00:00We are live from Las Vegas.
00:08I'm Diego Sanchez, President of HousingWire, and I'm joined by two Chrises from Tidalwave.
00:15And Tidalwave is an AI-first point-of-sale platform that launched in 2023.
00:22So Chris McClendon, so great to have you on the show.
00:28And you recently joined the company after over a decade at ICE.
00:34Tell me about why you wanted to make the move to more of a startup environment.
00:38Yeah.
00:39You know, I, today would be three weeks in the role of CRO here at Tidalwave.
00:44The last 10 years spent at ICE and kind of funny enough, the five years before that I
00:48spent at Black Knight.
00:50So really the last 15 years really working with a lot of the same folks.
00:54I had the opportunity to meet Diane several years ago and, you know, hear about what she
00:58was putting together and to see the, you know, the continued success that she's had with
01:02Tidalwave and the innovative approach to point-of-sale.
01:06We've actually kind of coined a term in the last couple of weeks called point-of-sale
01:09plus that I owe this Chris credit for.
01:12And really, you know, when we look at the market and it just seemed like a really good
01:16opportunity for what we're doing.
01:18And Chris Olson, you guys knew each other before Chris McClendon decided to join.
01:23Yeah.
01:24Chris brought me into the industry 25 years ago and we've worked together several times
01:30and he introduced me to Diane.
01:33You are founder.
01:35And when I saw what she was doing, I knew that I wanted to be a part of it.
01:39So it's really fun to be together.
01:40Tell me a little bit more about that.
01:42You've been with the company not too much longer, almost a year at this point.
01:48Tell me why you decided to join Tidalwave.
01:50When you look at the market, everybody was addressing the point-of-sale through just
01:55a form application and Tidalwave is AI first.
01:59And when everybody's looking at AI, they're kind of doing like maybe a chat GPT wrapper
02:04or just dabbling in AI, but we're an AI first platform.
02:08And that was really exciting to me as a technologist.
02:11Yeah.
02:12Let's dive in a little bit on that, on the AI first, because there's a lot of mortgage
02:16tech companies that talk about integrating AI, but it seems like you're very insistent
02:21that you are an AI first platform.
02:23What is the difference?
02:24What does that mean?
02:26The true difference and with the experience that we have, especially at the enterprise
02:29level, knowing how important the security, the traceability to what AI can do.
02:35I mean, everyone has a huge interest in it.
02:38I think we've seen that at the booth the last couple of days.
02:41But really the ability for, with us, the security side of it, and what makes us special
02:51is the contextualizer that we've developed.
02:53That's really our proprietary secret sauce.
02:56That gives the ability that keeps us hallucination-free, that really it has, like I said, the traceability,
03:03the security is there.
03:05Also the ability that all of our customers, their data is their data.
03:11So it doesn't go into our LLM never to be seen again.
03:14So there's all those things that really, that in today's environment with PII, that we've
03:20really, with Diane's expertise, we've really mastered that foundation that I think is going
03:25to lead us to success.
03:27And how do you see this AI first platform differentiating from the other point of sale
03:33platforms that are out there?
03:34Well, it's not just making decisions.
03:38It's communicating back to the borrower.
03:40So for example, if there is a letter of explanation needed, you know, it doesn't go to the processor
03:47to fill out, to then send to a borrower to go back.
03:50The AI interviews the borrower at the point where you have their attention, completes
03:56the letter of explanation, has them sign it, goes back into the platform.
03:59So something that can take two to three days now takes two to three minutes.
04:04And so potentially you're reducing steps in the process and freeing up the LO to work
04:11on more high value tasks.
04:13Yes, exactly.
04:14The LO can focus on sales and not just the tasks to keep the loan going.
04:20So it has been a difficult couple of years in mortgage origination and in housing overall.
04:28And there's been a bit of a focus on costs at a lot of your lender clients.
04:34How does Tidal Wave help a mortgage lender with a reduction in costs without reducing
04:42the quality of the product that they're offering to the end consumer?
04:45Yeah, that's to kind of go back to what Chris was saying with a form-based approach.
04:49So a lot of the folks that are in the point of sale space, you know, they may even have
04:53like a dynamic web form that, you know, someone answers a certain question.
04:56One way it triggers a request to ask for something.
05:00As Chris was saying with the AI and the approach that we're doing, the AI is intuitive enough
05:04to know as it's going through that process, if it sees, you know, say on a recent inquiry
05:10on the credit report, it knows to ask for that letter of explanation.
05:14And why that goes back to your question is instead of the borrower filling out the static
05:19application that then goes to processing and then processing asks the borrower to, you
05:24know, for this letter of explanation, you have a back and forth for a few days, we can
05:28get that up front.
05:29And that's just one example of several that we do.
05:32So we shorten that processing time.
05:34And I think it really goes back.
05:35So I've been in this industry for 25 years.
05:37The first, you know, after school, I was a retail LO for about eight years.
05:44And you know, knowing that really, if you can get to a one-touch underwrite, you know,
05:48right now in our industry, I know some folks are above this, but two to two and a half
05:52underwrites a day is about the industry average.
05:56And I feel like if we have higher quality files, so the technology can be really cool.
06:01But if we can go to our customers and say, we can take your underwriters from two to
06:04four to six, you know, that's really what we're guiding towards to answer your question
06:09about costs.
06:10If we reduce the time and we have greater output when the market returns, which it will,
06:15we won't have to go through that seasonal approach of then hiring a bunch of people
06:18to the industry because, you know, really we want people to feel safe in the industry.
06:24And you don't want to go through that boom and bust hire and fire cycle that, you know,
06:28we've all seen over the last few decades.
06:30So that to me is really the key is you can create a situation where lenders can make
06:38more money, do more origination without necessarily having to do the boom and bust of hiring.
06:44So what are you thinking about in 2025 as hopefully the market perks up a little bit
06:50in terms of the product roadmap?
06:52What other features are you going to be bringing to market this year?
06:55We just recently released the first of our many multilingual functions, and that's to
07:02address the Spanish market.
07:03It's a huge market segment.
07:06And so we've approached it holistically, where if the borrower applies in Spanish, then the
07:14emails that they're getting are in Spanish.
07:16Their text messages, their push notifications are all communicated in Spanish.
07:21If they have questions about their loan file, they can message Solo, the AI assistant, in
07:27Spanish, and it will reply in Spanish about their mortgage specific questions.
07:32And because of the flexibility of LLMs, we can take that into any language.
07:40Hispanic homebuyers are the fastest growing home buying segment, and it's been that way
07:46for a couple of years now.
07:47So that's tapping into an opportunity for your clients.
07:50It is.
07:51It's interesting.
07:52It's like the personal stories that kind of touch you.
07:54Last night, we're out mingling with everyone that's here, and a former coworker, she had
08:00came up to me and she had seen some of the posts on LinkedIn about the new opportunity
08:04and found it really exciting.
08:06Before I left, I had an opportunity to kind of tell her about what we're doing, and it
08:09was really the Spanish piece of it resonated with her.
08:12She was telling me there's nothing in the market for that.
08:15Her mother is primarily a Spanish speaking person, and having the ability to apply for
08:20a mortgage and have that home buying experience without having to bring someone in to help
08:24them with the translation, it just, it really emotionally touched her and it was like one
08:28of those moments.
08:29It's like, yes, this is a good thing.
08:31Reducing steps in the process, potentially reducing costs, but making a much more high
08:35quality experience.
08:38So let's talk about the future of mortgage.
08:41You're a former LO.
08:43What do you think needs to happen to infuse this AI first mentality into more of the mortgage
08:49process?
08:51There is so much opportunity.
08:53You know, when we look at the roadmap, we know, you know, to the point we're making
08:56earlier about the point of sell plus concept where, you know, we are AI first, we've got
09:00this dynamic way of taking applications.
09:03We see the just the multitude of ways that we can expand on our agent technology.
09:08So rather it's credit, it's income, it's asset, you know, ability to help with all of these
09:15manual tasks to make the process more efficient.
09:18I just, I see so much opportunity to change the perception of what it's like to, to get
09:24a mortgage in the United States today.
09:25Yep.
09:26I'd love your take on that question as well.
09:28Sure.
09:29When I think about it, I think about our AI agents and as Chris mentioned, call it a point
09:34of sale plus because it's not just taking the application.
09:38It's that full communication with the borrower and the AI to help all of the manufacturing
09:45process.
09:46So when you think about like roadmap, when you think about post-closing, you're looking
09:49at a document and data, that's a perfect use case for AI.
09:53And then having the point of sale brings us to not just another point solution because
09:57there are solutions that might be able to look at a document and data, but then we own
10:02the borrower experience.
10:03So if something is needed, the AI automatically communicates with the borrower, accepts the
10:08document, clears the condition.
10:11Gentlemen, what an interesting conversation this has been.
10:14Thank you so much for joining me today.
10:16Thank you, Diego.
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