Mike Vough on using tech to take advantage of refi opportunities

HousingWire

On today’s sponsored episode, Editor in Chief Sarah Wheeler talks with Mike Vough, head of corporate strategy at Optimal Blue, about how technology is empowering lenders to take advantage of refi opportunities in this market.  Related to this episode:  ⁠Register for the Optimal Blue 2026 Summit⁠ https://www2.optimalblue.com/optimal-blue-summit ⁠Optimal Blue Launches New Lead Generation Tool for Originators⁠ https://www2.optimalblue.com/optimal-blue-launches-new-lead-generation-tool-for-originators ⁠Optimal Blue PPE⁠ https://engage.optimalblue.com/ppe-innovation-2025 ⁠Optimal Blue⁠ https://www2.optimalblue.com/ ⁠Mike Vough | LinkedIn⁠ http://linkedin.com/in/michael-vough-60467826 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠HousingWire | YouTube⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠More info about HousingWire⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://lnk.bio/housingwire  The HousingWire Daily podcast brings the full picture of the most compelling stories in the housing market reported across HousingWire. Each morning, listen to editor in chief Sarah Wheeler talk to leading industry voices and get a deeper look behind the scenes of the top mortgage and real estate stories. Hosted and produced by the HousingWire Content Studio.

Transcript

00:00Welcome, everyone. My guest today for this sponsored episode is Mike Vogue, Head of Corporate

00:10Strategy at Optimal Blue, to talk about how technology is empowering lenders to take advantage

00:16of refi opportunities in this market. Mike, welcome to the podcast.

00:21Thanks for having me, Sarah. Excited to be here.

00:23I'm excited to have you on here, especially because we're talking about some topics today

00:27that are so important to lenders. So let's jump right in and talk about why should lenders be

00:33focused on refinance, recapture opportunities right now? Yeah, it's a time-pertinent subject.

00:40The big thing is that what we just saw the last month. So in the last month, we saw OBMI,

00:46our mortgage rate index, go from six and three quarters to this morning, about 6.2. So about

00:52a 50 basis point drop in rates. And with that, we saw a corresponding jump in refinances at Optimal

01:00Blue. So we saw the share of refis that we observe in our system go from 26% to almost 40% from August

01:09to September. So it's just a massive jump. And I think you're seeing a lot of pent-up demand

01:14from the folks who have been sitting on the sidelines from a life event standpoint.

01:20You know, everybody gets so nervous about the 7% or the 8% interest rates. And when you get closer

01:25to that, you know, 5% psychological barrier, you know, I think people are getting off the sidelines

01:30in a lot of ways. I so agree with that. And that psychological barrier, it changes, right? So

01:36two years ago, this rate would have seemed like, you know, no way, I'm not biting at that. Now it's

01:41like, yeah, I better jump in while I can. Yeah, we definitely saw some of that too during the month

01:47of September. As we saw some of our largest lock days were actually days when rates went

01:54up. So it is interesting because it was almost like a people were afraid, you know, afraid

02:00that rates might go up, afraid that inflation might go up, the impact of tariffs might drive

02:04things up. And any, you know, after it wasn't the day we saw a big decrease, it was the day

02:09after when it went up five basis points or 10 basis points, that we saw a large increase

02:15in volume for fear of missing out. There's a lot of FOMO out there in the industry.

02:19Which makes so much sense, you know, and then, and then you think about the mortgage rate

02:23lock-in effect, right? So if there are people, you know, the reason why refis have been so

02:28locked up is because people have really low rates, right? We're finally getting past some

02:32of that. How is that impacting refinance activity and opportunities for lenders?

02:37Yeah. You know, some stats here that I think are showing some signs of life, you know, in

02:422024, 80% of loans were, you know, below a 5% interest rate. And I mentioned earlier

02:50that 5% psychological barrier that I think the industry is getting closer to, you know,

02:55fast forward a year 2025, latest stats that I've seen is that got that closer 70%. So you're

03:01seeing a slow kind of like chug of life events, right? You know, people moving, people relocating,

03:07people, you know, upsizing, downsizing, you know, the dreaded Ds of death and divorce as

03:13well, right? Like you're seeing those life events slowly chip away at that. And as rates

03:18decrease, and, you know, I do think this five, you know, five handle, even if it's five and

03:23three quarters or five and seven eighths, like if we can get there as an industry, I think

03:27you'll see that that percentage decrease over time faster. Because I just think there's a

03:33human psychological barrier. It's almost like when people price something at $5.99 versus

03:37$6 or $99.99 versus $100. You'll, you'll, when we cross that five, that five handle threshold,

03:44I think you'll, you'll see a lot change there. But it's been hard sledding for folks the last

03:48three years, because so many people refied or bought homes in that 2021 time period in

03:55the two to 3% interest rate world. And then we woke up in 22 and we're in the sevens and the

04:00eights. So it's just taking a long time to kind of move through that, that cycle where,

04:05you know, the average home buyer is in their home for six or seven years. And we've seen that

04:09really slow down the last handful of years, which is how high rates are.

04:15Well, I mean, this is what the industry has been waiting for, right? It's like,

04:18at what point do we, do we reach the tipping point? So that refi become, comes back into the

04:23picture. But even though that's what they want, there are some challenges, you know, in a refi cycle,

04:28which we all know, what do you see as like, what do lenders really struggle with when it comes to

04:33retaining borrowers in a refi cycle? Yeah, really good question. And I actually want to start in a

04:39slightly different spot of the mortgage life cycle. And it comes down to what lenders are doing when

04:44they're actually selling and securitizing their loans. So this is a part of the industry that there's

04:50not a big light shine shown on it, because it is hard. It's very quantitative and capital markets

04:56based. But when lenders are going to make that decision of do I want to retain or release that

05:01servicing, that inexplicably leads to some of these stats that you're going to talk about in a second.

05:07So the loan sales that we observe, we see approximately somewhere between that 40 to 50%

05:13of loans are actually sold released, which means the lender is selling the servicing rights to

05:19somebody else. So this happens to a ton to borrowers, right? You think you're doing it with,

05:22you know, Mike Vogue Mortgage, but then Sarah Servicing is then doing is actually servicing

05:28the loan, right? And so there's a lot of reasons why folks do that. Lenders in today's environment

05:34need cash. So they could sell that servicing right for cash today to kind of keep feeding the machine.

05:40But there's other players out there where they want to just effectively using originations as a way

05:44to grow their servicing business, right? So there's that give and take there. So if you're already

05:49starting at one in two loans being released in the industry, it kind of sets you back from a

05:56standpoint of how much could you actually retain? And this industry is so competitive, right? Everyone's

06:00fighting for every loan, every basis point out there. And you see some pretty gnarly stats from

06:05the standpoint of what the average retention rate is. You know, there's a bunch of sources out there,

06:10and I've seen it anywhere from 15 to 25% of loans being retained by the actual originator of the loan.

06:16That is just a really dismal stat, in my opinion. And then you throw in that you have some behemoths

06:22out there that quote in their, you know, their public, you know, financials that they're north

06:27of 60% retention rates, 70%, 80% retention rates, you strip those folks out, that retention rate is

06:33even worse than what I'm quoting in that. So it kind of boils down to this need for cash, but then also

06:40how competitive this industry is from a standpoint of just trying to fight for every loan or every

06:46borrower or every relationship out there. I think that relationship part is key because

06:50if this is just a transaction you do with your borrower, you know, once every five or seven or

06:5610 or 15 years, it's really hard. I mean, like, it's really hard to have a relationship based on that.

07:02Yeah. I think it comes down to that one of those industry adages of, you know, can the loan officer

07:08move to more of that advisor role? And, you know, I recently bought a new house about two or three months

07:14ago and my loan officer really helped me out from a standpoint of offering some really creative ways

07:19to finance the transaction for me. So I know I'm going to go back to him and at least give him a shot

07:24when I want to do a refi. And I think that's something that folks in the industry should be thinking

07:28about in terms of like, how do you make your mark? How do you make that relationship with someone?

07:32Because, you know, dollars might win out in the long term, but you want to be that first or at minimum

07:38second phone call that the borrower is going to make. Right. And staying in their life, you know,

07:43so that if it is even years later, like they know who you are. Exactly. It's such a critical point.

07:48The trigger leads bill is something that the industry worked really hard for, advocated for

07:53MBA, other organizations, you know, really worked hard to get passed. So now that it's passed,

08:00how does it change this dynamic? Yeah. To recap for the audience, there's basically been a couple

08:05carve outs in that bill to make it so that you could have some type of like trigger kind of like

08:12outreach if you're the originator of the loan, if you're the servicer of the loan, or if you have a

08:16commercial relationship, like you have a checking account or a, you know, a savings account with that

08:22borrower. So, you know, I think it does give a little bit of an advantage to maybe some of those

08:27players. And typically, if you have, if you could prove that, hey, my retention rate is, you know,

08:325% higher than somebody else's that inexplicably leads to more pricing power for that mortgage

08:38originator. So they can offer better rates upfront. So, you know, I think that's, you know,

08:42it's a move in the right direction. I mentioned that I got a mortgage recently. And, you know,

08:46when I filled out that first, that first paperwork, my phone blew up. Like I had a million text messages,

08:52a million calls. I basically stopped answering my phone unless you, I have a number that I've saved

08:58in it now. And that's a bad experience. Nobody wants that. But I do think if they wanted to level

09:03the playing field, I think, you know, they're almost a half step there in terms of doing that.

09:10But in general, it will give those folks who have that initial touch point with the borrower a little

09:14bit more of an advantage in terms of that next loan. And, you know, speed does make, isn't a

09:20differentiator here. So having that speed to the borrower is important. And I think those folks will have

09:25that advantage. I think you framed that exactly right. From my perspective, it's progress. It's

09:31good, right? It's better than it was. But, you know, I've been at a lot of industry events in the

09:37last couple of months and you meet lenders, especially smaller lenders feel like those

09:41carve outs gave a lot of advantages to some other people. And there's still, it's still a very

09:47competitive thing. Yeah, it's a, this industry is so competitive, right? So, you know, when there's a

09:53little bit of an advantage here or there, it can tilt the scales a little bit, but I don't want

09:57like great to get in the way of good, right? Like this is a good step forward for the industry and

10:03we could continue to make it better and better, but it's, it's certainly progress, which I don't

10:07want to downplay. So you talked about speed. And I think that that's really important when we're

10:12talking about this competitive environment, you know, what role does technology play as lenders are

10:17trying to compete, you know, when it comes to grabbing those opportunities, making sure they get to

10:22the borrowers, what does that look like? Yeah. You know, we're, we're seeing a lot of different

10:26options, you know, out there in the industry. And, you know, I think it's not necessarily AI that we're

10:32seeing here yet, but I think we're seeing just continued progress on the automation front, right?

10:38How does, you know, Jody originator, you know, reach out to 15 borrowers at once? How does he do it

10:44in a way that's accurate, right? You know, I think gone are days where, you know, a borrower sees,

10:50oh, on CNBC, they said rates are this, I'm going to go call and get a loan. They've already done

10:56their research in some ways, maybe that borrower maybe already has a pre-approval someplace else.

11:01And you can't just go with them, go to them with some like survey rate or rate that you've seen on

11:06the TV. It has to be bespoke to that borrower situation. And as borrowers are getting more educated,

11:13you know, I think that means that more accuracy and speed is what the technology is going to be

11:18focusing on. And we've seen that we have some offerings here at Alpamo Blue on that front,

11:23but we've also just seen that across the industry in terms of, you know, what lenders are building

11:27in-house and leveraging maybe something from our product and pricing engine to build a unique

11:32experience for the borrower. But it all kind of comes back to that point of like accuracy,

11:37getting rid of any potential bait and switch. The last thing I think you want to do as a loan officer

11:42and call somebody and say, hey, I can get you a five and seven eights. And then you actually run

11:46their information and it's a six and a half or a six and three quarters. You've lost a ton of

11:50credibility right there. So we're seeing more and more focus on that accuracy and then the speed to

11:57that last point I made as well. So I want to dig in a little bit there because you even said like,

12:01you know, borrowers come to the table. They've, you know, they've already done some of their own

12:05research. They're much more informed than in the past. So how do lenders use technology to be even,

12:12you know, their mortgage advisor when they have a lot of information already?

12:15Yeah. I mean, I'll give you an example. I, you know, as many people in the mortgage industry

12:21who then interact with their family or their friends, you know, I have people who reach out

12:24to me who are like, hey, should I refi? You know, chat GPT told me the rate is X, right? So

12:29you can kind of turn it on them by, you know, talking about, hey, you know, where are trusted

12:35sources that you could look at in terms of how you should, you know, educate yourself even more and

12:40more and more, but there's technology there. And, you know, we've released some features,

12:44our originator assistant, for example, that helps loan officers kind of look at those products that

12:50people maybe just didn't qualify for. They needed to move their LTV like this. They needed their FICO

12:54score to be this instead. So it's kind of taking that step that the borrower is making where the

12:59borrower is now, well, now I got an AI assistant. I got chat GPT. I got Gemini. I've got, you know,

13:04philanthropic, all these different services. You know, I think the technology providers that are

13:08helping folks go to that next level, they're coming up with their, they're basically their

13:12inverse option, right? Like, hey, yes, they came to you with this offer, but you can make it better

13:17by advising them to do X, Y, and Z on their loan application. Well, I feel like if you think about

13:24the lenders who have that capability versus the ones who don't, like a huge advantage to be able to

13:30be agile like that, and as conditions change or, you know, seeing those opportunities or being able

13:36to say, like, if we just can fix this one thing, here's the opportunity that you have.

13:42Exactly. And it goes back to that previous point of moving from just taking the application and

13:47moving them through the underwriting process to being an advisor. You know, as we see, you know,

13:52the share of non-agency loans grow and it becomes less cookie cutter from a standpoint of what are the

13:58eligibility criteria, you know, you're going to see that loan officer have to be even more of an

14:04advisor as we look at these non-agency products and some of the lack of fungibility that we have

14:09on the guidelines there. So it's another trend to kind of, you know, speak to that overall trend of

14:15like moving from, you know, loan officer to advisor. I love that. Okay. So Optimal Blue just launched

14:22Capture for Originators. What does that do? You know, tie that into this conversation.

14:28How does that help lenders as they're trying to serve their borrowers?

14:32Yeah. So, you know, we've done some refi work in the past in terms of like, hey, can you expose

14:40our pricing engine? Right. And we've sold that to lenders over the years in terms of helping them

14:46create an experience, right? Like, does it, you know, we believe that the accuracy of our PPE is

14:51unmatched and that starting point of accuracy is really important, right? You want to lead with your

14:56best foot forward here. And so what we do, we've, you know, we've internally developed

15:01and work with some partners to create this new product Capture for Originators, which allows,

15:06it's automatically mining your portfolio previously done business. And it also is helping the loan

15:13officer look through their leads and say, hey, you talked to this guy about a month ago. We've kept

15:18some notes from that interaction. Maybe you should reach out to them again. And like a superpower of this

15:24thing is that in like three clicks, you can go from mining your database to an actual stylized

15:30product presentation to the borrower that's delivered via email. So this is something that,

15:36you know, if, you know, previous to a product like this, you might be, you know, might take

15:40you 15 minutes to, you know, jump in between your LOS, jump in between your PPE, pricing out each

15:45individual scenario, and then taking it and then putting it into, you know, a PDF or an Excel file,

15:51and then emailing it. At this point, you could be scrolling through here, and you could have this

15:55out in about 90 seconds to the borrower. So as it's starting off that, that, that, you know,

16:01kind of like baseline point of accuracy, right, all connected to the PPE. And then it ends with the

16:06speed, right, of like, okay, now I have these three different scenarios. You know, this guy was in a

16:11conventional loan, 30 year, but maybe I should put him into an ARM loan. Maybe I should put him in a 15 year,

16:16maybe he was in an FHA loan, and I want to convert him to a conventional loan and save the mortgage

16:21insurance premium. We could stop, we could save all those different scenarios. And then you can run

16:27them at your fingertips whenever you want. But at minimum, we're doing automatic searches for people

16:33on a monthly basis as well to kind of tap the loan officer on the shoulder too. So it's not just,

16:37hey, you have to, you control your own destiny. It's a little bit of big brother helping you and

16:41you controlling a piece of your destiny. But we love how it takes it from the PPE to the borrower

16:48in about 90 seconds. That's, that's the big selling point there. Well, and to me, you know,

16:52a lot of people, like you said, they're using their own GPT, they're using chat GPT. Is that

16:56accuracy part, the fact that it is, you know, connected to your PPE and, and the lender knows,

17:03like, this is an accurate statement. This is what's true. I can rely on this. I don't have to

17:08spend time rechecking, like, is chat GPT making that up? Where are they getting that from? But

17:13like, this is what they can actually offer. Yeah. I mean, the PPE is the source of truth

17:17when it comes to pricing, right? So that's where, you know, lenders are managing their profitability

17:22across the whole industry. That's where they're managing, you know, if there's ever like a loan

17:26officer or originator or a branch specific price adjustment that they're doing from a margin

17:31perspective, it's all in the PPE. So it's as close as you're going to get to that, like,

17:35that, like, point of truth, as you will anywhere else in the industry. So connecting that to your

17:40origination and your lead gen business is a natural step forward. And we believe it's a

17:44better experience to the borrower and loan officer as well. I love it. Okay, well, what else is Optimal

17:48Blue up to between now and the end of the year or early 2026? Yeah, we're thrilled to be in the

17:54planning stages of our of our 2026 Optimal Blue Summit, which will be February 23rd to 25th in

18:00Scottsdale. If you're an Optimal Blue client, you got to come. This is the best place to hear about

18:05everything that we're about to announce. We've you know, when Joe Tyrell came on, we've kind of

18:09changed our release schedule of products, there's going to be a plethora of products announced there,

18:14as well as a lot of thought leadership and different strategic things that we'll be announcing and,

18:20you know, presenting to our clients. We actually just announced our speaker lineup, which includes

18:24Michael Phelps. I didn't think that would get better than Tony Hawk last year. But I think my I

18:29think Michael Phelps and Tony Hawk are on that same, you know, level of athletes. So we're really,

18:34really excited to not only have this great content and great product releases, but also going to have

18:39a fantastic speaker who everybody in the world knows Michael Phelps. So I think that's a it's a

18:45really exciting one. No, it's great. I went last year, I'm going this year, or 2026, really excited

18:51about that. And it'll be interesting to see what you guys release. You did a whole slew of announcements

18:56last year, like pretty big stuff. So looking forward to that. Onwards and upwards. I've seen I know a bunch of

19:04things that we're going to release. It's going to be really, really exciting. It's going to move the

19:06industry in the right direction, I believe. Mike, thank you so much for being on love talking to

19:10you. Appreciate you. Appreciate Sarah.

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