc.). Rob Chrisman wrote this week about Eagle Home Mortgage who in concert with Lennar set up a program allowing new homebuyers to use a rebate to pay down student loans. According to an article, “Borrowers who used Eagle Home Mortgage’s Student Loan Debt Mortgage Program can direct up to 3% of the purchase price to pay their student loans, but only if they buy a new home from Lennar.” Look, I’m all for new home buyers getting a good deal particularly when it doesn’t drive up the cost of their home loan. I’m also always a fan of any arrangement that benefits the consumer. However, doesn’t it seem odd that companies from all corners of the industry are running sophisticated and highly conservative RESPA analysis on all their arrangements with 3rd parties and a builder can offer an incentive conditional upon the buyer’s use of their mortgage company? Granted the ‘thing of value’ is going to the consumer so everyone wins, but how many other arrangements have been questioned when only the consumer benefited?


Amazon Update:

Detroit — Dan Gilbert co-hosted CNBC’s Squawk Box Friday morning and debuted Detroit’s “teaser trailer” for our #AmazonDetroit pitch. The video is available on Bedrock Detroit’s Facebook page and/or my Facebook page. Or here. Our first narrative — Come to the city that turns one day becomes day one!

Detroit — thought I’d include a personal appeal from W. Ethan Eagle to Jeff Bezos. His conclusion? Detroit may not have what you think you want but Detroit has “what you need.” Belief is spreading. Amazon #InTheD.

Cleveland — Perhaps the best example of the catch-22 for cities that cannot compete. As a #NextBelt city, Cleveland has the building space, history and story to capture the attention of a company like Amazon. Unfortunately (at least according to this article), Cleveland does not have the confidence, organization or assets to pull it off. But they still have to bid! That’s the catch-22. Not bidding at all would be an obvious sign of surrender. Yet, it already seems to be a waste of time. I hope that’s not the case. Maybe the author of the above link did not have the sources to get the real story of the bid. Otherwise, it should looks like Cleveland is out.

Denver — Yes, Denver was selected the first weekend by The New York Times as the “winner” of the Amazon HQ2 sweepstakes. Since then, it has gotten much more complicated. This week the Detroit Free Press sent a reporter to Denver to compare the two cities.

South of the border:

Here’s something from Birmingham, AL:

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North of the border:

Vancouver — HQ2 a few miles north of HQ1? That’s apparently what Vancouver is thinking. To say that everyone is getting involved is an understatement. Vancouver’s Economic Commission will be coordinating a $50,000 bid, which brings me to another of Detroit’s advantages — budgets and expertise. Many American cities, like Vancouver, are using the local/regional Economic Development offices whereas Detroit is using resources and experts from all over the city and our companies to put The D’s best foot forward.

Halifax — According to Halifax’s own assessment, the city is the smallest competitor (so far) looking to submitting a proposal. At 403,000 people, it doesn’t even meet the RFP’s minimum metro area requirement of 1 million people. The mayor, nevertheless, made this pitch. 1). 3,800 new residents (mostly millennials) and 1,000 Syrian refugees of the local university 20% are international students 2). Low property values especially as compared to Toronto & Seattle. 3). 60 ocean-tech related companies located in Halifax.


#NextBelt: Handful of quick hit articles from Detroit:

Detroit hosted several high profile CEOs in concert with the Internet Association and Presidential advisor (?) Ivanka Trump to announce a $500 million investment in STEM educational resources. $300M from the Internet Association’s high profile members like Google, Apple, Amazon, Microsoft, Quicken Loans, and Lockheed Martin & $200M from the US Dept of Education’s federal budget.

Further proof that we have things happening here #InTheD. We have a trade group! Detroit Fintech Association.

Disruption. Old School style. The Athletic, a subscription-based hyper-local sports website, opened an office in Detroit and will begin covering Detroit professional sports & Michigan and Michigan State for about $50 a year. I love the idea of the sportswriter, the beat writer. The business model also makes sense in a niche market world where certain consumers will pay for quality and depth. Do you think it has a chance in your favorite city? Apparently there could be plans to cover DCFC, the semi-pro soccer team in town and of course, if Detroit gets a MLS expansion team, the site will expand to cover it too. Interesting stuff.

Disruption. New School style. Ozy named Detroit and Miami the #next top choices for foodies. #NextBelt isn’t just replacing Rust Belt because we’ve transitioned from industrial manufacturing to digital manufacturing but also because Detroit, Pittsburgh and Louisville are becoming food destinations as well. Detroit and Miami being named together was interesting because it puts Detroit back in the conversation with places like Miami as destination cities (granted for two different types of tourists, but still). On a personal note, I had one of the best meals I’ve ever had in Miami — the chef’s tasting menu at The Bazaar in the SLS South Beach. Some of the most amazing combinations, flavors and textures, I’ve tasted. And now living in Detroit, I enjoy exploring the city’s great restaurants. My favorites include Grey Ghost, Wright & Co., Central Kitchen and Craftwork.


Millennial Minute: This week’s millennial update is less about actual millennials and more about thinking like a millennial. Several startups overseas, particularly in markets like Africa, are deploying algorithms for establishing new, alternative risk assessments to allow fintechs to lend to individuals for farms and other subsistence businesses. It’s revolutionary for those people and those economies. It also is a great place to watch for new, innovative ways to measure credit risk. You’ve heard me write before and this is another good example, valuable lessons are everywhere.


Walk the Talk: The ability to change your mind is a superpower. Hyperbole, maybe? But I like calling the willingness to change one’s mind a superpower because it highlights how difficult it is and how unlikely it is. In this analysis by Farnam Street, you have to ask yourself — where do I fall? Open-minded? Interesting in questions (versus statements)? Thrilled by debate? In the end, it is open-minded people who are genuinely curious and focused more on understanding than being understood. A quote to remember is, “Closed-minded people are more interested in proving themselves right than in getting the best outcome.” The idea is that there is a healthy balance between self-aware, confident and open-minded. Find your sweet spot and own it. Respect data & experience but always remember that understanding & listening provide the fullest picture of life and support the best foundation for decision-making. As leaders, we have to be open-minded to ensure we’re seeing to understand, building trust and empowering those around us to their highest potential.


Quirky Story: Architects have proposed building a 712 foot wooden cone-like tower in the Jacqueline Kennedy Onassis Reservoir in Central Park, NYC. Inside the tower would be a wind turbine capable of filtering the reservoir’s water. Complete with tourist viewing platforms it would be a stunning addition to a NY landmark. Click the link for renderings.


Today’s Thought: Say the thing & say the extra thing. Too often we bite our tongue or hold back when we’re confident and certain of something. There are many reasons why. Might be courtesy, lack of energy, or hesitation. Too often the biggest gap between what we want to do or say and what we end up doing or saying is simply articulation. We do not articulate the full depth of what we want to say. Next week I’m working on “saying the extra thing.” This does not mean ignoring diplomacy or ejecting thoughtfulness; instead finding a way to provide direct & candid comments making sure everyone is on the same page and has been heard. When in doubt, say it.


Quote: “He who overcomes others is strong; but he who overcomes himself is mightier.” — John Henry Patterson


Bonus Content: I’m always drawn to the intersection of design (art) and data (information). One of the most beautiful examples of that this week was a drawing from Minna Sundberg tracing the history & relationships of languages as a tree. Really cool.

Continued success,

Written by

Thinker, curious leader, once an attorney…always trying to answer well.

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