How AI Is Changing Mortgage Banking

Marc Hernandez (00:00)
I think the the advent of generative AI is powering the innovation and bringing down those cycle times. And I think consumers

are going to see a significant improvement in their experience. And and I think that's a great thing for all of us. And so I think that's that's the one of the outcomes of what is happening. Now, to backfill that outcome changes how we work. I think that mortgage professionals

are not going to have to know as much as they have in the past because of the layer of AI and technology that assists them to do their their job, right? The the concept of cobots helping you you know do your work faster, more accurate, more efficient. that is the reality of a new mortgage professional.

Val Buresch, CMB (00:59)
Hi, I'm Val Buresch, CMB. Welcome to CMB Connect, where we go behind the designation and get to know the people who make up the certified mortgage banker community. We

Focus on their careers, the choices that shape them, and what they've learned along the way. And today I have a very special guest, Marc Hernandez, a CMB. Marc has spent his career across the mortgage industry. He has leadership experience. He was in a leadership role at the state level, Mortgage Bankers Association. He

was the president of Altera Homelanding and currently he's the founder and the CEO of Aqualand. He has been involved deeply with the industry. I've known Marc for I think Marc about a couple of years now. And I'm really, really happy to have this conversation with Marc today. Marc, I'm so glad you're here. Welcome to CMB Connect.

Marc Hernandez (02:03)
Thank you, Val. It's great to be here. I appreciate the opportunity to to participate. And yeah, I'm a big fan of what you're doing. So thank you. I'm excited.

Val Buresch, CMB (02:11)
Let's start with your CMB journey What made you decide to pursue this designation in the first place? What drew you to the CMB, the Certified Mortgage Banker designation?

Marc Hernandez (02:23)
Think it was being around the Mortgage Bankers Association for geez, almost you know, 20 years and seeing the individuals with CMB designation and kind of admiring from afar the network, the connectivity, the positions that they had. And so over the years of attending conferences and webinars and networking with.

Folks that attend NBA events, it became clear to me that the CMB is a network that takes opportunities and amplifies them. And so I started looking at what it would take to become a CMB kind of early on in my career, maybe only seven, eight years into my career, and I wasn't quite ready. and then it was in during the pandemic times where

We had a very busy at the time, but a lot of downtime because we couldn't do too much. And so that's when I said, you know what, this might be an opportunity for me to explore what it take it would take to become a CMB. And I did, and the MBA was great, and the CMB Society, I knew a few folks in there, and of course my sponsor, Chris Orteguera. They I had conversations with them and they encouraged me and

I tell you what, Val, it opened up my eyes to this whole world of opportunities for my career, for learning and and and certainly networking. And so it was it was exciting. It was exciting to begin the journey. I did it, I started in 2020 and and became a CMB in 2021. It was it's one of the milestones in my career, I gotta tell you. It something that I I cherish. as we all know, it's not easy, right?

People talk about that. it is quite it does take quite a amount of effort and a little bit of studying, or exceed maybe a lot of studying. And and it was something that was so worthwhile. And now, all these years into it, it's something that I feel it's added a great deal of value to my career as being part of of this network of of professionals.

So it it it was something that I just I made it a goal. you know, early on. Took me took me about a year to to complete it. And yeah, that's a little bit about my journey so far. So really enjoyed it.

Val Buresch, CMB (04:45)
This is

yeah, and what you said really it was interesting that the CMB designation created opport creates opportunities. And you mentioned one was the networking and but the other the learning. I consider myself a long life learner. I love to learn. I'm very curious about different things. And what I'm actually curious right now is did that journey that you took

that

It's not easy with the CMB designation and the learnings that came with it. Did those learnings change something about your perspective on mortgage banking, how you approach business, what to do next? I noticed that you started your current company in twenty twenty three, very shortly after you took the CMB designation. Am I correct with that?

Marc Hernandez (05:35)
Yes,

yes, yes.

Val Buresch, CMB (05:36)
Is there a connection

between the CMB designation and Aequalend

Marc Hernandez (05:41)
Yeah, there there is in in a in a maybe not a direct way, but an indirect way. certainly it is the from the education standpoint, I quickly learned that I need to be comfortable with not knowing everything about mortgage banking. And and so the CMB journey was a little humbling because there's so much to know in our industry. So much.

And and you see individuals that spend several decades in in it and they're they're constantly learning. And and and I'm in the same boat, you know, a couple of decades, a little more than a couple of decades into this business. And like you, Vala, I love learning. I love learning. And and there's so much to learn about our industry. I felt at the time where it was a decision of I want to start my own company.

And and being comfortable with the amount of knowledge that I've learned and particularly coming from the knowledge of my CMB journey, where I had to become knowledgeable in other areas of our industry that I had not participated in actively. most of my career has been spent on loan origination, loan fulfillment, loan execution, and it kind of stopped there. So not very strong in in

in the servicing aspect, but having to learn that and not necessarily a strong suit of mine from capital market standpoint and and really understanding capital markets. and so that gave me a little bit of the confidence that I needed, among other things, of course, but a little bit of the confidence to say, you know what, I can do this. I can do this. I think I know enough to to venture out and and start something

And start building it brick by brick because I I know enough about the industry and I I do attribute part of that to to my CMB journey.

Val Buresch, CMB (07:35)
Very well said. And apart from the hard learning that you get in with the CMB designation and the journey that you embark on, I think at least I have experienced that that you actually acquire a framework of putting additional knowledge or a as you as we go through our careers into a framework of the the entire origination process and then the capital markets as you said, all of these

different stages of the mortgage banking industry. I think that's at least for me, that was very useful with the CMB designation.

Marc Hernandez (08:12)
Yeah, I I agree. I think it it it helps you organize strategies. It helps you organize you know, really any initiative that puts forth and thinking about what decision you make to solve a certain problem and what implications down the line it may have, having a broader view of of the industry. And that comes in the way of of education and knowledge.

And and I and I that again, that's why I love the ability to to to learn so much and and and especially for with with with the CMB network, because your view is always broadening the more you learn.

And

Val Buresch, CMB (08:53)
Exactly.

Marc Hernandez (08:54)
and I think that that fuels that the confidence, confidence to go and make a decision and and maybe see around the corner and give you a competitive edge.

Yeah, I I agree. The framework is is so so valuable.

Val Buresch, CMB (09:07)
Tell us about Aquiland. Am I pronouncing it correctly? Aquiland.

Marc Hernandez (09:10)
Yeah, yeah, thank you.

It's actually Equalend. I like to tell people for the for those that are mu

Val Buresch, CMB (09:13)
Echo lent. Echo lent.

Marc Hernandez (09:15)
yeah, music fans, like Aerosmith. yeah, I know I'll

Val Buresch, CMB (09:17)
Ha ha

Marc Hernandez (09:18)
start with the name. I'll start with the name because it's it's a little complicated by design.

Val Buresch, CMB (09:24)
Mm-hmm.

Marc Hernandez (09:24)
so it was inspired by being most of my career has been focused on lending to the underserved communities, those that might not fall within the credit box.

the traditional credit boxes. I started that as a loan officer back in 2004 and and then you know on to my the rest of my career, whatever wherever I was at the time, it was just a it is continues to be a passion of mine. And so when my business partner and I were thinking about, you know, what do we, what do we call this new venture? we wanted to be we wanted to be a company that

Turned every opportunity that came our way into homeownership. maybe not today, but in the future. And so that required us to look at our product offerings, look at the way we put loans together. And when it came to determining what the name would be, we wanted to be bring equality to all of the lending.

aspects, you know, especially you know, for those that fall outside the credit box. So so we try to think of a w the name or how to do it. And obviously we we l were in the lending business, and we took the Latin word for equality, which is equalis, and it's spelled

Val Buresch, CMB (10:44)
Mm-hmm. Mm-hmm.

Marc Hernandez (10:46)
AE. And so it was like equal e quality

Val Buresch, CMB (10:48)
Okay.

Marc Hernandez (10:49)
lending, and we kind of mashed it together and came up with this word and that's how Aequalend was was born and that's

we focus a lot on that. And and underserved doesn't necessarily have to be mean low income, low to moderate income. underserved can be from an education standpoint. it could be from you know somewhere where where folks aren't don't have access to to resources. So we focus a lot in many areas when it comes to underserved.

And it it's something that can keeps us passionate about the the industry and passionate about promoting home ownership and helping folks you know build wealth through home ownership. So that's a little bit about our mission and it started with you know coming up with the the name. So yeah, thanks for asking about that.

Val Buresch, CMB (11:39)
I love name stories because you the name of whether it's the person or the company like now we are talking about the company embodies the mission of that company.

Marc Hernandez (11:52)
Yeah, it's it's gotta start with something that maybe you repeat every day, right? It's so that it's it's a reminder of what you do. And yeah, you we try our best for it to, you know, our mission not to become wallpaper sometimes. You know, we stare at it all day long, it just becomes part of the

Val Buresch, CMB (12:05)
Exactly.

Marc Hernandez (12:05)
background. so you you have to do things to to make sure that's it's prominent and and remind folks, and even including myself, you know, what what the vision and mission are. but it's it's it makes it easier when it's baked into the name, right?

Val Buresch, CMB (12:19)
Yeah. Is Aequalend a brokerage or more of a correspondent?

Marc Hernandez (12:25)
We yeah, we started as a as a brokerage,

and we're taking our first steps as a as a nondelegated correspondent.

ultimately the goal is yeah, yeah, so thanks.

Val Buresch, CMB (12:32)
Great, yes. Yeah, yeah.

Marc Hernandez (12:35)
we and then we we ultimately want to become a direct lender. and so

Val Buresch, CMB (12:39)
Yes.

Marc Hernandez (12:39)
we do have you know aspirations. I've been in the IMB world most of my career. I've been in

Val Buresch, CMB (12:46)
Mm-hmm.

Marc Hernandez (12:47)
in in in mortgage owned

departments or or companies for depositories, but most of where I feel comfortable is in the IMB world and that's where the space that we wanna we wanna be in.

Val Buresch, CMB (13:00)
Yeah. Are you focusing on a particular geography or are you covering nationwide, coast to coast?

Marc Hernandez (13:07)
So

yeah, we we we started off with key markets where we thought would benefit us with given the network and the and the previous work that we've done before. so we were strategic in our licensure. currently licensed in thirteen states. our aspirations are national and but we're kinda starting with where we feel that we have the most opportunity and it's been it's been really positive so far. You know, we're

On pace to have our best year since 2023. So each year has gotten better and better in terms of volume, in terms of growth, in terms of profitability. And yeah, this year is gonna be a it wasn't maybe as as lucrative as we thought it would be. And I think I'm in good company when I say that. speaking with others in the industry. but it's certainly better than last year. And and we've seen significant amount of growth. So we're

Outpacing, we I'm proud to say that we completed from a volume perspective, we outpaced what we did in all of two thousand twenty five by May of this year. So everything else

Val Buresch, CMB (14:13)
Wonderful.

Marc Hernandez (14:13)
has been really exciting to see. So

yeah,

Val Buresch, CMB (14:16)
Yes.

Marc Hernandez (14:16)
we're happy with the growth.

Val Buresch, CMB (14:17)
And I'm I'm happy to hear that for you. I'm happy for you. And it's interesting. So I don't I personally don't have visibility into the profitability of the market, but I do see signs of hope and growth. It really depends on the lender. Some

Marc Hernandez (14:35)
It does.

Val Buresch, CMB (14:36)
some are okay and some are getting out of the business. And it just always fascinates me. I think it does come to strategy.

finding the opportunities that are in front of you and really taking matching your skills, your product offerings to to the opportunity in the market and and going forward with that. And yeah, I mean it's it's fantastic. I'm really, really happy for you.

Marc Hernandez (15:00)
Thank you.

Val Buresch, CMB (15:00)
And it just I think even where we started the conversation where you said that you like to learn, of course, with a brokerage or a and non-delegated correspondent, you

have to be so much more knowledgeable. I don't know whether it's fair for me to say that, but I think it's you have to be much more knowledgeable because you have to know all these different programs in order to match the program to the credit needs of of the borrowers

Marc Hernandez (15:27)
Absolutely.

Val Buresch, CMB (15:28)
and even to educate them. Even even if it is as you said, if it is not today, it's in the future, home ownership, you have to know or give them also a an idea of what's possible.

Marc Hernandez (15:41)
Absolutely. I I think the diversification of product offerings is one of the if you're doing it right, I believe, is can be one of the more complex components of of being on in in a in a brokerage side. I

Val Buresch, CMB (15:55)
Mm-hmm.

Marc Hernandez (15:56)
gotta tell you, Val, it was it was still very humbling to to kind of venture into this coming from a a direct lender for a long time for running a direct lender.

To starting a small brokerage, that, and I always admit this. I didn't admit it at first, but but now I do. Okay, and it was humbling. It was humbling. it was something that I thought, yeah, we can start off pretty easily. And you know, this it's not at the level of complexity that we're used to. So we can probably do that fairly quickly and fairly easily. boy was I wrong.

And and all the mount knowledge, including from what we talked about earlier, my my CMB journey, that that knowledge certainly helped. but we still had to figure out some stuff. And and we did, and I'm happy for it. happy that we went through it and and those struggles and challenges are what make you sharper and better at what you do. but yes, it it is something that can be very complex, I think, if you do it correctly.

And and we also see that a good deal of the market is trending to brokerages. And and we start to see a lot of well-established lenders come into the wholesale space because

Val Buresch, CMB (17:08)
Mm-hmm.

Marc Hernandez (17:09)
the market share is is growing. And it's somewhere around 30%. I don't want pretend to know the the accurate amount, but that's it's floating around there. And I think we will continue to see an increase in market share.

for from the brokerage community and allowing other lenders to to enter the wholesale. And and I think that, you know, you you mentioned something earlier, you know, for for companies out there that are, you know, navigating this, this and doing well, and we when we're talking about profitability and and and some are you know it's dependent on the lender. there is a key component that I've seen Val and I kind of want to highlight is there are so many

well-established, you know, long-term companies in this business that have done very well throughout all these cycles and including this cycle. the one thing that many companies can't control is the age of their leadership. if the ownership rather, the ownership.

Val Buresch, CMB (18:06)
Mm-hmm.

Marc Hernandez (18:06)
And and sometimes what I've started to see over the last couple of years is companies that were founded in the in the 90s and 80s, 90s.

And and and ownership is starting to say, you know, I don't know if I have it in me anymore to go through another cycle. And and so I think that a lot of that is fueling the the MA. And and so those strategies and you know they're tried and true. but there is one variable that we all have to contend with, and that's just time and age and as as we you know get older that can't really control that one. So I think that's where we're entering.

into a cycle here in our in our industry of almost just forced MA or disposition of companies because of you know aging ownership. So it's gonna be an interesting

Val Buresch, CMB (18:54)
Yeah.

Marc Hernandez (18:55)
component to watch as we as it plays out.

Val Buresch, CMB (18:59)
Absolutely. And I have been also thinking about that. And I think I wonder if this though age or vision and mission and strategy again, the the things we are talking about, because you know, there are other examples out there from adjacent industries like Warren Buffett, for example. He just retired. I don't know how old he he is, but

Marc Hernandez (19:21)
Right. Right, right. Yeah.

Val Buresch, CMB (19:24)
he's

His life was oriented towards leading his company and serving his clients and he did it into his nineties.

Marc Hernandez (19:33)
Yeah, yeah, well it's funny.

Val Buresch, CMB (19:35)
so I it's probably also there is an element of that. I mean there is that age where people maybe have built businesses for lending businesses just for kind of a lifestyle, I would from lack of better definition.

But others are build businesses to last, to serve those communities for a long time. And they are probably maybe they're thinking not necessarily as a abrupt exit, but as a survivorship where they are maybe there's some young people in their companies that they can pass down the the reins and and see that company that they've built grow. So maybe it's age, but maybe also it's a little bit of a

of that of mission, strategy, kind of commitment.

Marc Hernandez (20:23)
Yeah, I I agree with that. Absolutely.

Val Buresch, CMB (20:24)
Okay.

Marc Hernandez (20:24)
I and I think it's it's a it's an opportunity that exists 'cause I don't know if you agree with me, Val, but we we there was a a few years there, you know, close to a decade where we didn't have a lot of people coming into the industry. So so we do have a a talent gap shortly after the Great Recession. And and I think that

You know, we have to focus on that as an industry. I know we do at our company. So we're when we would go out and recruit not just sales, but but fulfillment professionals, and we we we try to find those individuals that we can grow with in their careers, right? So that they get exposed to a lot of different areas of the industry and have a long runway in their career because that's what's needed. So we we take folks that have never

Had mortgage experience, we we look for the right skill set, the raw materials, and and coach them and educate them on the industry. not only because it's it's it's good for the industry, but it's good for our company. And

Val Buresch, CMB (21:24)
Yes.

Marc Hernandez (21:24)
and get don't get me wrong, not every company can has this kind of strategy, but I think for those that are aging, we can pass along a lot of that industry knowledge to others to keep.

our industry going. And and and I and I think we can do that in one of two ways. We can do, of course, with mentorship. That's a traditional type of way of doing it. But also using technology and and particularly AI, where we we have so much knowledge stored

Val Buresch, CMB (21:57)
Mm-hmm.

Marc Hernandez (21:58)
at at and in experience in in these you know industry veterans. And if we don't do a good job of capturing that and passing it along

we are doing a disservice to our industry. And so

Val Buresch, CMB (22:10)
Mm-hmm.

Marc Hernandez (22:11)
that is a focus of mine as well. It's how do how do we take all these folks and that have these these am this amazing knowledge, fueled by years and years of experience and and transfer it to a to a new generation of mortgage professionals. And so that's that's something that's it's it's it I we we do it and not not a large scale, but we do it at a small scale. but I think we're as an industry we're better served if we focus on that. 'cause we have to,

Val Buresch, CMB (22:36)
Yes.

Marc Hernandez (22:36)
you know

we have to empower the next generation of of our industry.

Val Buresch, CMB (22:42)
Exactly, exactly. I love that. And I of course we met in the CMB Technology Committee, so I'm looking forward to the next section of our discussion. But just for a a little bit to stay with the people side of the business, because you know people call call it talent wars i in our industry where lenders are outbidding themselves to get the top loan officer.

But then there is the reality is that those top loan officers eventually are going to retire and then the investment in recruiting top talent perhaps is not returning the the return on investment that they're requiring. And often this other strategy of educating, mentoring.

young people or new entrants to the industry that have, as you were saying, the raw skills, maybe they have these kind of extroverted personalities, maybe they have some large networks in adjacent industries. They can be, I mean, perfect, perfect loan officers. what's your balance if I mean I don't want numbers necessarily, but how do you balance that the the very experience with a rookie, you know, what's

the mix that you the optimal mix that you're looking for and I also Do do you go to universities to hire young people or is it through through your network? How does that side of your business, work for you?

Marc Hernandez (24:06)
I love

that question because I don't think that there is a def a definitive answer. it it is is always shaping and and taking different shape and evolving. so I'll I'll I'll key you in on what we're doing now. And it's worked to a certain extent. And like most things, there's different iterations that you need to try. And but but I'm encouraged that we're focused on it. So I I love when you ask specifically.

you know, what is the mix of veteran versus rookie? And and I think it's around 50%. I think it

Val Buresch, CMB (24:36)
Hmm.

Marc Hernandez (24:36)
and it that's something that's that's worked for us. where where I think the opportunity lies is in having a mentor mentee relationship for those that are you know well into the industry well well into their into their their their career and maybe our

In the last steps before retirement. And and then those that are you know oblivious to what mortgage is and can you know get get a little bit excited and and and informed on what this business can be. that I think has existed for for quite some time, but there's something

Val Buresch, CMB (25:12)
Mm-hmm.

Marc Hernandez (25:12)
that hasn't, and in the last maybe decade, I think works to our advantage.

And when I first started in this business, I was given an opportunity to come out of college without any knowledge of the mortgage industry. Zero. And I couldn't spell FHA. Right.

Val Buresch, CMB (25:29)
Yeah.

Marc Hernandez (25:31)
And and I was I was taught with a pretty intense program. And and the company I worked for invested a lot of resources into that program. And we had a a cohort of five. And two of us actually, you know, ended up

out of that cohort of five ended up owning or running mortgage companies, which was uncanny. Yeah, yeah, it was, it was

Val Buresch, CMB (25:49)
wow, impressive. Impressive. Yeah.

Marc Hernandez (25:51)
great. And it was, and right out of college, and they recruited from from really, really great schools and smart people. That takes a lot of money and time. And it's not sustainable. But I

Val Buresch, CMB (26:02)
Yeah. Yeah.

Marc Hernandez (26:04)
don't want to get away from the point. What we have now though to our advantage in hiring rookies is the gig economy.

Is that individuals that are taking a step into our industry don't have to solely rely on the income that they generate from their position. They have other means of making income. And so, as a company, if you first embrace that, understand it, foster an environment where both can be true, I think your propensity

Val Buresch, CMB (26:33)
Mm-hmm. Mm-hmm.

Marc Hernandez (26:35)
for success will be accelerated. And then you match them up with those mentors that can.

lead them and teach them about the industry. And and that's where I think is different now today than it was maybe a few years ago is when you have a rookie that goes all in and and there's not working out and they're not making money, they generally fall out to go and do something, you know, especially if it's 100% commission or very low base plus plus commission.

Val Buresch, CMB (27:03)
Mm-hmm.

Marc Hernandez (27:03)
they can't they can't survive on that. But nowadays they can.

And we have structured not I wouldn't call it a program, but an environment where we can bring them on board, know that they have other commitments to make a living and

Val Buresch, CMB (27:17)
Yes.

Marc Hernandez (27:18)
and shepherd them through the mortgage industry and then start to see that shift of like,

Val Buresch, CMB (27:20)
Love it. Yeah.

Marc Hernandez (27:23)
hey, you know what? I can close a few loans and I don't have to go do my other gigs so much. And we've seen successful people do make that transition full time.

So it's a it's a it's a longer on rampant to the industry than it used to be. And I think that

Val Buresch, CMB (27:36)
Yes.

Marc Hernandez (27:36)
those are taking advantage of it now are are gonna be better served in in specifically when it comes to their their sales force.

Val Buresch, CMB (27:43)
I love it, love it. And it's f on the individual level is the same as as the company level, how you shared that you thought it would be easy to start it and to grow it very quickly.

Marc Hernandez (27:53)
Yeah. Right.

Val Buresch, CMB (27:55)
I did the same thing. I thought, starting my own company, of course I know what I'm doing. Whoa. And the same

Marc Hernandez (28:01)
Yeah.

Val Buresch, CMB (28:01)
with individuals. And you know, often we hear advertisements and people's promise so much, if you become a mortgage loan officer.

real estate agent, you are going to

Marc Hernandez (28:11)
Yeah. All

the money falling from the sky, right? Yeah.

Val Buresch, CMB (28:15)
Exactly, but you are providing this more supported and and diversified way of entering the business and actually putting them on the path to success. I really, love that.

Marc Hernandez (28:27)
I thought I fumbled through it, but I but I appreciate it. But that that's what that's what we're doing. You know, we have folks that you know, we we make we make time to sit down with them and plan everything from education, you know, their their twenty hours and then the the licensing and you know what what is that first you know, what is the first six months to look like and what do they need to know and what do they need to learn and and investing in them, but but also watching the return.

because return on investment and you know, for those companies that did really well in our industry of creating rookie programs many, many years ago, and pulled out of it, one of the biggest reasons was because you're training your competition's future sales force. Right. And and and then that's not a good business strategy. And if you don't if you're not strong in retention, and you just n the attrition, the natural the average attrit attrition takes away from your investment. But I I feel like when you

when you embrace it and lean into these folks are going to do other things than be a full time mortgage professional or or mortgage loan officer, you have you first of all you build a great relationship with them and they respect that you're respecting them and their livelihood and and you can grow together. I think there's a higher return there. So

Val Buresch, CMB (29:39)
Excellent. But this is really very smart strategy. And I I am excited for you, for your company and for the people as well, because it's part of having a company and being an entrepreneur is how you impact your employees' lives. And I think that's very rewarding when when you see success

in the in the lives of others. Yeah.

Marc Hernandez (29:58)
It is very much so. Yeah, thank you well.

Val Buresch, CMB (30:02)
But we we met

In the CMB Technology Committee, we've been, I call it sprinting for about year and a half, two years, I think. And what brought you and what brought us together is our interest in technology. And you're not only a successful originator and leader of mortgage companies, but you're also successful in applying technology and using the current AI to create new products. Can you tell us a little bit more about?

That aspect of your life and career.

Marc Hernandez (30:33)
Yeah, thanks. I I've I I graduated college with an information systems degree within with my with it was a the concentration of my business degree. And and then I didn't do anything with it. I went straight to becoming a loan officer. But I've always had

Val Buresch, CMB (30:45)
Yeah.

Marc Hernandez (30:46)
it with me and I I love the tech super cycle that we're in right now. I've always had

Val Buresch, CMB (30:52)
Mm-hmm.

Marc Hernandez (30:52)
a a a a passion for an affinity to technology and and we've seen some great technologies.

in the last 20 years, you know, 22 years of me and I've seen some great and and this is this is different. This is absolutely different. and because it's not only for our industry but just for for humanity. and I and I love that I'm I'm very fortunate that I I consider myself an opportunity to live it in the position and in the place in my career that I'm at. having enough knowledge, knowing, you know, how to leverage it.

Or I think I know how to leverage it and try new things. my journey really with specifically AI started and and this is a humble brag, but I my my chat GPT account goes back to December of 2022, right? So one month after it came out, right? So I've I've had it going on four years now.

Val Buresch, CMB (31:40)
Don't doubt it.

Marc Hernandez (31:42)
And and I I just had this overwhelming sense of emotion that we have to do something with this. We have to do

Val Buresch, CMB (31:49)
Yes.

Marc Hernandez (31:50)
something with.

And so that was near the transition of where I was leaving my previous employer and thinking about starting my own company. And so from the onset, it was, I mean, you know, how do we how do we leverage this technology? And Val, I actually had Chat GPT help me write the business plan for Aequalend and that was a great exercise because I was a sitting at my computer just staring at the screen, you know, getting you get writers blocking like, where do I start? And you have all this Google research, and then I added in

Chat GPT and and and and I think we built a a pretty good plan. and and so being exposed to the tech technology and and starting off with an LLM just began my journey of going into how can we use this technology. And one of the things that we did is I I felt because of a limited amount of time that I have, and folks were asking me, we talked about it earlier, like.

in in the brokerage world, it's how do you decide where to send the business, where to where the loans go. And and this could this is a real challenge. It takes a lot of time. And especially if you have dozens and dozens of of outlets, how do you how do you decide where you send that loan? So so

Val Buresch, CMB (32:57)
Yes.

Marc Hernandez (32:57)
we built a tool powered by the the j the models where it allowed us to aggregate all of the data

all the lenders, all the guidelines, and put in a scenario or question, and then it would direct us to that. And so

Val Buresch, CMB (33:13)
Mm.

Marc Hernandez (33:14)
that was pretty successful. And some we showed it to a few folks, you know, internally and they were like, yeah, this is great. So so we built hired some developers, built it, and and it worked, it worked great. and then we showed it to a few friends. I showed it to a few buddies in in the industry and they're like, Marc, you're onto something here. You should probably turn this into a tech solution for

For mortgage companies. And I dismissed the idea at first. I was like, no, I'm a lender. I'm not a vendor. I've never sold technology. I'm a mortgage person. And then one thing led to another. and over a course of a few months, we had our first client. We had someone, an IMB, that said, Hey, could you build us a guideline search analysis interpretation tool like you built? And I'm an entrepreneur at heart. and

I wasn't gonna say no. I didn't know what I was getting into, but I said, sure, let's do it. And we did. And we did. And and that's how my other company, Guideline Buddy, was born. And so we're we're just over two years old, and we focus, we started just with guideline search. but we've evolved into analysis, trends, patterns, credit assessment.

comparisons. And so our our tool has evolved and building all of those features and different meeting all the use cases for our clients, our enterprise clients, Val, I gotta tell you, has accelerated my knowledge so much that I I feel so fortunate. And I love the conversations that we have at our CMB tech committee meetings and you and I admire you and and your

in for in first of all the embracing of the technology, but how it's so impressive, Val, and how you keep up with the technology and and some of those conversations

Val Buresch, CMB (34:59)
Yeah.

Marc Hernandez (35:01)
that you that we have with the group are so stimulating because it's at the bleeding edge of you know what's happening in in the the the tech industry, specifically in AI, and what are we going to do with all that in the mortgage industry? Historically we were a little slower out of all the financial services

entities were a little slower to adopt technology and that's not a knock on our industry. We're we're we're hampered a lot by compliance and we have to be smart about how we use tech. so that's why maybe adoption is a little bit slower. But the acceleration of an adoption of this technology is happening at such velocity that we can't afford to take our time and and and

Val Buresch, CMB (35:41)
Mm-hmm.

Marc Hernandez (35:41)
over analyze it. so I I think that you know we we

The those that are wise in the industry have to embrace it. And I'm so happy to see that most have. And and so my journey started with solving a problem. And I think most people do it. We solve solved a problem. And how do we solve it? And we solved it with technology and then blossomed

Val Buresch, CMB (36:01)
Yes.

Marc Hernandez (36:02)
from there and grew into something that has been so much

Val Buresch, CMB (36:05)
Mm-hmm.

Marc Hernandez (36:06)
fun. And that's that's the number one. and and we're small and we have good good clients and we appreciate our partners and and and we're making a little bit of money.

but the number one thing that I love doing is just because I learn, right? We talked about it earlier when we started. It's the education. Yeah, it's the education.

Val Buresch, CMB (36:19)
Exactly. Yeah. Yeah.

W when you solve a problem, it's like teaching. When you teach, you learn more. And the same is when you're you have a problem that's real and you're trying to solve it and you're pulling together all of your resources, your knowledge, your partners' technology, what the technology can do for you. It I agree with you. It's incredible learning there. You learn more than just sitting in a classroom or yeah.

Marc Hernandez (36:46)
I I'm so

I agree because I I'm so I'm so fortunate and and and I and I've seen you and and how you've adopted technology and your and it's been so impressive to see the stuff that you've incorporated in your business. that you're

Val Buresch, CMB (36:56)
Thank you.

Marc Hernandez (36:58)
you're welcome. and I I learned from you, Val. I learned a lot from you. And I I still have to this is this is gonna be very you know time kind of locked in the in in the moment of time, but you had tur turned us on to the tool Jev.

Val Buresch, CMB (37:12)
Just

Marc Hernandez (37:12)
And yeah, I started this weekend, this past weekend, just going

into that that and and talking to my developers, they they got a whole

Val Buresch, CMB (37:17)
It's it's

Marc Hernandez (37:19)
lot of Slack messages from me this morning, like, hey guys, how do we use this? so so it's it's it's great. And and to be at at this stage, and I'll call it, you know, at the time of the time of recording, pre regulation. Right. Pre regulation. And I think that's where we're having a lot of fun is because we're in this space of pre regulation.

For the most part. And and then kind of every use case and exploratory opportunity just can be something that we go and do. It won't always be like this. It won't always be like this. I know that. but while it's here, I think we can learn a lot so that when governance and and and regulations really meld and and there's clear boundaries that we're better equipped for it because we were

Able to explore in open spaces.

Val Buresch, CMB (38:07)
I agree, yeah. Well said. And you know, with the advancement of technology, the other thing that this AI has allowed us is to just to begin to imagine what is mortgage banking going to look like next September, September 2027. Because we

Marc Hernandez (38:25)
I mean that fast, right? That fast, yeah.

Val Buresch, CMB (38:27)
you know it is a hundred plus year-old industry, and you think it's going to always be the same, but even if you look

Back into the the the history of this industry, like what it was in the 30s was different than what it was in the 70s and 80s. Okay, the 200s, 2000s is one thing, but now with AI, we don't know what is going to to come. But actively working with the technology, applying it, trying to use it to imagine what could be and position yourself to win in that new world.

I think that's that's what what what what all of us are trying to do who are awake, so to speak, to that to that the tsunami of the AI. Yeah.

Marc Hernandez (39:12)
Yes, you're right. You're right. Yeah. Yeah. Yeah.

Yeah. I love it.

Val Buresch, CMB (39:18)
Yeah, I want to share one thing. My account with ChatCPT was January first, twenty twenty-three. Because it

Marc Hernandez (39:25)
nice. Yeah. Happy New Year, right? Yeah.

Val Buresch, CMB (39:27)
was I heard about it, ChatCPT, but I thought it was only for special people and I was not a special person. And then at the kind of Christmas slash New Year's party at with my Bulgarian friends.

One of them said, no, no, you can use it, you can just sign up for free. And that's when I immediately did it. I signed up.

Marc Hernandez (39:51)
Awesome. Yeah, I love that. Well you yeah, I'm in good company then. Well, that's great.

Yeah.

Val Buresch, CMB (39:57)
so I have so many other questions. I'm but you know, one question perhaps to wrap up this

Part of our conversation will I know we'll continue this conversation in the CMB Technology Committee, in the society,

Marc Hernandez (40:10)
Yeah, of course.

Val Buresch, CMB (40:10)
in the industry, and personally. But it's it's about that, about the future. You know, you're looking at especially from your perspective as a originator, as a as a mortgage banker, dealing with customers. How how do you think actually,

is our industry going to look like in September 2027? I think it's not only the

the market players, the the institutions that are going to change, but it would be the consumers who who will look different a year from now. How how do you see this world?

Marc Hernandez (40:44)
Yeah. I know.

well I I see it. let me let me kind of work backwards and start it from the consumer's perspective of how their journey was in obtaining a mortgage. I think that one thing that we're on an accelerated pace to improve our cycle times from an origination standpoint. I think as an industry, we've done really well over the last maybe decade.

And and a lot of companies out there have invested in in resources and technology and people to to bring down those cycle times while mitigating risk and and and credit decisions and manufacturing quality. I think the the advent of generative AI is powering the innovation and bringing down those cycle times. And I think consumers

are going to see a significant improvement in their experience. And and I think that's a great thing for all of us. And so I think that's that's the one of the outcomes of what is happening. Now, to backfill that outcome changes how we work. I think that mortgage professionals

are not going to have to know as much as they have in the past because of the layer of AI and technology that assists them to do their their job, right? The the concept of cobots helping you you know do your work faster, more accurate, more efficient. that is the reality of a new mortgage professional. And let's take an originator, for example.

And we were talking a little bit about it earlier. I don't need to work with an originator as a as a as a as a company owner. I don't need to hire an originator that is really good at guidelines and really good at structuring loans and problem solving the complexities of qualification. That for a long time has helped set that individual apart from their competition. It makes them valuable

Val Buresch, CMB (42:41)
Mm-hmm.

Marc Hernandez (42:42)
to their company. and unfortunately, that is.

Can be replaced by technology. And I say unfortunate because I I think a lot of folks pride themselves in their ability to do that. so it's it's more of an ego thing than I think it is anything else. but fortunately for the industry, we're just about there. And that leads to better service, faster cycle times for for customers. And it's just changing the way that.

That that individual, that originator, works. Because they don't have to go out and solve this complex puzzle. If it's you know, a jigsaw puzzle, it went from a thousand-piece jigsaw puzzle to a hundred-piece jigsaw puzzle, something that's very easily solvable. So, what does that do? That opens up their opportunity and and their time to go out and help other customers, other prospects, right? So now if if done right, you have a more efficient Salesforce. from a fulfillment standpoint.

If I'm a processor, underwriter, closer, my the number of files that I can touch per day, per hour increases. And so we can do more volume with less. And I think ultimately that is the outcome. And you know as well as I, we've said this before, right? We've said this before in the industry when, you know, even back when we went paperless, we said, this is great. You know, we're gonna do more. And we and we did, right?

But but

Val Buresch, CMB (44:05)
Mm-hmm.

Marc Hernandez (44:06)
I think this is a such a such a such a big milestone in the change changing of how we work that we we won't

Val Buresch, CMB (44:13)
Yeah.

Marc Hernandez (44:14)
go back. We won't go back. there will be no regression here. This will so I don't think it will harm the industry. we do need to get some regulation around it. And I know a lot

Val Buresch, CMB (44:24)
Yeah.

Marc Hernandez (44:24)
of companies are are working on governance. kudos to Mismo that came out with their

their governance, and the agencies that's come out that come out with them in the last year. And and so we we know that we have to do things the right way in our industry and we're we're gonna get

Val Buresch, CMB (44:38)
Mm-hmm.

Marc Hernandez (44:39)
there. but ultimately the embracing of of the technology and the efficiencies that it can res produce is a great thing for us. It's an absolutely great thing. We're able to help more people in a less amount of time. That's a s that's a recipe for success in my eyes.

I'm excited about the future.

Val Buresch, CMB (44:58)
I'm too. When I speak with people like you, And we have to look with, of course, with optimism and and try those technologies. And I am not as close to the mismo data governance, but I think they're doing great things for.

providing that dictionary, that ability for AI to be able to connect to loan files, right?

Marc Hernandez (45:19)
And and for smaller companies that you know don't have resources to go out and and and and and you know from a budgetary standpoint, from a talent standpoint, they don't have the ability to create a governance. I think, you know, organizations like MISMO help with that, where they can provide a draft

Val Buresch, CMB (45:37)
Yes.

Marc Hernandez (45:38)
framework and say, Look, you know, we're not doing the work for you, but we can show you how to

the you know, put

Val Buresch, CMB (45:44)
Mm-hmm.

Marc Hernandez (45:44)
put your brain power behind your own governance. And so you you're giving folks a head start. And when you give them a head start, I think that it you know kind of raises the the the level for everyone as an industry and we can move forward together. because I I think from an advocacy standpoint, when you have the lack of education and the power of this technology, the risks of the technology, when when the advocates don't fully understand it,

We can't align on policy. If we can't

Val Buresch, CMB (46:12)
Yes. Yes.

Marc Hernandez (46:13)
align on policy, we can't effectuate change in in regulation. But with

the

education that we can, you know, give folks and get them on board with this and how we're gonna govern it, then we have a stronger, louder voice in in how regulation is is drafted.

Val Buresch, CMB (46:31)
And I really hope that the CMB Technology Committee can have more of those conversations. Perhaps we can invite even Brian to

Marc Hernandez (46:37)
You too, yeah.

Val Buresch, CMB (46:38)
to discuss, to hash those things out and keep keep learning, keep getting educated on that question and and

Marc Hernandez (46:46)
Absolutely.

Val Buresch, CMB (46:46)
There's so much, so much ahead.

Marc Hernandez (46:49)
It

is. It what this did is just dropped a whole lot of really cool

Val Buresch, CMB (46:53)
Yeah.

Marc Hernandez (46:53)
and interesting and hard work that we got to get to.

Val Buresch, CMB (46:56)
Right, right, right. Well, I really love to talk to you all day and and much longer, but we

Marc Hernandez (47:04)
I'm here about yeah.

Val Buresch, CMB (47:05)
yes, we have to wrap it up for today. I will link in the copy of this podcast a link to your mortgage lending company as well as to your technology company as resources and I really hope we can in a CMB technology committee we can do a little showcase of your

solution and highlight those contributions as well.

Marc Hernandez (47:27)
That'd cool. Yeah.

Val Buresch, CMB (47:28)
So I really enjoyed this conversation, Marc. Thank you again for z spending time with us today. And to everyone listening, thank you so much for supporting CMB Connect podcast. If you're not a subscriber, please subscribe. We are on YouTube, Apple and Spotify. I'm Val Buresch, CMB.

Until next time.