00:06I'm Allison LaForgia, and today I am sitting with Diane Yu, the CEO and co-founder of Tidal
00:12Wave. And we are being joined by Corey Shelley, who's the owner and chairman of First Colony
00:17Mortgage. Thank you guys for joining me today. Thank you. It's a pleasure. So Corey, I want to
00:23start with you. First Colony first started talking with Tidal Wave on the retail side.
00:28Yes. And you then jumped in and jump started on wholesale. What problem were you trying
00:38to solve? You know, with wholesale, we were growing so fast and margins are thin and scalability
00:44is hard. So what we saw with Diane's product is it's a way that we could scale, cut out
00:49a lot of time. It solved a lot of our problems, basically, just for us to be able to keep
00:54up
00:54with the growth without having just to keep hiring and hiring, hiring more people.
00:59Diane, most people think of AI as a borrower facing tool. First Colony is using Tidal Wave
01:06differently on the wholesale side. Walk me through what that actually looks like in practice.
01:13So let me start with a story. A story where, you know, Corey and I sat together for lunch.
01:18I believe at this point is December, December 2024. Yeah. So we sat together and we talked
01:26about retail opportunity. And then I shared with Corey my AI suite agent that we're planning
01:33to build. You know, we started building but hasn't gone out in production yet. And Corey was
01:38like, you know what? You're going to need volume. You're going to need real loans going through the
01:43volume to help you to improve your capability. Why don't you pump the volume into, you know,
01:48my wholesale? Because I have a wholesale division. It's going so fast. And then we were, hey, you know,
01:54that's the ideal situation because I want to forward deploy the team working with a lender together to
02:01get a real production volume in order to build a solution. I never really liked building the solution
02:07in the Avid Hover. So we worked together for a year and then, you know, basically really looking
02:13at the production volume, how to build the right solution for wholesale. And then now 100% of wholesale
02:18volume from Corey's wholesale division is going through solo, going through our catalyst solution.
02:25That's amazing. So you were really leading edge with this.
02:28Well, we saw Diane's vision and what she needed to do. And it's a solution to the problems because you've
02:32got, we went from doing very little wholesale volume when we started all the way up to 600
02:38million within about a year and a half. And Tidal Wave was a big solution for that because just the
02:44scalability it creates and the time saving it, but the efficiency is also like wholesale runs on smaller
02:50margins for sure. So having those efficiencies just is like rocket fuel for our company.
02:57Now, wholesale lending means that your team is reviewing loan packages that can range
03:02hundreds of pages from multiple originators with different formats. Explain how your process has
03:09changed and what did it look like when you started versus what it looks like now?
03:15I was talking to Nick Christensen. He's a member of our team here at First Colony,
03:19one of the best minds I've ever met in mortgage. And he's saying that basically the wholesale loan
03:22packages are anywhere from 500 to 1000 pages. And the time that we wasted, I won't say wasted,
03:29but we call it stare and compare. Bringing in those thousand documents, organizing them out,
03:34dropping them in the correct spots for our teams to go through. And what ended up happening was Tidal
03:40Wave took those thousand pages, immediately organizes them for us. But the biggest thing that it does,
03:46it wasn't just the organization. It starts to correlate all the different, the birth dates for the borrower,
03:52to make sure they all correlate through all the whole process. The credit, the income, the bank
03:59statements, it just makes it so fast and smooth that it just, how do I say this? You kind of
04:05have to
04:05break how you think about mortgages and stop trying to get to underwriting. Everything was conveyor belt
04:10for the whole history of mortgages. You're trying to get to underwriting. With Diane and Tidal and what
04:16they've built, underwriting starts the second the borrower uploads everything. So we're kind of
04:22breaking the whole milestone or the different points in the process. It really does just, everything
04:27is happening all at the same time. Fast and smooth is not something we hear a lot in mortgage. Diane,
04:34you built the doc assist and asset assist that we're talking about here. And for your story,
04:41in partnership with First Colony, what did collaboration look like? And why does it
04:46matter that you had a customer help shape that future? It takes a very different approach because
04:52many companies, they started with a traditional product design and you have a team designing a
04:57solution. You think on the work and then build it and then release to production and customer look at
05:03this and saying, wait, this is not what I want. So to be able to deeply collaborate with a team
05:09that
05:09having the real loan going through the system and then having to do all those real work to see to
05:15help. And then that makes a huge difference because you have, you are so much confident that your
05:20solution is going to work. It's going to work for them. It's going to work for other lenders too.
05:26Now, clearly it worked because you started with wholesale and now you're doing both retail and
05:30wholesale on Tidal Wave. Where are you seeing day-to-day impact? You know, it's the ultimate time saver
05:35from everything from the loan officer all the way through closing. Like I said before,
05:42the AI literally takes out all the whole conveyor belt model and just speeds the entire process up
05:46for the buyer. So we're finding the problems way early in the in the loan process instead of
05:50at the very end with the underwriter. So my loan officers love it. I'm getting messages and texts
05:56constantly saying, hey, this is the greatest thing that we've ever used. I'm having my underwriter saying
06:00we're saving so much time not having to go through all the bank statements, finding all the problems.
06:04The AI is showing us everything we need to see immediately. So those are your two probably
06:09highest cost centers. And you've just reduced all their time to be able to be more efficient and
06:13work on different things. I have a spicy question for you. Sure. There's a lot of tech in mortgage
06:19right now that's very exciting, has really flashy demos. But then when you try and run real loans
06:26through it, all of a sudden nothing works the way that you thought it did in that very pretty demo.
06:32How do you think about balancing compliance and accuracy while you're touching what can be a 700 page
06:41document and ultimately one that determines if somebody gets a home or not?
06:46Oh my god, that's a spicy question. So in these days with AI, one of the benefits is you can
06:57easily
06:58create a proof of concept demo. Looks as if it's working. Okay. And it looks pretty polished and looks okay.
07:08But it's not until you have the real origination going through, you realize, wait, this doesn't
07:16right. Wait, in that situation is incorrect. So what it takes, there's a huge difference between a demo
07:22and the real production product. A production product needs to go through not only works as a demo what it's
07:30supposed to do. And also at the same time, take all those complex scenarios to be able to laser accurate
07:36and calculate everything and run through all of those, providing the summary is going to help the
07:42origination team. That's a different story. And that's why Tidal Wave is doing a purposely built capability,
07:49not just using the generic large language model out there. We're building a capability on top to make sure all
07:56the questions that we answer is in compliance. And all those, you know, information we provide to the loan
08:02officer is accurate and takes a team. It takes a team who understand the platform, who understand how to truly
08:10build the system to make this work. Well, Corey said fast and smooth. What more can we ask for from
08:16our
08:17technology, right? Fast and smooth and compliant. Yep. So I want to end with a forward looking moment. Corey, what's
08:25next for
08:26your first colony? You know, essentially having a partner like Diane and Tidal Wave, it gives you a lot
08:32more confidence in growth and what can be possible. Like I said, we're growing very fast right now.
08:37We're pushing a lot of loans through Tidal Wave, but then I feel like we're just scratching the surface
08:42on what's possible because the more we think this new way of doing mortgage of not the conveyor style,
08:48but constantly being in communication with the home buyer, finding the problems fairly early on,
08:53solving them very early on. I'm watching the team think different and finding better ways to do mortgage
08:58because of the Tidal Wave product. Now, Diane, what does the wholesale use case unlock for the industry?
09:06I would say that they unlock a brand new opportunity because most of the customers knowing us as a point
09:13of sale
09:13solution and the point of sale solution was a plus. We're always saying that we're a point of sale plus
09:18with our agent suite, but with a wholesale usage, you're going to see that our agent suite can be
09:26can be deployed stand alone as a standalone solution. Instead of, you know, basically it doesn't have to
09:33always work with a point of sale. So you could utilize our agent suite in a way that can benefit
09:40your processors, your underwriters with a large volume going through the system.
09:45Well, Diane, Corey, thank you so much for joining me today. I can't wait to see what's next for
09:50Tidal Wave and First Colony. Thank you. Thank you so much.
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