A Closer Look at the Mortgage Space Mid-2023 with Julian Hebron

EXIN 10 | Mortgage Space Mid-2023


We’re halfway down 2023. For anyone who knows how to stay afloat in the mortgage space, that means keeping yourself abreast of what happened and what trends to expect. In this episode, Joe Welu interviews Julian Hebron, the founder and CEO of The Basis Point, to give us a closer look at the mortgage space in mid-2023. Is the worst over despite the recent challenges and rising interest rates? Will we see a potential improvement in the next six to 12 months? Julian shares his data-driven insights, helping you navigate across issues in the lending and mortgage market—from lender profitability to affordability challenges for homebuyers. Keep your eyes open for the market realities and the constantly changing landscape of the space. Tune in to not only readily take on the hurdles your way but also the opportunities to drive your success!

Watch the episode here


Listen to the podcast here


A Closer Look at the Mortgage Space Mid-2023 with Julian Hebron

I’m excited to be joined by my good friend and industry expert, Julian Hebron. Julian runs one of the top consultancies in the space called The Basis Point. He’s one of the smartest guys I know in terms of understanding the trends in the market and what is the data telling us. Julian, how are you doing? Its good to be with you.

I’m doing great, Joe. I know that you probably have a zinger to start this out. Let’s get into it.

You’ve been telling me that the worst is over. Specifically, over the last month or so, we have talked about this, but the data that I’m seeing doesn’t necessarily make that super clear. Do you think the worst is behind us as far as the lending market or the mortgage market? If you do, what are you looking at to derive that conclusion? There are a lot of people that would love that insight.

First and foremost, it takes a minute for the Fed data to permeate through the economy. Is the worst over in terms of lender profitability in multiple quarters of struggling for profitability? Probably not just yet, but if we turn to the rate market, which has the most direct impact on all of these factors, it’s also a little bit of a challenge. I’ll throw up a slide to start right away because to your point, not only do we look at the pain that’s happening on the ground but the rate chart says the story.

We peaked on October 21, 2022 at 7.38%. We’re pretty close to 7.8% to start August 2023. It’s the last five months of the year. That’s extraordinarily painful for the producers on the ground. It’s just as painful for the operations and lender profitability. I can see where the challenge of the question comes in. If you’re okay with it, I was going to walk through why I do believe when we look at other data, forward-looking from highly credible sources, that the worst is over, and we’re darkest before the dawn here.


EXIN 10 | Mortgage Space Mid-2023


I would love to understand that from a single lens, “I’m at a bank or a lender. I‘m in charge of the operation. I‘m running sales. I‘m an executive at one of these companies, or I‘m trying to make my living as a producer that’s helping consumers get into homes and refinance loans. I‘m looking at these rates and this chart. This does not look very inspiring to me in terms of rates.” Let’s get into the rest of the data and what you believe is setting the stage for us to be in a better spot over the next 6 to 12 months.

I’ll zip through it super fast and focus on December. That’s five months away. Joe and I are recording this on August 1st, 2023. Everyone knows this but to recap, I’ll say it for people that are tuning in. There are eleven straight Fed hikes as of July 26th, 2023. You go back to March 15th, 2022. You’ve got about sixteen months of rate hikes totaling 5.5%. That’s where we are. One of the things that I like to look at the Fed funds charts for is because after each one comes up, we come down. We haven’t been this high since those pre-crash years of ’08. You go back to ’06 and ’07.

This is the last time we were even near these levels. If you look at the chart that way, what happens afterward? We know this is the worst it has been, but if we keep going, the jobs have held steady. Wages have held consistently high. We know that unemployment is also at this multi-decade low. It’s still at 3.6%, but most critically, let’s get into headline CPI because that’s what all the consumers that we as an industry serve, see, and hear the most about. We will then do core PCE, which is the one that we care most about because this is what influences Fed policy most.

For those that don’t necessarily obsess over this data as we do, explain a little bit. As CPI starts to come down, how does that impact what they do with interest rates? The obvious points are inflation feels like it’s coming under control, which would make a case for pausing rate hikes. Is that the right way to look at it? Maybe go into that a little bit and set the context.

I’ll talk about it through the consumer lens on the CPI part and then the lender lens on the PCE part because we do have some wonks tuning in too. Even to the wonks and everybody else, the June headline CPI that came out is 3.1%. For the consumer to hear this, it matters because of this sentiment that they have. Inflation has been so high for a couple of years. That’s all they hear about in the headlines at least. That’s why CPI is called “headline inflation.” It’s because this is what people hear about. We’re at 3.1%. If we tick down into the 2%, people start to have some confidence that things are okay.

To ground on it, the target the Fed is stating is they want to see that core inflation come down to what range?

The Fed’s target is always 2% for all inflation. They peg very closely off core PCE, which is the actual price that people pay for stuff rather than an index, which is what CPI is. That’s wonky. I’ll share one other thing that matters for people that hasn’t hit yet. It’s within core CPI. Core CPI is a little bit higher. The headline, the number with everything in it, is 3.1% as of June. The core is 4.8%.

It is down but it’s still being held up by rents because the rent component of CPI is still at 8.3%. For those that don’t follow this stuff super closely, that’s based on leases that were signed a year ago. Rents have stayed reasonably high. We don’t think that it’s going to drop off materially but it will drop off as we go forward over the next five months. We will see that number coming down a little bit more.

For the consumer mindset, there are two things. 1.) The headlines do influence people, and they get a little bit more confident. 2.) Joe, you and I have talked about this a lot, but when you look at these Fanny surveys, which we’re not going to get into today about home buyer sentiment, it’s the worst time to buy ever. The same data set also says that a vast majority of people still would plan to buy if they were moving within twelve months. Homeownership is baked in.

Here’s a key takeaway if I’m digesting this data. A lot of our customers and audiences out there are in a space where theyre interacting with consumers. In many cases, they’re a source of knowledge to their customer base. If you’re in the industry as a practitioner, having the lens of understanding how this data is moving and how it is going to shape the next 6 to 12 months from a consumer sentiment standpoint is important. Thats why we’re spending some time on this data.

It’s understanding what is the actual narrative, where are the trends heading, and then ultimately, how should you be translating that into the right message that you’re taking to the market. You and I both agree, unless you’ve changed your position on this, that being inside the industry as a bank or a lender practitioner, part of your job is to set the right narrative for your customers. You’re not subjecting them to only what the headlines and the media say, which sometimes don’t tell the full story. Am I thinking about that right? Is there anything to add to that?



I would offer this for fun. The chart that we’re looking at tells the story, and the chart looks pretty damn good right now. Fed funds are still going up but CPI, the one we’re looking at, is materially coming down. If you need to meme that and make it sexy and cool on social, that’s what you have to do because that’s what you have to break through. Finally, going back to your opening question, Joe, this is why there is a real case for the worst is over because the CPI chart says it all.

Naturally, as inflation peaks and starts coming, we have seen it peak. We’re starting to see it come down. It feels like 2% is not that far away from 3.1%. I know there’s more to the story. We have seen false positives before, and things turn in the other direction, but you have to believe there’s a high probability with the sheer amount of rate hikes we saw. As that’s making its way through the system, you’re seeing that impact here. Our message to the audience is to tell this story. Use this information to educate the public on what’s happening. Let’s keep rolling.

I’ll underline it. I’ll keep rolling. Have fun with it because that’s what breaks through to people. It’s not fun looking at your pipelines. What is fun is you have a story emerging here in the last five months of 2023. If we go to core PCE, we will get a little bit more technical here. This one hadn’t moved. We’re going to show February to June 2023 but if you look at core PCE, which is what the Fed goes for most, they need this to be close to the 2% range. To your point, even if they’re upper 2%, we know that the bond market will react positively. We will come all the way through the 6% and start touching the 5%.


EXIN 10 | Mortgage Space Mid-2023


Recap that quickly so people can translate how that makes its way. You’ve mentioned the bond prices. For those that don’t necessarily understand how that works, can you explain briefly how that impacts bonds and then how that translates into mortgage rates coming down?

It’s pretty straightforward. When bond prices decline in a selloff, rates rise. What’s been happening is that the markets have been selling bonds including mortgage bonds as the Fed has been on this inflation fight and as inflation has been high. Bonds don’t have an appreciation for inflation because it erodes their future cashflow as a bond gives a fixed payment.

It’s all based on the yield. The cashflow that the associated yield has become less valuable. As the rates are arising, they can get a better yield on that rate moving forward.

The same works in reverse. When the bond market starts to believe that we are through the worst of the inflation, buyers start coming back in and pushing the bond prices up and the yield rate back down. If we look from February to June 2023, these five months for core PCE, which is what the Fed looks at most, 4.7% was in February, and then 4.6%, 4.6%, and 4.6%. It barely budged. This past read that came out for June is down 50 basis points to 4.1%. Once that one ticks into the 3%, and we’re now within 20 basis points, we could gain a full 50 basis points in one month on that. If we even gained twenty more, the market sentiment and the bond market will shift materially, and then you will see the rally come and then the actual mortgage rates come back down.

When the bond market starts to believe that we are through the worst of the inflation, buyers start coming back in and pushing the bond prices up and the yield rate back down. Share on X

If we see the next print on these numbers that we’re showing here have a meaningful adjustment, what you’re saying is there’s a high probability that’s going to change the sentiment for the people or the organization’s entities that are buying these bonds. As they get back into the market buying those bonds again, it’s going to put downward pressure on interest rates.

Something important about the bond market is that it is the smart money in the global capital markets. They will be the ones that tell the Fed, “We believe you now.”

To oversimplify, a lot of people, including some pretty wellfollowed economists or self-proclaimed economists in our industry, projected that we would be in a much lower-rate environment than we are now. The challenge with that is they were making those predictions ahead of seeing the consistent print on these inflation numbers coming down to a threshold that was within striking distance of a point where it did change the dynamic in those bond markets. That’s the disconnect that we have seen from saying, “Why are we still in the 7%?” The answer from my lens is ultimately, you’re just now starting to see data that fully supports that inflation is coming under control. As that becomes more real hopefully every month, it should take us in the right direction.

For what it’s worth, you hear these fancy terms like a soft landing. What does that mean? Typically, when you do this and hike eleven times for a total of 5.5%, which those hikes are for overnight bank-to-bank lending rates, that then thereby slows everything else down supposedly in the economy. Everyone was afraid that we were going to come to a screeching halt and move into a recession, but the soft landing is consumers are strong, and employment holds but we bring inflation back to more normal levels. If that’s the case, and we’re going to get into some housing units and sales now, you have to communicate to your consumers that home prices are not going to crash. If anything, we might have seen the worst of home price declines already.



Let’s do that. That point is an important one. We have talked about it a couple of times already but I want to emphasize it. As an industry, it is so critical to provide the right education to the consumers because people are making decisions a lot of times on what to do in their life. The financial journey that they’re either on or would like to be on is getting changed based on their perception. That perception sometimes is grounded in reality. Sometimes it’s grounded in headlines that they don’t necessarily properly understand or that the media isn’t properly explaining. Digging in here is an important component for all of us to remember.

I have a fun one before we do the housing bit. I’ll do these fast. Again on CPI, core PCE, and the outlooks. We have a fun chart that we have been doing. It’s a coincidence but we call it Will the US Inflation Spike Flip Off by December 2023? The reason we say that is when you look at the chart, it looks like inflation has been flipping us the bird the whole time. That’s what the chart looks like. It was low in 2020 and horrible in ’21 and ’22. By the time we get to the end of 2023, Goldman Sachs is calling for inflation to be CPI headline at 2.9%.

As we discussed, we’re already at 3.1%. It’s five months away before we get that. This could turn out to be better than what we’ve got. When we go to core PCE, it’s the same thing. Goldman is calling for 3.4% on core PCE by December 2023. It could be based on what we’re seeing trend-wise. Even if it touches the high 2%, the bond market moves well ahead of that, and rates move accordingly down.

I have to share with you some of the conversations that I’ve been having. I want you to relate that to the data and what’s happening. I try to have half a dozen or so conversations a week with senior leaders and executives in our customer base and also our partners, many of which are tech companies that serve the broader banking and lending ecosystem. What they’re telling me is as far as the mortgage lending market, the inventory shortage is a bigger problem than the interest rates. They’re saying that in many cases, even with rates at 7.25%, there’s plenty of demand for purchasing a home but there are not enough properties.

A lot of us that study the industry are struggling to see how that gap gets closed because here’s what we see. You have a bunch of people that got into homes during these incredibly historic low-interest-rate environments. For them to want to go from a 2.75% or a 3.5% mortgage up to a 7%-plus mortgage, they’re not going to do that unless there’s a life event driving. A lot of the transactions and homes coming on the market are life eventdriven. Can you walk me through what the data tell us? Even if rates come down to sub-6%, which everybody would be ecstatic to see a rate with 5% in front of it, if that happens, does it impact the inventory problem at all?

The short answer is yes. We will do two answers. A lot of your audiences know but we can’t emphasize it enough. We have said it a few times. Do not let your consumers think that home prices are going to come down. To your point, approximately five million units in total, new and existing, will sell in 2023. That’s off from a normal market in 2019 of six million units.

EXIN 10 | Mortgage Space Mid-2023
Mortgage Space Mid-2023: Do not let your consumers think that home prices are going to come down.


I still hear a lot of regular consumers when I have conversations. People are waiting for a bigger price correction in housing and assuming higher rates, and it’s simply not true based on what we’re seeing. If you think back to 2008, the financial crisis that we went through, you saw inventory levels explode and balloon to levels that you had in many cases a year or two years’ worth of supply. In most markets now, we still are in the 1 to 2 months supply in some markets. You’re not going to see the likelihood of filling that big of a gap in inventory, which would be required. You would have to have an oversupply to see pricing come down. It doesn’t seem logical that’s going to happen. That’s what you’re saying.

For what it’s worth, I’ll read these offers for 2023. The median price is $385,000 for existing and $427,000 for new. Technically, that’s what MBA is calling for year-end. The real reports for new and existing home prices are existing is at $410,000 and new is at about $415,000. Those are the median prices. If you take today’s rates and 5% down, this is a huge takeaway in my view for everyone, if you have no housing debt, you need to make around $93,000. If you had about $600,000 in credit card student loans or car loans, you need about $110,000 to qualify for an existing home. If you had about that much debt for new homes, you need to make about $115,000-ish. It’s not low but it’s not unaffordable.

Its affordability. If you look at a lot of the headlines and dig in a little bit, affordability is looked at as almost catastrophic. There’s an affordability gap. I do believe that based on what I see particularly with our bank customers who pay close attention to certain segments of the market lending into underserved markets. It’s a major initiative for a lot of our customers. They see a pretty pronounced or profound affordability gap. What you’re saying is at a macro level, the affordability gap, while it’s there, is not as significant or as catastrophic as we would like to believe.

Some of it is we’re comparing it to these artificially low rates. Let’s ground on the fact that in 2020 and 2021, it wasn’t the reality that we were going to see a 3% interest rate. If you’re comparing it to that, affordability is terrible. If you ground on some of the data you’re talking about, the affordability picture isn’t nearly as bad. Long term, were starting to see a little bit of innovation on the product side, the types of loan products that are there, and down payment programs. You’re starting to see more of that, which is going to help with affordability. Is that what you’re seeing?

I would put a little bit of caution there. I don’t like moving down the credit scale for the sake of volume. What I’m saying is that we do our scenarios every month on new and existing home sales even at the prices that we’re at. The peak for existing home sales is 85% of the sales in total. The peak in June ’22 was at $413,000. In June 2023, we’re at $410,000. You’re pretty close to the peak. You have these peak rates but even then, you still need between $98,000 and $115,000 to buy, with 5% down in today’s supposedly nosebleed rates. To your point, the people that cover this stuff either haven’t seen a market with elevated rates before or they are looking at data sets that use 28% debt-to-income ratios. That’s not how loans are made in this country.

That’s fair. Let’s move on.

This is what everyone knows but what I like to focus on is this. It’s the darkest before the dawn. It’s $3.29 million in loans total in 2023 to buy homes. That’s probably going to be the low for the cycle. The market is 77% purchase. You slowly will start to tick back up in the total number of loans available. It’s based on these rates. MBA calls the end of 2023 at 5.9%. Fannie Mae calls it at 6.6%. To your point, I’m more in the MBA camp. The rates have a 5% in front of them between August 1 and December 31, 2023. It happens in 2023. You can call me on it if I’m wrong.

Lets document this. You’re saying that rates in your mind could be at 5.9% by the end of 2023.

MBA is calling for 5.9%, and I agree that rates are in a 5% handle by December 31, 2023, based on this inflation.

That would make a lot of people feel a lot better. To our earlier conversation, it doesn’t necessarily fix the inventory problem but it does get things headed in the right direction from our perspective. That’s great. I hope you’re right.

Mike Fratantoni at MBA and Doug Duncan at Fannie lead the economics teams at those two orgs, and they know what they’re doing. I’ll take it one step further to 2024. The MBA team thinks that rates have a 4% handle albeit 4.9% by the end of 2024.t Fannie is still holding the line in the 6% in 2024. Doug has been more conservative, but I greatly respect that team.

Do we have any dates on their historical batting averages that we can look at?

Duncan’s batting average has held up. He’s won awards for it in these current cycles.

Is he the one predicting 4.9%?

Fratantoni says 4.9% by the end of ’24.

The guy with the higher batting average believes that it’s going to be in the 6%.

I disagree because of what we talked about before. I do believe that the bond market will react extremely strongly when we see these core PCE numbers moving into 2%. That could happen as soon as 2023.

The bond market will react extremely strongly when we see these Core PCE numbers moving into the twos, and that could happen as soon as this year. Share on X

Let’s transition into the industry, the organizations that serve the lending community, consumers everywhere, banks, lenders, and credit unions., and how they end up navigating this cycle. Both what we’re seeing mid-or-latecycle, and how we think this is going to be different. We have grounded that recovery is not going to be created equal for all organizations. Take it from there and give me your thoughts.

Let’s look at the mortgage sector because it is the hardest sandbox to play in with respect to the complication of the product set, the level of sophistication that you have to have to communicate to consumers about all the things we have talked about, the capital requirements, and everything else you need. Let’s look at market shares. Inside Mortgage Finance released its first six months of 2023 rankings. I want to focus on the market share of the top twenty lenders. They carry 51.6% of the market share for the first half of 2023. What does that tell me? It tells me that people that are leaning into this are gaining a lot more. That’s twenty lenders that have the majority market share.

What was it historically? It was much less than 50%. I want to say it was more in the 30% range or something. The top twenty, not exactly but directionally, if they keep going are on pace to double their market share in this cycle. Thats within the realm of possibility.

We know that this cycle has been especially hard. My biggest takeaway though is if you have the ability to lean into this a little bit, it’s already been tough. If it’s a matter of survival, it’s understandable that you have to go as lean as possible. If it’s a matter of austerity versus taking a little bit of risk, if there was ever a moment to take a little bit of risk, invest a little bit more, do an acquisition, and lean into certain types of tech stack that you’ve been thinking about but haven’t done yet. These are the moments when we’re finally through the worst of this.

EXIN 10 | Mortgage Space Mid-2023
Mortgage Space Mid-2023: If there was ever a moment to take a little bit of risk and invest a little bit more, do an acquisition, lean into certain types of tech stack that you’ve been thinking about but haven’t done yet, these are the moments when we’re finally maybe through the worst of this.


Even if you’re not in the top twenty or near the top twenty, there’s equal opportunity for those organizations to take shares from the other organizations that are in their quadrant of the market, even small to mid-sized lenders. We see dramatic differences between how they’re behaving and navigating this environment from one to the next.

Thematically, part of it is the mindset that they have. They’re getting creative. In some cases, theyre making very strategic acquisitions. They’re taking on production where somebody went out of business potentially. They’re coming out to the important vendor partners. They’re saying, “We’re going to get rid of everything that’s not essential and go deeper with the people that we believe can invest alongside us for the future.

We’re seeing those behaviors being the patterns of the ones that are winning and outperforming the ones that are not. They all have taken measures around cost control. I was talking to a small to mid-sized lender. He is like, “My biggest priority is I need to protect my most invaluable people. I need to be able to pay those people. From there, we’re doubling down on our core customers, our past customers, and our book of customers because they don’t necessarily have the budget to go out, buy leads, and do tons of marketing.”

What’s the most inexpensive thing that they can do? A lot of times, it’s taking that past customer book that you’ve built over ten-plus years, using data, and finding efficient ways to drive business from that. Those are some of the patterns that we see happening. I would love your perspective and your lens on it because I know you talked to a bunch of people as well.

There are a couple of things. I don’t like to prescribe apple-orange comparisons to people, but I will make one that’s notable with respect to Rocket bringing in a CEO from more of the FinTech world. Intuit is where their new CEO comes from. He oversaw TurboTax, Credit Karma, Mint, and all their consumer products. That mentality goes to lead buying and heavy investment.

It goes directly into understanding customers and customer data and utilizing that as your primary drivers of business and the primary ways you drive the UI and the experiences between customers. Those organizations spent decades mastering that. The fact that Rocket is going outside their industry and outside their normal house of executives, which I know many of them, and they have a stable of amazing executives, or the fact that they’re thinking differently should send a message to the market, “Maybe we need to think a little bit differently as well about how we’re approaching the future.” At least that’s the takeaway that I took from that.

Here’s what I would love to underline for everybody tuning in. This is super important. I’ve been doing this for a long time, and I often hear big moves, which have led to these substantial market share gains for a firm like that over a full fifteen-year period. Everyone is like, “We can’t do that.” That’s not true. As the FinTech sector that powers you mature, you can do that. I want to give an example.

As the FinTech sector that powers you matures, you absolutely can make big moves. Share on X

People think, “I have to get at the data in that way and do all these other things. I have to have an entire proprietary tech team and build Salesforce all custom or whatever it is.” I know it’s not true given the work that we do. I don’t mean to flip it back on you, but from where you sit and the way that you’ve matured, you’re one of the firms that’s a good example. You can power a firm like that even when they have bigger parts of their machinery but then every other firm that’s like, “We’re on austerity. We can’t do that much. How are we going to get at our data?” That exists now.

We’re very fortunate to be one of the key firms that serve the industry and some of those use cases on how to activate and take action on important data, how to ingest it, how to make it valuable, and how to extract insights, and then turn them into growth in the business. I agree with your statement, whether you’re working with us or other organizations. You don’t need to have this gazilliondollar budget.

We have seen a lot of tech as well get punished over the last couple of years. If you’re working deeply with any of the firms that are still around, have continuous conversations with those partners, “What are the additional things that we can do together? What are the additional ways we can create value together?” Have that mindset of collaboration because it’s usually not one thing.

Thats what people believe it is. It’s one big power move. In some cases, that big power move puts some things in motion. A lot of times, it’s looking at the problems differently and asking different questions. It’s asking questions like, “Why can’t we drive more business from the 50,000 people we have served over the last X number of years? What’s preventing us from doing that? How do we create opportunities?” We see it partly as tech partnerships but it’s also asking different questions differently. Thats what we see.

I’ll add a pragmatic note because it’s not just about asking those questions. You have to ask the questions of what is in your existing stack. They do work. What we do at The Basis Point is look at everything all the time. That’s why we host all the demo programs around all the industries because every time we look at firms that are the last firm standing in this part of the cycle, everyone has done stuff that you have not seen in the last 3, 6, or 9 months.

If you’re not looking at these parts of your stack deeply and saying to the folks that sold them to you, “What have you done recently?” I promise you that if you do, you will see new stuff, and it does help you because that’s what we have been doing in this cycle. Joe, I’ll commend you and your team because some of the stuff you’ve built to be able to get at some of those opportunities have happened in the last 3, 6, or 9 months.



We’re very fortunate that we have a lot of great customer partnerships. We look at it as partnerships. It’s not just true for us but it’s true for a lot of the category leaders. To your point, not everyone, but we have seen a lot of what I consider the category leaders at the core components of your tech stack that have done some pretty meaningful innovation in the last twelve months or so. If you’re not staying close and asking those questions of those partners, take the initiative, have the conversations, and get educated on where they’re going and how they’re helping lenders in ways that they’re not helping you.

A customer asked this of me. He is like, “What should we be taking advantage of today that could help the business that we’re not doing right now?” It’s a very simple question but I thought there’s a lot of power in that question. This particular leader had the awareness to say, “Maybe we don’t know everything. Maybe there are some things we can pick up on.” He asked it in that way. I thought that was a great approach.

I would encourage other organizations and leaders out there to ask those same types of questions from the tech partners that you’re already invested in, in many cases. You’ve already got a multi-year relationship. Why not ask them, “How could you be helping us more with things that we don’t necessarily take advantage of?” You would be surprised where some of those conversations will lead to.

I might sum it up all by this, which is, “How are you using that part of your operation or your technology to have a permanent real-time ongoing lens that’s a dynamic profile of each customer?” When you have that, that’s where all the opportunities shake out. We are very rate-sensitive at the moment. The second we start to see that stuff come down, you’ve got consumer debt that’s extra high. You’ve got housing debt. Once it comes back into the 5%, you can do consolidations where the blended averages are all going to work out mathematically for the consumer, but you can have a real-time lens on that stuff. If you don’t, these last five months of 2023 are the time to do it.

That’s exactly what we were talking about when we were saying, “The recovery and the curve going to the upside is not going to be distributed equally.” The organizations that do have not just the capabilities but have set their organizations up to execute on them because thats also one thing we’re seeing out there. People are evaluating the teams internally and saying, “Do we have the right talent to be able to lead us to this next chapter in modern lending and modern banking? Do we have the right people?” I know they have been here for a long time. Those are not popular conversations but we see the best organizations asking those hard questions, as well as the hard questions on the technology and whatnot. That’s a good commentary. I agree with your thoughts there.


EXIN 10 | Mortgage Space Mid-2023


Thank you. I appreciate it.

In closing, one of my favorite things that you do is you always seem to weave in whatever is happening in pop culture and somehow tie that into the industry. What’s the pop culture thing now? How does it relate to what we’re dealing with in the industry?

There’s only one pop culture thing this summer, which is Barbenheimer, which is the Barbie-Oppenheimer dual gigantic box office openings on the same weekend. I can tie that to the mortgage industry if you want.

I heard you saw the Barbie movie six times. Is that true?

Yeah. I’m trying to get jacked like Ken. I have to study up.

Wrap that up for us.

Here it is. This is a huge story because that industry, Hollywood, is under incredible upheaval on the same level that a lot of us are feeling in banking and lending. There are three things. 1.) Old-school tactics are cool again. It’s movie theaters versus streaming. Banks and lenders are under siege for the last 10 or 12 years, “Tech is going to have its way with you and eat your lunch.” That’s not true. You still have to bring the talent and everything that we talk about on super powering the humans to do the right things rather than having the machines take over. That’s one.

2.) Competitors are helping each other. In that case, the whole Barbenheimer trope was all about two blockbuster movies competing with each other. They’re two separate entities. It turns out that they started promoting each other, and that’s what led to this. Our industry is one of the great examples of one that is highly collaborative. It’s competitive for sure but it’s also collaborative. We draw a big lesson from there.

EXIN 10 | Mortgage Space Mid-2023
Mortgage Space Mid-2023: Our industry is one of the great examples of one that is highly collaborative. It’s competitive, yes, but it’s also collaborative.


3.) Choose your style. Banking and lending on one hand gets criticized for being a commodity. On the other hand, these two movies are polar opposites, and they are both having equal success at the box office because there’s an audience out there for everything. There’s a consumer out there for the type of style that you’re taking. You’re tech-forward. You do different channels. You do all kinds of different ways that we manifest our businesses. That all holds analogy-wise too. I’ve been staring at that and saying, “This is exactly like our space.” Those old-school tactics made everything cool again, and that’s what’s going to happen here too for everyone that’s left standing.

That is brilliantly said. I won’t think less of you because you went to the Barbie movie six times. Thanks for that analogy. It was great to spend time again. I look forward to doing it again soon.

I’m happy to be here.


Important Link


About Julian Hebron

EXIN 10 | Mortgage Space Mid-2023 Julian Hebron is founder and CEO of The Basis Point, a consumer finance media site and brand positioning consultancy for financial technology and real estate companies. He’s held executive sales and marketing positions with UBS, Wells Fargo, loanDepot, and LendUS/RPM Mortgage over the last 20 years, and is a prolific speaker and writer whose work regularly appears on or is cited by CNBC, The Wall Street Journal, Zillow, and other mainstream media. Read his full background on LinkedIn and his daily commentary on twitter@thebasispoint.