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

Friends & Colleagues,

(Originally emailed Saturday, 7/15)

SCJ62. Remember when 62 was the elusive home run mark? Growing up I thought there was no way it’d ever be broken. In fact, I remember where I was when Mark McGwire hit number 62 (the upstairs TV room at my uncle and aunt’s house in East Hampton, CT). Major League Baseball’s All-Star game was this week. I reflected how my relationship to professional sports has changed over the last 10–15 years. In high school, I watched as much sports as I could, memorizing players, stats and history, and dreaming about a career at ESPN. Then over time, and as my interest in current events, politics and other things grew, I stopped following basketball and paid less attention to baseball. Now, the only sports that I keep up with regularly are English Premier League and fantasy football, if you can count fantasy football as a tangent sport from professional football. Baseball is still one of my favorite sports to watch live but is increasingly difficult to watch on TV. Same with hockey. Detroit is known as Hockeytown USA so I’m able to see more live hockey here than ever before.

Challenge question: How often do you surround yourself with diverse people and opinions? Do you have a mechanism for creating dissonance that helps decision-making? Here is an article from Fraud Magazine about one executive who went to jail for giving in to institutional pressure and one executive who didn’t. The author is a white-collar crime expert at Harvard Business School. Interesting read.


Would you be comfortable living on a landfill? The more I hear about urban density and growth, the more I hear about growing up not out. One way to continue to grow up is reuse previously unusable land. Right now an old landfill is being used as a BMX park and golf course in Santa Clara, CA; but plans are in place to create a massive living and shopping community. Malcolm Gladwell’s podcast Revisionist History is back for a second season and one topic he takes on is the inefficient use of land that is golf courses. As someone who appreciates a nice tract, I was torn between his making sense about the person per sq. acre ratio that golf courses require versus the enjoyment it can be. At the same time, I will always support the creative, efficient use of space and place. What’s interesting about the proposal in Santa Clara is the intersection of regulatory concerns, forward-thinking residential space and safety issues related to the land itself. One to keep an eye on.


Interesting proposition: In order to change your corporate culture or for leaders of teams within an organization, follow the principles of “a movement” rather than just positive thinking. I think it also works anytime you are building a larger strategy at work — frame the issue, celebrate small victories, leverage networks of people, create space for individuals to innovate, and embrace the symbolism that people can point to for motivation. I also appreciate the reminder that friction is necessary for change. No friction probably means not much is changing.


Included below:

1. Politico outlines the problems of federal housing policy and proposes a local solution (Of Interest)

2. Detroit in 3 Acts including more on local solutions (NextBelt)

3. More African Americans are moving South (Millennial Minute)

4. Ante up. What are you willing to negotiate? (Walk the Talk)

5. Founder of IGA still teaching us today (Valuable Lessons)

6. Today’s Thought and the Quote

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Michigan Central Station, Detroit, MI, USA

Of Interest: Our industry has been dominated by policy & politics over the past 8 or 9 years. Heck, I have job as a direct result of new legislative policy positions taken in the wake of the 2008 financial crisis. Many other companies increased compliance staff and hired sales people to both establish their business in the new world post-Dodd Frank and capitalize on the beneficial refinance tools offered to lenders (and therefore consumers) simultaneously. What is interesting to read about is how this has shaped our policy making and lending patterns since. Politico published a report late last week that my colleague (and the Fair Lending Officer at QL, Ro Porter) brought to my attention. Beyond the federal policy implications, I thought the article was important to share as a clear explanation of how incentives for home ownership intersect with sister industries like home buyers and construction companies.

“The problem they’re facing is that American housing policy has always pointed one direction: encouraging people to own their own houses. Subsidized mortgages, tax breaks and, lately, crazy-low interest rates are all designed to boost the market for housing. And the market has usually cooperated: With the government juicing demand, builders swooped in and a steady supply of new houses typically followed…But in recent years, that dynamic has broken down.”

The complexity here is interesting. There’s a temptation to maintain the status quo because the housing market is still seen as delicate. There’s also the fear that no change now will only escalate urgency and problems related to Fannie & Freddie’s future as certain regulatory deadlines approach (end to GSE exception to ATR as an example). At the same time, the housing recovery has been unbalanced. Minority homeowners and first time homebuyers are paying the price in the form of higher rates and higher home values. But again, complexity abounds. Detroit homeowners are still feeling the results of adjustable rate increases in 2009–2010 while places like New Haven, CT and Albany, GA have seen double digit increases in African American homeownership rates.

The local approach, while varying greatly across the country, seems to point to a possible area of growth for increasing housing stock as well as improving affordable housing options. According to the author, there’s a movement to focus on local, municipal solutions like re-zoning or deregulating at the local level that could be a possible solutions. Seems hard to believe that enough places to move the needle on an entire industry but as they say, all politics is local. So, it certainly is worth a look.


NextBelt: This week, Detroit in 3 acts. Act 1: I’m not sure what it felt like to be San Francisco in the early 90s or Brooklyn in the late 90s or the metro DC area now, but it seems like all revitalization or dramatic growth stories include string of articles and columns about the “downside.” The growth is leaving some former residents or members of the community behind. Gentrification. Corporate interests are pushing the character of the neighborhood out. Bankole Thompson wrote that column in the Guardian this week about Detroit. I thought it was sensitive and handled the data properly but overall I return to this question of “what role patience?” What role should patience play in what is happening in Detroit? There must be weaving together of inclusive development with the foundational economic development projects that are also taking place. Detroit more than most major cities has a chance to build inclusive policies and elements into our growth but it does not and cannot happen overnight. While the transformation of downtown Detroit has been dramatic, there is still a long way to go and it’s just too early to be condemning political and business leaders for their priorities. There remains poverty and lack of infrastructure for much of Detroit that must remain on our radar but cannot simply be “solved” tomorrow regardless of whether a new store opens on Woodward or not.

Act 2: Loveland, the nationwide parcel mapping company, published a map of every property/parcel in Detroit subject to a tax foreclosure since 2002. The results are staggering. 37% or over 1/3 of all properties in the city have been subject to some action by Wayne County in the 14 year span. The map is interactive and fascinating but unfortunately represents a local, specific problem that must be dealt with as Detroit seeks to rebuild our residential and tax base. When I wrote earlier about how local level solutions may be part of a larger strategy to effect national housing policy & outcomes.

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Act 3: Detroit planned a subway system in 1915. It never came to fruition but the drawings and city planning is fascinating to read about now. Thanks Dana Miles Frost for the find!

Millennial Minute: The Sunday paper is one of the things Meredith & I have maintained even through 2 recent moves and the ease of our NYT digital subscription. Getting The Sunday Times is still part of making the weekend feel like the weekend. I caught an article in last week’s Sunday Review (Op-ed) section that I thought was worth passing along even though it’s now (gasp) 6 days old. Reniqua Allen wrote a piece titled “Racism Is Everywhere, So Why Not Move South?” about black millennials deciding between the metro New York area and Southern cities in Georgia, Texas, Florida and North Carolina. Her thesis is that the South offers a higher quality of life given the cost of living and modern America isn’t divided into racist regions and progressive regions. It’s actually kinda all the same.

According to Ms. Allen’s research, “The Southern Poverty Law Center reports that New York and Pennsylvania each had more hate groups than Georgia, Alabama, Mississippi or Virginia. The Center for the Study of Human Hate and Extremism, at California State University, San Bernardino, found that more than 1,000 hate crimes have been reported in nine major cities since the 2016 election. New York City had a 24 percent increase, the highest nationwide.”

I thought it was important to include this article, not only for its perspective, but also to understand how the relationship between people and place can change quickly sometimes within a generation or two. Allen challenges longstanding stereotypes and assumptions about race and urban America, at least East Coast America. I hope you get a chance to read the whole article.

Walk the Talk: “All in.” I assume people may have said this before ESPN started showing poker on TV, but I’m positive it became the way to convey excitement between my friends and I in high school and college. We played No Limit Texas Hold Em in our basements, kitchens and dorm rooms for years. So when I saw the World Series of Poker on TV at the gym this week and then read this article about poker player Phil Ivey, I expected it to be about how poker is doing in recent year. The article, however, was so much more! The author tracks poker’s modern American history through 1 player — Phil Ivey — and describes something incredible about all of present-day life. What’s a negotiation versus what’s violating an understanding? If the 2016 Presidential election has taught us anything, it is that we should never assume outcomes nevertheless obstacles as deal breakers. Everything is up for negotiation. Everything is up for disruption. In this case, Ivey’s lawsuit battles with casinos over a scheme to outfox them at baccarat. Here’s an excerpt to tempt you to read the whole thing:

“What’s at stake for Ivey is more than just the money. It’s a question of whether players are allowed to turn the tables on the house — not through cheating, like Crockfords and the Borgata allege, but through negotiating a deal that gives the gambler an edge. A deal the casino agrees to in broad daylight in front of God and everybody.

What’s at stake is whether or not the only legal way anyone is allowed to gamble in the world today is to surrender all advantage to the house. To let the rich stay rich. To play as a sucker once and forever.”

The article covers the requisite poker drama from big wins to bad beats, but, more than that, it’s an analysis of what’s still negotiable, possible, in our economy and what’s predetermined, what “we’ve” decided is unfair. I’m fascinated with both that world and how each of us navigate our own version of this question in our own world. Poker fan or not, I hope you find some value in the story.


Quirky story of the week: How will we ever believe what we’re seeing (and hearing) is true? The Atlantic took a deep dive into the world of audio dubbing, digital editing and even lip reading to show that the amount of fake videos and the capability of faking a video on the Internet is both easy and difficult to detect.


Valuable lessons in (un)expected places: I never knew the story behind IGA grocery stores. In fact, I never stopped to question what IGA stood for, assuming it was like A&P or Kroger (just another brand name). Atlas Obscura the website of researching interesting things in our world published the story of IGA and founder J. Frank Grimes. Here are two great lessons from Grimes and IGA. First, here is Grimes quoted during the Great Depression: “Great businesses are drawing in and becoming fearful, and adding to the unrest and unemployment…Right at this time, the opportunity is golden for men to go out and do business courageously, with determination, and prove that America is not dead yet. That there are men thinking and unafraid.” True then as it is now.

Second, I really thought the former President of the IGA described the value proposition of IGA well and it is broadly applicable to all business. “We have to deal from our strengths. We have the owner in the store. We are flexible enough to serve the consumer. Good service, clean stores and a competitive value.” — William Olsen. Leverage your strength and stay focused on your customer. It sounds so simple and it is.


Today’s Thought: The game should be easier than practice. I was reflecting this week after talking to a friend of mine who is an intern at QL. His senior leadership put the interns through rigorous resume review and interview practice as part of the internship. He even had to be interviewed in front of the whole team to practice the art of the interview. It occurred to me that too often in our organizations we don’t practice harder than the game. In sports or physical fitness, we want practice to be harder and more intense so that during the game or the race, it feels easier than our preparation. In businesses and organizations, though, we don’t often have time or resources to practice. But when we can, we should. The more intense we prepare, the easier (and probably more effective) life will be. Should be obvious but often overlooked.

Quote: “The only variable you can control is your work ethic. Someone can be smarter than you, faster, or stronger but they cannot out work you.” — Angelo Vitale, EVP & GC of Quicken Loans (most recently the author of this quote)

Continued success,

Written by

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

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