From flames to financing: Firehouse Mortgage is serving heroes and the underserved

HousingWire

Today on Power House we are bringing you a conversation between Zeb Lowe and Aaron Clark, a firefighter and co-owner of Firehouse Mortgage, a Houston-based mortgage brokerage that is owned and operated by first responders and veterans. Aaron shares his journey from fighting fires to becoming a loan officer and how a layoff led to the creation of Firehouse with his wife — who will be joining us on the show later this week!   Aaron discusses their approach to serving veterans, minorities, and low-income borrowers, his concerns about AI's impact on personal relationships in mortgage, and the challenges of staying competitive as a smaller, relationship-focused company.   Here’s what you’ll learn:   How Aaron transitioned from firefighter to real estate agent to loan officer   Why Firehouse Mortgage's team of first responders creates unique trust with clients   The community-focused business model that prioritizes giving back over profit maximization   How they serve veterans, minorities, and low-income borrowers with transparent pricing   Aaron's perspective on AI threatening personal relationships in mortgage lending   The organic growth strategy that built their business through community connections   Related to this episode:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠   ⁠FireHouse Mortgage⁠  https://www.firehousemortgage.net/  ⁠Firehouse Mortgage | LinkedIn⁠  https://www.linkedin.com/company/firehouse-mortgage  ⁠Aaron Clark | LinkedIn⁠  http://linkedin.com/in/aaron-clark-05428ab6  ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠HousingWire | YouTube⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠    The Power House podcast brings the biggest names in housing to answer hard-hitting questions about industry trends, operational and growth strategy, and leadership. Join HousingWire president Diego Sanchez every Thursday morning for candid conversations with industry leaders to learn how they’re differentiating themselves from the competition. Hosted and produced by the HousingWire Content Studio.

Transcript

00:00I'm Zeb Lowe here at the George Bush Library in Dallas, Texas, and today I'm speaking with

00:04Aaron Clark from Firehouse Mortgage. Aaron, thank you for joining me. Nice to meet you. Yes, sir. So

00:16can you please, before we get started, can you kind of introduce yourself to our audience a bit?

00:20Okay, my name is Aaron Clark, a career fireman on a small mortgage business with my wife.

00:28That's pretty much it, Marine Corps Veteran. You have one of the more interesting backstories leading up to

00:36the, you know, getting into the mortgage industry of anyone that I've heard of or met so far in the

00:40industry. So can you walk us through, walk the audience through your journey to becoming an LO

00:46and then running your branch the way that you are? Okay. Just like every fireman has a side job and

00:54I used to do tile, got tired of getting up and down all the time. So actually one of my firefighters

01:00owned a RE-MAX. So he persuaded me to become a real estate agent. So I was working with him as a

01:09real estate agent. And then Model Mortgage, part of RE-MAX, he was one of the first to jump on board and

01:19said, Hey, I'll do it. Cause he liked to volunteer for stuff. So he wanted to open up a modern mortgage.

01:24And he asked my wife, Hey, why don't you get your LO license? And I was like, are you crazy? Like

01:30she runs your whole office? Like, what are you going to do if she's an LO? Who's going to run your,

01:35your real estate? So I went and took the test and became his LO. And we started from scratch

01:43and it was pretty good. Uh, but wife and I took a vacation for about a week, came back and he said

01:52he couldn't afford us anymore, even though we were commission based. So that started Firehouse Mortgage.

02:00Right. Let me ask you. So, uh, and this probably speaks to my ignorance about a lot of things.

02:06Whenever I, I came into the industry, as I mentioned earlier, as a, uh, as a professor

02:12and I got pulled into that by a friend of mine at a local mortgage company. And he wanted someone,

02:17he was, he was a great salesman one-on-one, but he needed someone that he could talk, that could talk

02:21to go to realtors luncheons or larger events or go to first time home buyer seminars and teach or

02:28educate people, larger groups of people. Cause if he got in front of more than two or three people,

02:32he would just kind of clam up, uh, which is where I came into play. And I was very naive. I didn't

02:38really know anything about the industry. And I had, I went to school, I, I got, I passed my test.

02:45It was about three days into actually being a licensed LO that I realized it was a sales job.

02:50There was a sales component to it. I had no, I had no idea. I just thought that the loans magically

02:56came to me for some reason. What like, what perceptions did you have about, and maybe this,

03:03this was, uh, not as much of a shock, but since you were already a realtor first, but transitioning

03:08from being, uh, a firefighter into, you know, real estate and then into, uh, the, the mortgage industry,

03:16what perception, uh, perceptions changed for you that you initially had, uh, or did you, did you go

03:21into it with your eyes, you know, totally open and nothing was a shock for you?

03:24I went and kind of opened my first, once I got licensed as a loan officer, I realized,

03:31well, hell, I've been getting screwed all this time. Bought two houses and I'm like, man,

03:36what they're charging me. That's, that's crazy. Yeah. So that's, we tried to make sure,

03:44and that was kind of some of the tension with me and the, the RE-MAX owner is, hey, look,

03:48you can't hit a home run on every loan. Right. So we set parameters to have better pricing.

03:54than hit the home run. So we stayed busier, but at least word spread and it basically given back to

04:02the community. Right. So that, that was the biggest eye opener is how many people don't know how to do

04:08certain loans, but we will turn away loans. Like first time or like, uh, construction perm. We don't

04:18do that. Like I tell them, I, I, I'm not good at it. I don't want to learn it. I don't have time to learn

04:23it. So we just concentrated on the loans we know how to do. And that's pretty much what we focus on.

04:30Did you have at your, at the, at the first mortgage company where you worked at, did you have a, uh,

04:34I guess a mentor of sorts that kind of showed you the, uh, showed you the, showed you the ropes?

04:40Yeah. Uh, nope. It was hop in there and fight through it. Actually, I leaned on the wholesalers

04:48because you know, that was one thing and they'd be like, Oh, you're a brand new LL. Why are we going

04:51to trust you with the loan? But it was like, look, that's fine. But these wholesalers been doing it for

04:56years and years and years. I tell them I'm like the, like Geico auto insurance. I'm the middle

05:02man. Like I'm going to find you the best deal, but I have a team behind me that does it for all the

05:07time. So that kind of wins them over a little bit. Well, talk to me about Firehouse. What makes Fire,

05:13can you explain to the audience? I know what does, what makes Firehouse, uh, such a unique, uh,

05:18branch or organization? Uh, pretty much fire. When we did Firehouse, it was, it was myself and the

05:26wife and my wife. And then, like I said earlier, all firemen have side jobs. So I started most

05:35firemen in the city. I, I, I'm in, they're all real estate agents. So I talked to a couple other

05:42firemen and said, Hey, why don't you get your loan officer? We'll push towards these firemen,

05:47that real estate agents to get business. So we're for a while, all we had is firemen and a paramedic

05:54was our loan officers. So nobody was full-time. Everybody was part-time.

05:59And then we just recently picked up a teacher. So it is give back to the community. So everybody's

06:05like, man, y'all are killing that at Firehouse. Y'all got lots of money, but we give back to the

06:09community. We were one of the probably top 10 buyers for the local FFA, uh, the kids raising animals. So

06:17we're a big buyer there. Uh, we just like to donate back to the community. It's not, we're not in it to

06:24get rich. We're in it to help other people. My processor was a fireman's wife. So, and she

06:32would process when she had time running kids back and forth. So it was more of a community, give back,

06:40help other firemen, make ends meet. That's pretty much how Firehouse was.

06:44Was it, was there any bit of, it was like a kind of a strategic, uh, vision for, for growth? Like

06:50we're going to acquire an EMS LO. We're going to acquire a teacher, uh, that's an LO, uh, you know,

06:55the processor. It wasn't planned, but we go to different events and there are people, well,

07:01wait a minute, can I tap into the fire department? Because it is the sphere of influence and veterans

07:06want to work with veterans. Firemen want to work with firemen. Uh, same with police, you know, so

07:11did we like strategically plan that's who we're going to hire? Not really. Like the paramedic,

07:19her husband's a real estate agent that I trained as a fireman. Right. So he's like,

07:24Hey, my wife's not doing anything. Let's make her on her time off, be a loan officer.

07:29So it was organic, but at a certain point you kind of realized we got this, we got this thing now.

07:34Definitely works for us. Uh, we don't market really though. So that kind of hurts us. We're

07:41busy enough, but we don't have to hit a certain number every month. Right. So like companies,

07:46Hey, this is our overhead. We have to do this. We have to do that. We're kind of,

07:51we're not in that position. We do it more to help the community. So would you say that's your biggest,

07:56uh, that's what sets you apart the most is your, uh, your community, your community service or what

08:02you give back to the community beyond, like I said, beyond the obvious, uh, differentiator.

08:05I would say give them back to the community. And we, I, we set our comp so low that the real estate

08:18agents didn't have to be salesmen. They just had to get in front and show them the numbers and then go

08:23that way because a lot of firemen, they're give me the ball coach guys like football. Uh, so they

08:29can't carry on the conversation, but numbers don't lie. So that's more, Hey, we're going to treat

08:34everybody the same. Uh, and it's, it's worked out for us. Let me ask you this. So, uh, talking to

08:42LOs across the country, there's really, there seems to be two different mindsets on who their customer

08:46is. And I don't, uh, I mean, I have my own, uh, opinions obviously, but it, but it goes back and

08:53forth between, you know, some lenders and LOs and branch managers. They think that the realtor or

08:58the real estate agent is their customer. And then I know a lot of LOs that are equally successful that

09:03think that the client, the borrower is their customer and the real estate agent is their partner.

09:10How do you, where do you land on that divide? How do you see your relationship with realtors versus

09:16borrowers on who is your, who do you identify as your customer?

09:22We kind of do a little bit of both, but there's realtors we're not partners with

09:29because we don't do anything special for them. Meaning we tell them straight up, Hey,

09:34we're going to close your loan quick, let you know if there's any issues, but that's, that's all we're

09:41going to do. Uh, and it's more about we lean more towards the borrowers because they're going to

09:49tell their friends more than real estate agent. Uh, I mean, with the history of being a real estate

09:54agent, you, you would see agents would say, Hey, first loan officer that'd bring me cookies. You'll

09:59get my next loan. Like we weren't built that way. We're, Hey, we're going to take the application.

10:06We're going to treat them like a human and we're going to close the loan. So believe it or not,

10:11I would probably say 50, at least 50, if not 75% of our clientele loans, we close our minority.

10:20That was actually going to tie into my next question, which is, well, originally it was

10:24going to be, who's your ideal borrower type? We talked about this a bit earlier. You said,

10:28I don't have an ideal part, whoever wants to get a house basically, but who do you find yourself

10:33serving, uh, most of the time? So beyond the minority, I mean, as there is, there's a,

10:39we do a lot of firemen, a lot of veterans and we do a lot of minority loans because we, we treat them

10:46the same. And some of them like the Hispanic culture, look at firemen as bomberos and they

10:53really respect them. So they kind of overlook, I don't speak Spanish, but I'll work with their agent

10:59is kind of the go between. Uh, but it's like everything, as long as you treat somebody as

11:06a human and straight up with them, I would rather work with somebody low income that really wants

11:10to be in the house than somebody who I call silver spoon. And they just think you owe them something.

11:18I don't know. I mean, they put their pants on the same way I do every day. So,

11:21so do you find yourself going towards, or, or access a particular product type,

11:25like deep with this low income, like DPA perhaps, or first time home buyer loans?

11:29Believe it or not, we really don't even do DPAs because there's a few out there,

11:33but we try to steer them like, Hey, if you take a DPA, you're going to take a higher interest rate.

11:37Sure. And especially with the current market, Hey, you can get in now,

11:41but you can't refinance or you got to pay that DPA back. Right.

11:44So wait another few months, have the money to put down. We can get you some money to help

11:50put down payment assistance or give you a lender credit, but we kind of steer them away from the

11:55DPA. But those are the ones that really, we feel better putting them in a home because nobody else

12:01would get them in a home. Right. And how involved are you guys in, in, in credit repair?

12:06Uh, we recommend credit repair. Like we'll run our one if, but I tell them straight up,

12:10we are definitely not credit repair specialists, but we will send them recommend a couple of credit

12:18repair places or tell them, Hey, if you pay off your, your medical debt, it'll increase your score.

12:24Cause we'll do a what if. Uh, so we don't say, Oh, your credit's 500. We're not working with you.

12:30Uh, we're kind of spread out. We don't have a hundred wholesale lenders like some mortgage brokers.

12:35We, we keep to a small, we try to keep it more family where if we run into a problem, they're more

12:42likely to help us. Then you only send us one loan here or there. We're not really gonna,

12:47you know, they don't care one way or the other, but, uh, we, we kind of use the same one. So the AE,

12:53the upper management, they kind of know us. So they're kind of more, Hey, if you do this, this,

12:57and this, we can help you get them at home. Right. Uh, I want to talk to you about

13:02kind of, uh, uh, zooming out and looking at some of the trends in the industry at large

13:08at housing, where we talk all the time. I mean, so many of these conversations,

13:11they revolve around the AI buzz and the advanced technology that's coming out every day, how it's

13:18going to reshape the industry, how it's reshaping the industry now. How, one, how important is that

13:24to you today? And then how important do you feel that that's going to be for you in the next, I don't

13:28know, three or five years? I think AI wound up putting firehouse out of business. I'm not a computer

13:34guru. I hate when you call and you get the AI to answer your questions and you can't get somebody

13:40real on the phone, but I feel for our house, we're built more personal relationship type company.

13:49So I think until we get absorbed by AI, we'll just keep plucking away what we're doing. But I see AI

13:56taking over. Uh, I think it'll take over the real estate agent and you see it as an inevitability.

14:03I think so. Yeah. Cause people are more like everybody talks about the millennials and stuff,

14:09but they, they're starting to shop rates. Uh, so I think it's more, Hey, I, AI is great and you can

14:16turn loans faster. Our biggest question is how do we get them to see what our, our rate sheet is?

14:24Because people go on the bank rate, they go on the lending tree and those are the bigger broker shops.

14:29So, I mean, I'll tell everybody all the time, like, Hey, AI is going to force all the mom and pop shops

14:35out. Yeah. I can see the argument for that because I, I just look at the way that my grandparents

14:41interacted with computers, the way that my parents interact with computers, the way I interact with

14:44computers and technology, the way that my, my children do. And they're, they're growing familiarity and

14:51uh, like comfort at the things that I would not feel comfortable sharing or doing on a, you know,

14:57on a device versus my parents, right? Which were far more conservative or concerned about what they

15:02were sharing or advice that they were taking versus my grandparents, you know? So, uh, uh, you know,

15:08I don't know what generation it is that that might be the, the generation's like, yeah, what you have

15:13it. I look at it too. Like during COVID, you know, you'd have places, no change, you know? So the bills

15:20or you can only use debit card or so it's like they're used to that. They're like, I say we're being

15:28steered in that direction. Uh, just like how many people actually get physical check stubs anymore?

15:38Right. Like, Hey, you have to go online and you know, we deal with a lot since we deal with,

15:43you know, the minority, like how do I even do that? They don't know. All they know is they get paid

15:48direct deposited. Nobody gets a hard check hardly anymore. Right. So I think their

15:54society's pushing where the hands on actual passing paper is going to be gone. Sure. Yeah.

16:03And then when we get to like the AI decisioning, right, as well, whenever, uh, you know, people,

16:09a lot of the studies that have come out over the past year or so, uh, with people's reliance on taking

16:15actionable advice from like Grok and from chat GPT and there's growing reliance on telling them

16:19not information, but this is how you live your life. Correct. Right. And so,

16:23when you have my children or my children's children for sure growing up in that world where

16:29from the time that they're born and they're interacting with these things, you have this

16:32tech God telling them exactly what to do. It's like we heard a thing, Rachel and I, my wife,

16:37we talked about where people are like, Hey, does anybody even believe a doctor anymore? Right.

16:42Because what do they do? They go to the computer and be like, Oh no, they don't know what they're

16:45talking about. It's this. So it's like people aren't trusting professionals anymore. They trust the internet.

16:51Uh, and I look at it like, like if you take your, your automotive for repair, what's the first thing

16:58they do? They hook it up to the computer and be like, Oh, we don't see any errors. There's nothing

17:03wrong with it. Like, no, it's there. It's, you know, there's something wrong with it, but they tell you

17:08if the computer AI can't find it, there's nothing wrong with it. And they let you go. So it's coming.

17:13Only people that I know that still rotates their tires and changes the oil themselves. So this is a,

17:18you're, this is a sensitive subject for me. Absolutely. Uh, okay. Well, let me ask you.

17:22So looking down the road for, for firehouse and the next, the AI tech stuff aside for the next five

17:27or 10 years, what are your plans for, uh, for growth and expansion and in community involvement?

17:33We like being small, but we're getting busy where we're either going to have to,

17:38we went real lean through after COVID because everybody knows loans slow down. So we're starting

17:46to look at our options, maybe finding a larger company, uh, to maybe go under to take my LOs and go

17:56on. Uh, I, I don't know. I don't know what the answer is. Cause I think there is going to be a boom.

18:02And if you're not ready for the refinance, what are you going to do? You're going to get left behind.

18:07Now AI helps and keeps the track, uh, since we're more mom and pop and have that

18:15personal relationship with, I'd say 90% of our consumers, they'll call us and say,

18:20Hey, is it a good time to refinance? And we tell them no, because it should get better.

18:25I mean, that's a lot of trust. Right. You also, so, uh, in anticipation of the

18:30refi, but we also trying to, if you're saying going underneath a larger lender, kind of anticipate

18:34also, you don't want to give up that purchase business either with the lower rates.

18:37Right. So be able to operate on both, both. Correct. That mortgage, you're going to have

18:44to have AI. You're going to have to have the ability to stay in front of your borrowers.

18:51Like I said, pricing wise, uh, it was crazy when I started real estate, it was like, Hey,

18:5680% of the time, whatever lender you tell them to use your client's going to use them.

19:01And now they're starting to shop and be like, wait a minute. You told me to use them. Yeah,

19:04they're good, but they're half a point higher than this one over here. So it does come down

19:09the bottom line. So we're starting to branch out like, Hey, do we want to grow?

19:14Which we really don't, we don't have the capacity to take on more. Uh, so that's what we're looking at.

19:23Like, okay, if we merge, who's in line with us, who has the same care for their clients? I know

19:30everybody says, Oh, we care about them. Truthfully. Do they really care about their clients? Right.

19:36Uh, and we don't want somebody who has a lot of wholesalers because you can't build that

19:45relationship with them. Right. Makes sense. All right. Well, we were at our time. Aaron,

19:49it was a pleasure. Oh no. Thank you. Thank you. Thank you for joining us. All right. No problem.

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