00:00Live from Colorado Springs, I'm Diego Sanchez, president of Housing Wire. My guest today is
00:13Gino Peluso, CEO of Sageant. Gino, thanks so much for joining me today.
00:18Thanks for having me, Diego. It's so great to have you on. Gino, your leadership journey
00:24is an extensive one. It spans from commanding Navy SEAL teams to now leading Sageant. What brought
00:33you into the mortgage servicing space and how does your leadership journey inform your strategy?
00:41Yeah, so obviously it's a little different journey into the mortgage servicing space here.
00:47You know, I listened to Clayton in his opening remarks this morning and he touched on something
00:55that is relevant to that question. It's network, right? You know, defense is definitely different
01:01than mortgage, you know, so but through a network, you know, being able to come in and help the team
01:08operationalize the new platform and take care of the platforms that we're running right now and the
01:13customers that we have right now, it all happened through a network, quite frankly. And your goal
01:18is to really modernize a very large servicing industry. How are you tackling that and what
01:28innovation gaps do you think exist in the servicing space? Yeah, so I mean, if you look at the technology
01:36for decades of what mortgage servicing has been doing, it's old technology, right? It's very old technology.
01:44It's old code and, you know, mainframe systems. And to change that, I've learned two things. A, it's really
01:54expensive to come up with something new and it's very hard. And being able to change those systems, not just the risk
02:05that goes along with old code, having to put, you know, different applications onto it to make it work, each
02:11servicer doing something different, you know, Band-Aids, bubble gum, and rubber bands, so to speak, right, on old
02:16systems, to be able to bring something into the 21st century of cloud-based technology that's real time, right?
02:25That's been the real gap, I think, right? It's the amount of money that it takes to keep those systems up and running,
02:30the amount of money it takes to get them to where servicers need them to be, and keep up with
02:36compliance, all the regulatory things that are going on, especially these days. You know, getting it into
02:43the real time, getting it into the 21st century, so to speak, that's what we're really focused on.
02:48So you're not trying to build on top of this antiquated software that's out there. You're really,
02:55you've been building from scratch at SageM. We built Dara from scratch using some of the best
03:01of the technology that was already out there, so to speak, you know, and learning from the platforms
03:07that we're currently running. You know, we run LoneServe and LSAMs right now while we're building
03:13Dara. So tell us a little bit more about Dara. I think that's like the big thing that you're rolling
03:18out at SageM. Dara is the big thing. To say the least, right? So tell us more about it. So Dara is,
03:24well, I think first, you know, I kind of explained why we're doing it, right?
03:27Bringing the servicing technology into the 21st century. But I think just as important as how
03:34we're doing it, before I explain to you what Dara really is, you know, a lot of systems over time
03:40have been developed, and it doesn't matter what industry it is, have been developed by engineers
03:44and developers, and then handed to the experts and say, you know, here, what do you think about this?
03:49And they change things, but it's never quite what you want. We've taken a different approach.
03:55We have experts, you know, people with decades of experience in servicing that came in and
04:00developed the requirements and sit next to the developers and the engineers to develop Dara.
04:05What were the pain points that you had to deal with throughout your entire career, what your
04:09operators had to deal with throughout your entire career? Now, how do we change it? And what do we
04:14build to make that different? And what we've come up with is a cloud-based, real-time, real-data,
04:21real-time compliance, end-to-end servicing system. That's really six components. First component's
04:27core, and that is your servicing. Think of that as loan server, LSAMs for us. That's, you know,
04:33everything you need to do for core servicing, right? Then there's the Dara consumer, which is the
04:39mobile-facing consumer experience, if you will, that plugs into the Dara core. Being real-time,
04:47self-servicing, you know, that drives efficiencies, that drives down costs, so on, you know. Dara AI
04:54docs, which is the AI component of Dara right now, where we categorize and read, I think we're up to
05:013 billion documents so far, so it's to scale. So it's learning. And it's learning over 350 different
05:07docs, different kinds of docs. And then you've got default. That's the hardest part of servicing,
05:15right? So your bankruptcy foreclosure, your law submit, your claims, all of that, and modernizing
05:21that, as well as loan movement, onboarding loans, and our data, Dara data, which is, you know,
05:28bringing in, ingesting the data, and making it real-time so it flows across all of those components.
05:32But ultimately, the challenges in servicing, and really servicing in general, it's all about that
05:40connection between the servicer and the borrower, and making sure that they have a good consumer
05:46experience so that maybe they'll do some more work with that lender in the future. How is Dara
05:53facilitating and encouraging that connection between the consumer and the servicer?
06:00Right. And if you look at the consumers these days, they expect real-time. Whether, I mean,
06:06look at what Amazon does. You can order something, and two days later, you know, you can track your
06:10order the whole nine yards, right? You don't have to wait 24 hours for them to tell you,
06:14okay, we got your order. And then 24 hours later, okay, we're shipping your order. You can see that real-time,
06:19right? And that's what consumers expect these days. And that's what we're delivering with Dara.
06:24That's the real-time aspect of Dara. You know, the servicing systems, you know, they've served the
06:30industry very well, but like I said, with a lot of bolt-ons, a lot of add-ons, and a lot of money
06:36to keep them running because of those bolt-ons and add-ons, but they're not real-time.
06:40A consumer can make a payment, and they have to wait 24, sometimes 48 hours.
06:44That generates phone calls, which costs money, which, you know, drives up costs of services for
06:50servicing a loan. And it generates mad consumers. And it generates mad consumers because they can't
06:55see what they can see with their banking applications, with Amazon. Pick something like
07:00that where they can see it real-time. You know, they don't understand why. Why can't I see my payment
07:06that I just posted? Why do I have to wait? That's what we're changing. We'll be talking a lot about
07:11AI here, and HousingWire has an AI Summit later this year. It's a big topic in mortgage. It's huge.
07:18So what are you building at Sageent that integrates AI in a meaningful way? Again, tying it back to
07:23that servicer and borrower interaction and experience. Right. So, you know, I mentioned AI docs, right?
07:29Using AI to read all the documentation to make sure, whether it's for a servicer that's bringing
07:34onboarding loans, to make sure that they're complete, to make sure that they have everything that they
07:39need. They're compliant. And they can go through their entire portfolio and make sure the portfolio
07:44is compliant. That's one way, right? But, you know, as AI, and look, it's still relatively new.
07:53And it still needs the human in the loop to check it. But the more you can use AI to answer a consumer's
08:00question as a servicer that's driving your cost per service in each loan down, if you can do that,
08:05and the more a consumer can self-service using AI and be comfortable with it, the better off
08:10they're going to be. The more comfortable they're going to be, the better the satisfaction. So that
08:15when they look at their servicer and they get their statement or whether they get it electronically,
08:20whatever method that they get it through, they know that they're being taken care of and that
08:26their loan is being taken care of and serviced the right way. So servicing more and more is becoming
08:31a scale game. There are some big servicers and they're getting bigger. How do you help
08:36a servicer in terms of scaling up and cost efficiencies? And like you said, cost per
08:42servicing each loan. Right. The real-time aspect of what we're building. And again, let's not talk
08:48about the way it's been done for decades. Right. Right. What we're building today is, you know,
08:53A, with AI. Right. B, with the real-time for services compliance and being able to stay up
09:01with the regulatory changes. And we all know today that's like almost on an hourly basis,
09:06something's changing. Right. As well as the, you know, the customer experience and being able to
09:12get feedback, immediate feedback from a customer, but also to be able to read, okay, this person has
09:17called five times. Four of the five times they're calling about their escrow or they don't understand
09:23their escrow. They don't understand why their insurance went up. They don't understand, you
09:26know, why their principal changed or their interest changed. They just don't understand it because of
09:31the type of loan they have. To use AI to be able to educate them on that is going to huge benefits,
09:37right? Back to the phone calls. If we can reduce the number of phone calls that come into a services
09:42call center, you know, those aren't cheap. Yeah. As I've learned in this interview. And also the more
09:47calls that a consumer makes, the more mad that they're getting. Correct. And if you can, you know,
09:51if they can answer the question first before talking to a human, that's a win. Yeah. That's
09:56a win all the way across. That makes a lot of sense. So, all right. As we wrap up the conversation,
10:01tell me a little bit more about your product roadmap and the things that you're going to be building
10:06within Dara to continue to improve that servicing experience. Yeah. So the first version of Dara
10:12Core, and let me back up, all the other modules that I explained, AI docs, default, consumer, loan
10:19movement, as well as our data, those are already in the market, right? They're in production. They're
10:24already out with customers now. Dara Core is the last part of Dara that will complete the full end-to-end
10:30real-time piece of Dara. That's coming this summer. This summer? As a matter of fact, this month.
10:37So you've got some busy engineers right now. We have some very busy engineers. You know, we're in
10:41the last throes. Yeah. As I tell people, the last 10 miles of a marathon, the last 10 minutes of
10:46anything, the last 10% of a build is the hardest. Of course. And we're inside that window right now.
10:52We'll go through all the end-to-end testing, and then we'll be ready to start boarding loads here
10:58in the fall. Amazing. Amazing. For our first customers. Well, Gino, again, thank you so much for
11:04joining me today. I think this was a really good conversation, and I really enjoyed it.
11:08Now, Diego, thank you very much. I appreciate your time. All right. Thank you. Take care.
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