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

Friends & Colleagues,

SCJ66. This week was a fun and exciting learning experience for me. I felt my way through a family vacation while making time for the meetings or phone calls that I was unable to move or skip. From my end, it worked well but I’m not sure how my family interpreted it. I was lucky enough to join them for five days at Ocean City, NJ. I have 3 nieces and nephews, plus my daughter, it was an active (and loud!) vacation. Nevertheless, it was restful and important to spend some time with everyone. At the same time, I’m working on a strategic project that included a major presentation on Thursday. So, while at the beach, I was taking a few prep calls, approving slides and preparing. Then my first day back in the “office” was a flight to present to a business partner. Really great stuff all the way around but busy week. We’re going to be catching up on sleep and family time this weekend.

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Ocean City, NJ, USA


I noticed a note earlier this week about the Founder of Movement Mortgage’s purchase of a bank from Danville, VA. The bank will now be Movement Bank but have no direct affiliation with the mortgage company. Then later in the week, the Charlotte Business Journal published a story about the first day of school at Movement School, a public charter school backed by Movement Mortgage. Founder/CEO Casey Crawford is doing some important things in his business and community. Worth taking note of.


Included below:

1. Income inequality has a direct influence on home ownership (Of Interest)

2. Ranking the top 62 cities (NextBelt)

3. Fintech lending may improve access to credit (Fintech, am I right?)

4. Advice from CEOs (Walk the Talk)

5. Rethinking the American Dream (Valuable Lessons)

6. Today’s Thought and the Quote

Of Interest: There is an interesting trend that connect a few different stories and sources this week. It’s a natural fit for Saturday Cup of Joe because it’s a big picture trend that has practical impact on the housing finance industry. David Leonhardt at The New York Times published an opinion piece of the widening income cap and disappearing middle class. Since 1980, according to Leonhardt’s analysis, poor and middle class incomes have decreased slightly while wealthy incomes have increased dramatically. The results are not just one-sided but structurally unsound for the future of the economy. Income inequality limits opportunity and ultimately hampers investments like real estate and home improvement(s).

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Source: DealBook, NYT

As if in response (or support), Forbes published a blog post lamenting the disappearing middle-class neighborhoods. Whether it’s a journalist or Congressman, we’re seeing more and more attention paid to the income / economic disparities in our communities. No question everyone’s goal is widespread economic stability and growth. When the growth is only occurring at the highest levels but is so dramatic as to represent economic progress when spread across the entire population, it can be deceiving. Without income growth, home ownership and home improvement is virtually impossible. Without improving equity or even stability in housing, the entire economy suffers.

So far, this is not a problem as home improvement spending continues to increase, up another 7% this year. In fact, home improvement spending is estimated around $316 billion in 2017. If homeowners are more willing to spend on home improvements than refinancing or moving, we could see continued trends toward home repairs over the next few years.

As if on cue, fintech startups are entering the market. One such company — GreenSky — has provided over $3.6 billion in home improvement lending. Sweeten, a matching services connecting home owners with designers and contractors, raised $10 million in capital including some from Jeff Bezos. According to Ainsley Harris at Fast Company, “These new digital offerings bring much-needed transparency to a market so confusing that just 42% of millennials feel confident they paid a fair price for their last project. The startups that win in this sector will be the ones that find a way to provide that assurance.”


NextBelt: Another great article found by a loyal SCOJ reader. This WalletHub analysis comes courtesy of Bill Weber, an attorney and corporate board member in Connecticut, about the best cities to live in for amenities & opportunities. According to WalletHub, based on 62 largest cities, Virginia Beach is the best place to live. Also in the top 10, Pittsburgh, Colorado Springs, Minneapolis, Vegas and San Jose join cities like Seattle, Denver and Austin (no surprises there). Here are a few observations I found interesting — NYC was #11, Honolulu was #13, and Detroit was dead last #62. As you can see in the rankings, Detroit has limited employment opportunities and high rates of poverty and crime. Again, not that surprising given the wide range of issues in the city. Of course, it appears these evaluations are looking at the city as a whole. I’m not suggesting that’s wrong but it does skew the perception of opportunity. For instance, Lexington KY and Louisville KY are ranked #24 and #32 respectively, putting them next to cities like Boston and Washington DC. Similarly, Cleveland at #53 is right above Miami, FL. Go Cleveland! I’m curious if looking at a current cities outcomes per capita or weighting the downsides is as important as we think.

Many SCOJ readers work in real estate or housing. Don’t we experience the subjectivity of these decisions on a daily basis? The client’s goals/priorities drive the decision to move, stay, work in a particular place. Would you evaluate living in New York City based on the rankings of all 5 boroughs combined? Isn’t living in Manhattan different than Brooklyn which is different than Staten Island? Hard to rank NYC #11 when living in Manhattan might be totally unaffordable but is balanced out because of properties in the Bronx. Kinda interesting.

I think one big trend this article highlights is the cultivated decision-making of 2017. We’re seeing more and more information and stories available so that it’s easier to know what it’s like to live somewhere before you move there. In fact, thanks to AirBnB, it’s affordable to test drive a place, if you have the means to do that. I think we’ll see a re-valuation of places based on the next generation’s priorities. I would expect the 2022 list to look a lot different. But this is good to think about in the meantime. (Also makes a good social media share for those agents or LO’s out there looking for content).


Fintech, am I right?: The Federal Reserve of Philadelphia published a paper this week outlining how Fintech can assist in serving the folks who might not be eligible according to typical, lending credit guidelines.

For instance, the report says, “Online fintech lenders are relying more on alternative sources of information, such as sales data from Amazon, eBay and other marketplaces, shipping data from postal services, cash flow analysis from business checking accounts and payment processors; and, aspects of social media to analyze and project.”

What’s more the report compared areas where bank branches and services are declining finding that fintech lending was filling the credit gap left from traditional banking. The results are mixed. While the report finds that the fintech lenders who made their data public for this analysis did serve the underserved communities, Lending Club was the only lender who provided data. While the results are narrow, the report supports that fintech loan products such as short term loans and credit cards can expand the credit box and provide access to credit in otherwise underserved areas.


Walk the Talk: One of my favorite articles is the “Day in the Life” article that follows a CEO or notable individual with hour-by-hour or time stamp updates. Seeing into the life of other successful people is fascinating. While this article from Fast Company isn’t exactly that, it does get to the advice and secrets that make certain CEOs even more productive and successful. I won’t go through all 9 but I want to highlight a few I appreciated. Hopefully these help or check out the article for additional insight.

1. Make the decision with 70% of the information. If you want for 90%, it will never happen. (Jeff Bezos)

2. Protect your time — actually this principle comes up in 2 or 3 of the items noted in the article. No matter whether that’s time blocks, working in a private space or scheduling personal downtime, everyone agrees that letting others control your time will lead to disastrous results.

3. Order your work appropriately. Mark Zuckerberg says do the easy things first. Gaining momentum and ensuring you actually accomplish tangible results is key. Others might say tackle your #1 goal or the biggest “win” before you do anything # of little things that may never add up. My advice is to know thyself and structure your day accordingly.

As seen on social media this week


Quirky find of the week: YouTube video — Kurt Vonnegut on how to write a short story in 1 minute, 28 seconds.


Valuable lessons in (un)expected places: It would be hard to argue the Sunday Business section of The New York Times is an unexpected place. Instead, I’ll use this opportunity to draw our attention to a column by Robert Shiller called “Economic View.” This week’s entitled “The Transformation of the ‘American Dream’” traces the historical context of the American Dream from a declaration of American values to an obsession with owning larger and larger homes.

The relevance for our industry is determining how to approach the messaging around the American Dream in what we do. As we look ahead to a new generation of homebuyers, the messaging is shifting from homeownership as the American Dream, indeed for the good of America, to the personal commitment to place, the narrative. Homeownership is no longer a statement of political or societal values but a statement of personal values. Commitment to the place, the home, the community.

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Boston, as seen out the window of my plane this week


Today’s Thought: Execution is worshipped. One of our company ISMs is “Innovation is worshipped. Execution is worshipped.” Execution is the whole ballgame. The more stories I hear about success people, the more I realize that the difference maker is doing. Executing a business plan, any business plan, separates real businesses from “that idea I had once.” Obviously it’s also the hardest and most daunting step. This week I heard about a successful businessman who got his start collecting used & unwanted bricks in Iowa and reselling them on the West Coast for vintage remodeling. Anyone who can turn a discarded brick into a profit can no doubt find value with increasingly complex (and profitable) business models. One of the first things I heard in business was doing something halfway successful is better than waiting (or not doing) something great. That idea has been proven true again and again in my short career observing the business world. Those who can make it happen, even partially, or even in small ways, make all the difference. My goal for next year is to understand what execution looks like for me.


Quote: “What you cannot enforce, do not command.” — Sophocles

Bonus Content: The financial blog & podcast “Payoff” published a podcast called “Housing Hacks” that includes interesting guests from Earnest & Zillow talking about housing choices, mortgages, etc.

Continued success,

Written by

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

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