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

Saturday Cup of Joe #40. This week (originally sent out Saturday, February 11) marks the 40th week of this experiment. Originally, I wanted to stay in touch with you and share some of the things that I was reading on a weekly basis. Since the first few weeks of May and June, I have tried to provide value that you can use for your organization or business while highlighting some of the trends and authors that drive innovation today. What I’ve found most interesting have been the lessons on leadership, management and entrepreneurship. Hopefully I have been able to spark something of interest for you each week.

The world is changing rapidly and, often, the “old rules” do not apply. The speed of technology, the expectations of the consumer and the competition in the market today create an environment where only the bold survive. Innovation outpaces regulation. True market leaders must determine what will guide their decisions and then honor those values as they develop new and dynamic solutions. Companies that put customers first will survive any technological advance or regulatory change. Even though sales may rise or dip, if an organization is meeting the needs of the customer, success will follow. I have been lucky enough to see some of that first hand in my role here in Detroit and to follow those trends where they pop up around the country and the world. This little newsletter is a thrill for me and I hope to continue it for 40 more weeks and beyond.

I tried to respect the length this week and catalog some articles as well as keep my presentation brief. I hope this week’s collection remains valuable and gives you food for thought before the upcoming week.

This morning we look at:

  • Some articles (Of Interest)

Found on LinkedIn this week:

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Of Interest:

· Shawn Krause and others on the future of FHA

· An outside-the-box proposal: create a housing savings account and allow people to deduct the principal paid down each year but not the interest paid on the home loan. This would, apparently, marry housing policy to economic development.

· The House of Representative reopened an issue related to the future of FICO scores and indeed took the first steps to ensure a plurality of credit scoring models could compete. I have written about this before but always saw FICO as the “home runs and RBI of Moneyball.” In other words, FICO uses antiquated modeling that relies too heavily on things that are not as relevant anymore. I wish I was more of a data expert and explain exactly why, but in my case, it’s more of a perception that I believe instead of an exact science. But I also believe competition is critical to staying sharp and the fact is that FICO has not been challenged (historically) until recently (as far as my memory serves). One fintech company, Float, has disregarded FICO altogether. Lower risk transactions, of course, but still informative.

· We are proud to be 89 out of 100. US News ranked Detroit one of the 100 best places to live in US. Here’s our celebratory article.

· Plaid just raised $44 million in an investment round. Plaid is a fintech service that allows banks and lenders to access consumer financial activity. Plaid has now raised about $60 million overall as they work to ensure access to customer data.

· One man’s take on Detroit’s past and future. What Detroit means to the American Dream.


Got Me Thinking: I hesitated to post an article about politics, given the complaints everyone seems to have with social media these days, but The Atlantic published an interesting article about the divide between rural and urban voters. I couldn’t resist. Beyond the political strategy involved, I thought this article tipped off some of the trends that will dictate housing over the next 10 years. If urban communities trend blue and rural ones red, it may not matter politically because states continue to hold more power than cities. It will, however, change how communities interact and could change how individuals reside in those communities. One interesting observation: “Increasingly, the most important political and cultural divisions are not between red and blue states but between red states and the blue cities within.”


Have You Heard?: There might be a dip in production in 2017 but some predict a major bounce back an increase looking 3 years out. Friend and Saturday Cup of Joe reader Dr. Rick Roque sat down with MBA to discuss the M&A activity and market overview. Dr. Roque predicted $3 trillion in loan production by 2020. In addition to that highlight, Rick also identified 3 misconceptions in the mortgage M&A market today. These are:

1. Having a conversation with a prospective buyer is a sign of weakness.

2. One company won’t get they’re worth in an acquisition.

3. Acquiring a mortgage company is easy.

These can all be overcome with proper advice and valuation. Structure is key. Objective expectations don’t hurt but are difficult particularly when an owner has built a business from scratch. Having some distance by way of a broker or adviser can help.


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Valuable lessons. Never give up. Always keep your eye on the ball.

A Look Ahead: Brookings Institution hosted a podcast that looked at the economic issues likely to surface in 2017.


Viewpoint: Something caught my attention this week. I’ve tried to watch economic data to understand what may happen with income outlooks and home values in the next few years. My theory has been that home ownership rates will depend on jobs and income rising at least periodically if not consistently and home values bouncing back in “most” areas. This post seemed to implicate both topics. Unfortunately, the post also suggested that for some, the current environment will not provide a job, at all, nevertheless income growth. The author did cite the ability for entrepreneurs and new businesses/industries to counteract that cycle, but did not leave much room for error.


Quick Hit: Bloomberg wrote this week about mortgage bonds. The concern is two-fold. The amount of bonds held by the Fed and how the purchase market might be affected. For instance, Bloomberg observed, “The surge in mortgage rates is already putting a dent in housing demand. Sales of previously owned homes declined more than forecast in December, even as full-year figures were the strongest in a decade, according to data from the National Association of Realtors.” What’s more, interest rates are not the only thing that can affect the housing market. Consumer confidence, economic data, and even slight variations in local markets may make a difference.


Today’s Thought: Be a person first. Some companies are for profit. Some companies are non-profit. This week I heard my company described as more than profit. We’ll try to make a profit but it’s not just about that. Our work is also about how we can be a benefit to the community and do what is right by our clients. In many ways, this is true of what we’re trying to do as leaders. Be more than just co-workers to our teams, our organizations. Create an environment for others to succeed. Add value. Our Chairman likes to say “you are here (on this earth) anyway, might as well make a difference.” It has been tough to remember over the last few days, weeks and months. But sometimes leaders can forget to be a person first. My thought for this week and this weekend is to ensure that people are at the center of what I do. In the end, it’s always about people.


Bonus Content: Harvard Business Review and what makes a leader. Answer — emotional intelligence.


Quote: “Ambiguity is [always] perceived negatively.” — Debbie Millman

Continued success,

Written by

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

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