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

Friends & Colleagues,

SCJ56. Turns out June 2 is National Donut Day and June is National Homeownership Month, according to the President Trump. Free French cruller with your 30 year fixed? A free appraisal with your blueberry cake? The good news is that June’s just getting started. Let’s finance some houses.

Seen on the Internet

The short week was incredibly busy. I don’t know if that was 5 days of work in 4 days or just everyone’s excitement for the weekend starting around Wednesday. Unfortunately/Fortunately, we’re going on vacation next week. Unfortunately because that meant I was working well into Friday night to get everything off my plate.

In the next few weeks or so, I’ll be watching FHFA’s recent request for information (RFI) on limited English proficiency (LEP). The FHFA surprised a few industry advisors by weighing into this somewhat complex and fraught issue. But it is just a RFI. The first time I looked into the LEP issue I spoke with IDEO the design firm in Silicon Valley and language translation is expensive and requires native translation. In other words, each document translated into each language must be done manually. There’s no software translation that’s reliable/accurate for legal purposes. So, before you even get to the question of recording loan documents or relying on loan documents in court, it might not even be reasonable to originate a loan in a foreign language.

Otherwise, I hope you have a great weekend and productive upcoming week.

This week we look at:

  • Millennial buyers & trends (Of Interest)
  • Managing nationwide housing stock is not easy (Got Me Thinking)
  • Detroit trying to redefine city (This week in Detroit)
  • Detroit, an innovative city (A Look Ahead)
  • Let’s buy a town (Walk the Talk)
  • Moment of non-business
  • Thoughts, bonus and quote (all the way at the end)

Of Interest: It wouldn’t be another week without something about the treatment of millennials in the media but, in particular, I like to find the stories that relate to home buying and real estate trends. This week I found an interesting recap of The World Government Summit. Though it is a somewhat loaded title, admittedly, before you panic just remember there are valuable lessons all around us. The panel of interest at The World Government Summit spoke to millennial trends in business and marketing. The trend with Millennials and Generation Z is toward experiences not products. Even when younger generations do purchase products, we’re more likely to spend “5–7 days online” discussing what company has the best culture, materials and/or social conscious. One speaker said millennials are “more apt to ignore a new Nike ad and instead buy a new pair of shoes from a company who will turn around and help those in need in Africa. It’s this behavior that is clearly changing the playing field for all companies, new and old.” What is your industry or business doing to think about this trend?

Now, let’s think about those larger cultural trends in the context of evolving technology in our industry. Zillow and several partners announced a pilot program to offer “Instant Offers” which are cash offers from investors and home buying businesses. The two known partners, at this point, are Invitation Homes and OfferPad. These companies offer to immediately buy homes listed on Zillow and/or in pilot areas (Vegas, Orlando, Phoenix, Salt Lake and Tampa).

On one hand, these types of things are very consumer-oriented. There’s no harm in offering, right? At the same time, we’re coming off almost 10 years of shake-up and focus on consumer protection & regulatory compliance. We all know our industry is behind the technological 8-ball here. Quotes like this from the co-founder of OfferPad, Brian Bair, should give us all something to think about, “The rise of technology in almost every aspect of our lives has created a new type of home seller — one that knows the process can, and should, be easier and less stressful. Zillow has long been known for its dedication to the consumer, and the test of this new marketplace introduces even more transparency for its users.”

As seen on Facebook


Got Me Thinking: Is anyone looking at the broader strokes of the American economy to command an articulated strategy? Whether that’s the President or Chairman of the Fed in consultation with the President or even some widely respected outsider (think, Warren Buffet), there is no strategy. We’re playing prevent defense. You know what they say about winning versus trying not to lose. BloombergView published an opinion piece by a former FED advisor that touched on some of the issues at play between housing debt, household debt and overall economic drivers. Even while home sellers slightly outnumber home buyers for the first time in over 10 years, the general trends might not be as healthy as that stat, alone, would indicate.

For instance, the author writes “the average household budget shows that sky-high housing costs bite more than any other line item. Housing devours a third of average household spending, while auto payments command half that amount. More than any other considerations, these costs matter — where to sleep at night and the means by which to get to and from work.” So, while we’re entering a time where more houses are on the market, buyers might not be ready for the purchase. According to a FED insider, the “most regrettable is that policy makers inside the Federal Reserve were aware of the pitfalls of being complicit in hampering the clearing of the housing market and providing incentives for subprime car lending. The sad truth is the optics of stifling clearing and encouraging borrowing among those who could ill afford payments was better than the alternative.”


This week in Detroit: This week marks an annual Michigan policy conference held on Mackinac Island. Detroit’s key decision makers, influencers and politicos all assemble and discuss our city, the state of Michigan and in some cases, national trends relevant to our success. In conjunction with that the Ford Foundation announced strategic investments, including a Detroit office, to support investments in key Detroit neighborhoods — West Village, Southwest Detroit and Livernois-McNichols. One thing I really liked about Ford Foundation President Darren Walker’s column announcing this was his framing of people, place and partnership. Not just the alliteration of it, but the idea that this is what it’s all about. If we’re not committed or connecting to people in a time & place, not making space for that type of connection, then what are we working for anyway? Whether that’s a small business in rural Pennsylvania, a medium sized employer in Connecticut or a billion dollar auto giant in Michigan, it’s about show people what is possible in the place where they live and work. To tie it all together, Walker writes “It will take more involvement at every level to make sure our investments reflect the needs of Detroit’s people, and lift the entire city.” Exciting for us in Detroit but relevant insight for your team, your business and your community too.

One story that surfaced this week (not Mackinac conference related) was a fascinating look at how one project is trying to democratize data to ensure Detroiters of all ages are protected. Detroit has the rare opportunity to be a city that can remake itself, almost from scratch. One thing that Detroit cannot change, at least initially or easily, is the environmental issues — air quality, etc. Nevertheless, an article hit CityLab this week that profile how researchers can gather key data on Detroit’s air and water supply while forming a bond between our residents and our outcomes. The data being collected is useful and valuable, but I was struck with how the involvement of the people of Detroit meant the “data gathers” also felt a part of the solution here. That’s a big deal.

This so-called bottom up approach means that Detroit’s teens are growing up with an appreciation for the city itself and the complexity of the challenges facing any American city these days (and especially Detroit). If Detroit succeeds in gaining the title that the article suggests of “citizen led smart city,” then it will truly be a next generation city where everyone is committed and sharing in our success.


A Look Ahead: Innovation Leader published the top 10 cities for innovation. No surprises in the Top 5 — SanFran, Boston, NYC, LA and Seattle. The 8, 9 and 10th cities, however, might not have been obvious choices to everyone — Toronto, Minneapolis and Detroit. What was interesting about those three cities were the common elements. These cities brought together a productive mix of convenient air travel, big business/anchor industries that drive jobs & funding, and academic culture or startup culture. While it might not take all 4 elements, building around some core of big time business and dynamic R&D communities certainly keeps a city agile and attracting innovative talent.


Walk the Talk: I’m a sucker for big dreams and wild projects. That’s why when I saw that someone had listed Johnsonville, Connecticut (an entire town!) for sale, I couldn’t believe it. $1.9M — a bargain for a 62 acre town with a barn, bank, general store, church and several homes. Playing Powerball on Wednesday did not net me the $157M lump sum so I guess I’ll have to find another way to come up with $1.9M. After all, there’s no better way to start a communal living experiment than with an already existing (and historic) town.

If a whole town isn’t your jam, maybe just a big urban “compound” is better, we have one for sale in Detroit this week too.


Moment of non-business:

Poem by Shannon L. Alder

Read it with sorrow and you will feel hate.
Read it with anger and you will feel vengeful.
Read it with paranoia and you will feel confusion.
Read it with empathy and you will feel compassion.
Read it with love and you will feel flattery.
Read it with hope and you will feel positive.
Read it with humor and you will feel joy.
Read it without bias and you will feel peace.
Do not read it at all and you will not feel a thing.


Today’s Thought: Feel. Felt. Found. I’ve said many times that I try to employ memory devices that make valuable lessons easier to execute. Feel. Felt. Found. goes like this. When working with a client, colleague, employee or business partner, it is a process to ensure common ground without alienation. It’s a little salesy but I think there’s some value here. Start with something that says “I understand how you feel…” The benefit is connection through articulating whatever mutual understanding of the issue is. Next, this strategy says “Many other people have felt this way” or “I’ve felt this way too.” Inclusion and collaboration. Lastly, it allows you, as the leader, to pivot to “What I’ve found is…” or “We’ve found that…” Conclude with understanding and confidence. Feel. Felt. Found.

Quote: “Follow effective action with quiet reflection. From the quiet reflection, will come even more effective action.” — Peter Drucker

Bonus Content: Check out this Shinola profile of Mark Wallace who builds up Detroit during the week and builds guitars on weekends.

Continued success,

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