00:00Live from Las Vegas, I'm Diego Sanchez, President of Housing Wire, and I'm pleased to be joined
00:15by David Schneider, President and CEO of Senlar.
00:18David, thanks so much for joining me.
00:19Thank you for having me.
00:20It's an honor to be here.
00:21I appreciate the time.
00:21So before we dive in, could you just let us know what is Senlar and what role does it
00:27play in the mortgage ecosystem?
00:28Yeah, great question.
00:29So Senlar is a sub-servicer.
00:32We service loans for MSR owners who find that we provide greater value than they can do
00:39on their own.
00:39So in other words, a lot of people own MSR and they say, you know, I'm not so good at doing
00:44this.
00:44I don't have the infrastructure.
00:45I don't have the scale.
00:47I don't have the people and the technology.
00:48And we provide that for our clients.
00:50So we like to think we stand in the back for our clients as their back office and really
00:54enable them to own MSR and serve their customers.
00:56So why should a lender work with a sub-servicer?
01:01You talked about some of the reasons, but walk us through all the rationales.
01:05Well, I'm biased, first of all.
01:06But right.
01:08So look, I think using a sub-servicer is a great play for most owners of MSR because it's
01:14a scale business.
01:15You know, we service two million loans and we think we're not sure we'll have the right
01:19scale at that level.
01:20So it's a scale business and what that scale means is that we invest in technology.
01:25We invest in people.
01:26We're spending a lot of time on building out our AI lab, different partnerships we're building
01:31with people.
01:32And that is hard to do when you only have 20,000, 50,000, even 100,000 loans.
01:37So we bring that scale to our clients and allow them to take advantage of all that scale
01:42means to us, pass it on to our clients.
01:45So backing up for a moment, why should a lender even consider retaining servicing in this
01:54environment?
01:54Yeah.
01:55Well, I think everyone's going to make their own decisions.
01:57There's a lot of lenders out there and I've been in the mortgage business for 30 years
02:00and I've owned MSR and I've not owned MSR.
02:03And it's really dependent on what your capital structure is in terms of how you want to run
02:08your business.
02:09And MSR is a capital intensive asset.
02:11And there's a lot of originators out there who say, you know what?
02:14I'm going to be really good at originating and I'm going to sell all my MSR on a flow
02:17basis.
02:18We see that with a lot of folks.
02:20A lot of others say, you know what?
02:21I want to have a more balanced model.
02:23I want to have a model where I control the customer.
02:26I can re-solicit the customer for refinance.
02:28We've heard a lot of talk about that in the industry, especially recently.
02:31And I want to have cash flows coming in when rates are higher and the origination business
02:37isn't so good.
02:37So really it's dependent on that particular company, their capital structure, and their goals
02:43for the company.
02:44Yeah.
02:44I mean, you are seeing several of the big servicers build a lot of technology so that
02:50they can originate from their book.
02:52Right.
02:52Right.
02:52Which means they're recapturing a mortgage that some other originator created.
02:59Yeah.
02:59Right.
03:00So that has to be another factor at play when a lender thinks about subservicing.
03:05It absolutely is.
03:06When you think about servicing, you think about a few things.
03:09One is the cash flow related to the servicing and what does that do for your income statement
03:14and how do you manage your balance sheet.
03:16And then you also think about the retention of that customer.
03:19And retention, quite honestly, this has been something that we've been talking about as
03:22an industry for 30 years, 25 years.
03:24And sometimes we get it good.
03:26Sometimes we don't do it so well.
03:28But that is really important because once you have that customer, that customer has a
03:32great experience with us as someone like Sendlar doing the subservicing, that customer is more
03:36likely to go back to our clients.
03:38And we do most of our servicing on a private label basis, which means it's in the name of
03:43our client.
03:44Got it.
03:44So you don't even see Sendlar.
03:45You see the client.
03:47And then the customer has a good experience and they want to get the new loan.
03:50It's going to be easier with their existing lender.
03:53And they go back there.
03:54Some lenders have different strategies, too.
03:56Some lenders like it to go through a call center.
03:58Some lenders like it to go back through their broker channel.
04:00Some lenders like it to go back through their retail loan officer channel.
04:03So it's really dependent on what's important to that specific originator.
04:08All right.
04:08Let's say the lender has made the decision to retain servicing.
04:14Now they have to work with a subservicer or they want to work with a subservicer.
04:19What should they be thinking about and how should they be comparing and contrasting the different
04:25subservices out there like Sendlar?
04:27Yeah.
04:27So when I think about that, I think about three things.
04:30I think about the size and the scale of who you're partnering with.
04:34And not because that size is important just because it's size alone, but it's important
04:38because of the investment you can make.
04:40It's important in the investment in technology, especially now with the investment we're making
04:45in AI, the investment we're making in machine learning, the investment we're making in our
04:48core platforms.
04:49Those investments cost a lot of money.
04:53And the more units you have, you can spread that cost.
04:56And that allows us to drive our costs down and our price down to our clients.
05:00So that's important.
05:01Second is what kind of company are you?
05:04And we're a federally regulated bank regulated by the OCC.
05:09So we have a very high bar for risk, infrastructure and compliance.
05:13And as you know, in servicing, risk and compliance is everything because you've got to do things
05:18right.
05:19And there's like thousands of rules.
05:21There's thousands of rules and you've got to follow all those rules every single day.
05:25So that's important.
05:26And then third is who are the people?
05:28And you know, at Sendlar, we like to think of ourselves as we're mortgage bankers first
05:32and subservicing partners second.
05:34And all of us, you know, I've been in the industry 35 years and run big mortgage companies,
05:40small mortgage companies.
05:41And that's kind of true for everybody on the team.
05:43And what that means to us is that we understand our clients.
05:47We understand the position they're in, what they're trying to achieve, and we can help
05:51them achieve their goals.
05:53So you've spent time at Originator's.
05:57You're now at Sendlar.
05:58What excites you about servicing in particular as opposed to being, you know, a leader at a
06:06mortgage bank?
06:07Yeah, I love mortgage banking to start with.
06:11Like, you know, it's what I do.
06:12It's what I've done for my career.
06:13And whether it's working with loan officers or working with brokers or now doing servicing,
06:18all of it's really fun and unique.
06:20And it's a different challenge.
06:21This is a unique challenge because of the size and scale of the platform.
06:25I mean, we service 2 million loans.
06:27We have 2 million customers.
06:28We have customers calling every single day.
06:29And that's really been fun to think about how to bring technology, how to, you know,
06:36use the right resources to improve the customer experience.
06:39You know, a great example is how do we get more customers on a digital platform?
06:43And how do we help them make more of their servicing relationship?
06:48One great product we're working with, one of our clients is UWM, and they have a relationship
06:53with Built, which we're having built out with them.
06:56And Built does a lot of payment rewards programs for rental properties.
07:01And now they're introducing it to mortgage banking.
07:02So you can get rewards for making your mortgage payment.
07:06So it's those kind of innovative things that we do with our clients that we think are pretty
07:09interesting.
07:10Yeah.
07:10And subservicing is having a little bit of a moment.
07:12You mentioned UWM.
07:14Rocket bought Mr. Cooper.
07:15And I think that caused a lot of lenders to say, OK, maybe we need to consider a subservicer.
07:21Yeah.
07:21I think a lot of that is focusing on subservicing, focusing on clients.
07:25And also, one of the things that we do is we help clients with retention.
07:31We don't compete with clients.
07:33We don't originate a single loan, but we help you do it with analytics.
07:38We have a new program with a company called Ardley, which helps with retention analytics.
07:43And what that also does for us is for some of our clients who are smaller who can't really
07:47afford to buy that platform themselves, we can help them with that because we can spread
07:53it out against our whole client platform and really make tool, advanced tools available
07:57for them.
07:58So I mentioned before that several of the big servicers are deploying a lot of technology,
08:05including artificial intelligence, to improve their ability to originate from their book.
08:10Yeah.
08:10How is Sendlar keeping up with those big servicers and helping your clients recapture more of their
08:17own book?
08:19Yeah.
08:19I think with recapture, there's a few elements of it.
08:22It's being there at that exact time that someone wants to do their next loan.
08:28Because nobody wakes up any day and says, hey, it's a great time to do a loan.
08:34Normal people don't, you and I might think that, but normal people don't say that, right?
08:38They say like, well, I'm talking to my financial planner, I'm talking to my banker,
08:42we're talking, my neighbor just got a refi, maybe I should look at it.
08:46And what you want to do is to be there at that time for that customer when they think
08:51about it.
08:52And also make it known to them that they now have an opportunity to do a refinance transaction.
08:57You'd be surprised at how many people don't really know.
09:00They don't follow the markets like you and I follow the markets.
09:03And they might not know that they could save $500 a month, $300 a month if they do a refinance
09:08transaction.
09:09So it's making that information available to the clients.
09:11So what we try and do is help our clients with advanced analytics, better understanding
09:17of customers so that when they're ready to do that loan, they can take advantage of that
09:21opportunity.
09:23All right.
09:23So fingers crossed, we're moving into a lower rate environment in 2026.
09:29Who knows?
09:31Rates are going to do what they do.
09:33But in this environment, what do you see as the opportunities in 2026 in terms of origination
09:41transaction and then what you do subservicing?
09:43Yeah.
09:43I think one of the things I've learned over the time is I have no idea where rates are
09:47going.
09:47Like, so, you know, if anyone wants to, if I give a rate that you can be pretty sure shorting
09:52it is the best idea.
09:53But I think for mortgage bankers, what's important is you need to be ready for everything.
09:59I've always said that great mortgage bankers have three books on their table.
10:02They have rates stay the same, rates go up, rates go down.
10:06And you've got to be ready for all three of those things.
10:08And you've got to have your plan ahead of time because the best mortgage bankers are ahead
10:12of the curve.
10:13They know when it's happening.
10:15They react quickly.
10:16They respond to the market.
10:18And for us, how we can help them is to make sure that when the time comes and it is a refi
10:23market, we help them with that process.
10:25When the time comes, it's not a refi market.
10:27We help them with streamlining their costs and managing their cash position.
10:32David, I could talk servicing and subservicing all day.
10:35It's a really fascinating topic, especially right now.
10:38Thank you so much for joining me today.
10:40Appreciate it.
10:40Enjoyed it.
10:43Enjoyed it.
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