Game of Loans – Talking Mortgages with Brian Minkow
by Paul Dashevsky
October 11th 2022
Hosts Paul and Sara chat this week with Brian Minkow, Divisional VP of Homebridge Mortgage, one of the top mortgage originators in the country. We discuss the current market climate and future fo... More
Welcome to the L. A. Realtor podcast. I'm paul with great belts and I'm Sarah with glen oaks escrow and we're getting to know the industry one conversation at a time. Hey Sarah, Hi, how are you? I'm good. I just hit your mic. You did, I apologize. Are you feeling today? How do you sleep fine? Uh huh sure, sure. You did a good intro. Yeah, you're welcome. So instead of giving you a hard time, let me, let me just introduce our guest because we got a good one today. I've known him for a while. He is mortgage banker. Extraordinaire brian mink. Oh gosh, I've probably closed a dozen or so loans with him. Uh, and he is uh, he is an absolute beast in southern California when it comes to mortgages. Welcome brian. Hello you are guess your role as senior VP at prospect or your, your role was senior VP at prospect mortgage. Now your divisional VP at home bridge for six years. Yeah. And you kind of, I mean, I don't know, I know a lot of people know you in our space and, but I don't know if everyone knows that you are just every year you originate a crazy number of loans.
I looked into you and in 2021 you were the eighth highest mortgage originator in the entire country. I saw that uh, in uh, according to national mortgage news, you were the number one mortgage originator in America with 800 plus loans done. So I mean you're, you're a beast. How do you do it? You know, I, I've been in this industry for about 26 years and I think that the bottom line is you have a reputation out there of just helping the actual realtors, the actual fires. I think when you've been doing it, as long as I have, you have a reputation of if they have a hard file, they have have a problem. They have an issue. You need to call brian, he'll make it happen. And then when I break that one happen, then the realtors go, okay, you're my guy. I'm using you from here on out. And that's kind of how I started.
That's been my experience with brian is, uh, if he says he can get a loan through, he can get a loan through. And that doesn't always happen because there are hard loans. There's things that come up. There's qualification issues. But like I don't know how he does it. But this guy works magic and he, he seems to get every file through that that he says he can. Yeah. So look, I don't want to call you, you and I are, I don't want to call us old. I mean we've been around the business for a few years. You're not old. Uh, definitely young at heart, but I'm guessing so we're going through some interesting times with regard to rates and mortgages values. You like me have probably seen it before. You've been through a couple of cycles. I'd love to get your take on what's going on now where this is going. The fact that we're all going to get through it together in kumbaya. Right. Yeah. I mean what's you know interesting about right now is it kind of feels like 0708 except I don't think we're gonna have the foreclosures that we had in the 0708 error.
I think that error was all about people not having equity in their homes. They do didn't put any money down so they just walked. I think now most people have a lot of equity in their homes. Most people are now actually qualifying or their mortgages. And I think what you'll find is when the consumer has money down or they have something invested in the property. They're not gonna walk and when you qualify and you and you can actually make the mortgage payment. I don't think we're gonna see that. I think we'll probably see housing market go down. It's not gonna be like 0708. I really don't think so. I think we might see 5% 7%. I'm kind of thinking the values are gonna go back to where the pandemic started where the values were then.
I think that's where the values are gonna come back at. I think right now interest rates are ugly, they're ugly. But I think that's just a short Window. I think I think the inflation numbers are gonna come down pretty hard over the next 90-120 days and I think you could see rates significantly lower maybe the end of the first quarter is what I'm thinking. But I also think. That right now is the opportunity because I have a lot of people still purchasing homes knowing hey, I can get 50,000 off 100,000 off the house right now. Come the middle of, you know, next year, Rachel drops, values arise and you'll be just rolling again. That's what I think. Reef eyes are pretty slow. Right? I mean, interest rates go up. There's no way I was going to say is anyone refined right now. So what would you say to someone who's looking to purchase a home?
Obviously the rates affect their monthly payments. What is your take on, do you just go for it and then worry about refinancing later. Yeah. Yeah. I mean, I'm telling everybody right now. Listen, the interest rate sucks right now. It just does. Although if you can afford the payment for the next six months, eight months, seven months, whatever that number is. If you can afford it, go for it. Don't pay any points. Don't pay all these costs on these loans. Get in inexpensively, take the higher rate, shut up, move on and come, you know the middle of next year, call me, I'll roll it and we'll lower the interest rate. So that's funny you, you tell your clients to shut up. I do the same thing that I think that's smart. Do you have to wait a certain amount of time to refinance? Not at all. Not at all. Yeah. There's no pre payment penalties any longer really on most loans and you really don't have to win at all.
So rates are like such a huge conversation right now. But people also seem to be confused about the difference between mortgage rates and the federal rate raising. Can you tell us about the difference between those, how the rates end up going up in the real estate industry? Yeah. So, I mean, what's been interesting about this cycle is when the Feds raise rates that that's that's not a direct correlation on, you know, mortgage rates, that's other rates like your Mastercard or Visa is your car. All that stuff. And what's interesting is over the last several times, except this one a couple of days ago, when the feds have raised rates, interest rates have actually came down and that's because the market feels okay. Maybe the federal government knows what they're doing and maybe they're able to control the inflation. Well, what happened this last time was how made a few comments about the it's gonna be very painful.
He said that like four times, right? And when he said that the market was like, oh sh it we're in trouble, We're gonna have a problem. And interest rates just right, rocketed like the 10 year went up 100 and 60 basis points in one day, which was insanity. Right. And now what's interesting is over the last couple days, it's now came right back down about about 100 ish basis points. So the market's got to feel that the federal government knows what they're doing and once they feel that that's happening rates will come down, the federal government always does this, they go from one extreme to the other. They just can't get it in the middle. If you just go in the middle life will be so much easier. But they just don't, it's good advice in the middle middle lane. So who controls the mortgage rate?
Like who decides when it goes up and down? Well, it's the 10 year bond that the actual 10 year bond moves the mortgage back securities move when that goes up rates go up and that goes down rates go down. What's interesting is we're probably already in a recession. Okay. But it was interesting. I talked to a guy yesterday that runs a hedge fund and he's, he's smarter than I am 500 times over. And he said, we're not gonna go into recession, we're gonna hit a depression and that was the first time I've heard that, which kind of got me a little whoa, Why is he saying that? What the depression? Because he thinks it's a nationwide, a global economy is just gonna get into shitter. Yeah. Going to ship it. And what's interesting is if that happens interest rates go down. It's very interesting the industry I'm in, when things go, bad rates go low, nine-11 rates dropped, the pandemic rates dropped, war rates dropped.
I mean that's kind of the way things work here in this industry. You don't need to necessarily get a 30-year fixed fixed rate loan. I mean, if you want a better rate, are there other options out there now? Well, what's interesting is normally the answer is, yes, right. Normally over the last 26 years when I've been in this industry, normally the, you know, the five years, the seven year, the 10 years, always 100 and 50 basis points right now, it's the other way, there's, there's an inverted yield curve going on right now where the short term rates are actually higher than the long term rates, which is wild, It's wild. So it doesn't make any sense. So you can't get a better rate on an adjustable. Not really know. So you might as well walk in. Yeah, you might as well do a 30 year fixed. I mean, why not? Yeah. Yeah, interesting. What are there any other loan products out there that that people need to be aware of employment type stuff?
Anything else? Oh yeah, I mean obviously right now we're doing a lot of banks, statement loans where these health employed borrowers don't have tax returns that actually show their income. So we use their banks eight minutes, we use their deposit As the income. And unlike 0708, these people are putting 20%, 35% down. So even though they're not technically showing their income, like I said earlier, when somebody's putting 2030% down, they're not walking from this house. It's not so that's kind of the loan and then obviously that interest rates higher obviously because it's more of a risk. Yeah. Let me let me switch gears because I I'm kind of interested in you and your your kind of career trajectory right in a sense, as a, as a mortgage broker. No one, no one gives you loans to do. You have to go out and get them create relationships, your your salesperson.
And I think of real estate agents and that's what this podcast is targeted at their salespeople to no one gives them a house to list. So what what are some tips you might have for folks just starting out, think about yourself 26 years ago. Or maybe they're not starting at maybe they're in the meat of their of their career. But what do you recommend in terms of sales? What do you recommend in terms of how do you, how do you gain business? I think it's very interesting because over my career, I'm on all these podcasts and I stand up in front of thousands of people and everybody asked me, hey, what's the magic, what's the the, I don't know, the secret sauce And I'm like, I don't know. I really don't know. I just worked like I, I didn't go go to college. I barely graduated high school, like barely graduated high school. And what's interesting is I find that in this industry, a lot of people, whether they're in the mortgage side or the real estate side, most people in this industry are kind of, you know, lazy.
They don't do the extra work. They don't make the extra call. They don't respond to every email. They don't call everyone back. They don't really work a true eight hour day. Right? A lot of people on the mortgage side, they'll show up at the office and I don't know, 10 o'clock, they'll get on the phone and then they'll go to lunch for a few hours, then they'll come back and work for an hour and then they'll leave, well, I'm in the office at five AM and I don't leave until seven. Right? I just work. And I think the reputation that I have is I'll make it happen. I'll get it done. And I think on the real estate side, it's the same kind of thing. I talked to a lot of agents who go out on a listing appointment and, and the, and the seller goes, hey, my house is worth 1.8. I want you to list it for 1.8 And a lot of realtors go, okay, let's list it at 18.
Even though in their mind they're like this house ain't worth 18. Not even close. Right? So I believe that the realtor side needs to be like, hey listen your house ain't worth 18. Right? It's worth 16. I'm not gonna take your listing at 18. It's not worth it to me because I'm gonna waste my time. I'm gonna waste your time. It doesn't make sense. So if you're willing to accept 16 because that's what the market is going to give you that all listing. But I think a lot of realtors don't do that. They just want to get the listing and then it just sits there and it just sits there and then when they get a 1.6 author then the sellers like 16 I'm not taking that. And then they're like in the back of their mind will ship. Dude that's what it's worth right? So I think the top realtors or the Good realtors have to be able to walk away and say look I'm gonna listed for 16.
I don't care if the other person tells you 18 it's not gonna sell there and I think that's I think a huge thing to be honest. I think the most important thing. You know what always happens with that too. I've seen it so many times where the agent will say yeah great well we'll listen at 18 and then it won't sell to sit on the market eventually. You know the listing agreement will expire and they'll let go of the agent and they'll re list it at 16 with another agent because their relationship has now been damaged you know because they wanted something that they didn't get the agent. So yeah I definitely see that a lot. Did you create relationships Brian like again earlier in your career now you know a lot of people know you and they call you but what was it like earlier you're in the office 14 hours a day. What'd you do? I would go out to real estate offices. I mean back in the day the offices were open. So I just walk in I'd start talking to people, I would go to open houses, I would just walk in saturday Sundays I get in my car I'd start finding the open houses, I'd walk in and say hey you got a you know a lender and they go well yeah I got a lender and I said hey listen anybody that puts an offer in on your house and let me pre qualify them because that's another thing the realtor looks like shit when you accept an author and then the client doesn't qualify so you get halfway through escrow and they don't qualify.
Then the fellers looking at the agent going are you serious bro? Like I just wasted this right so what I did was I kind of start in the 0201 era of saying hey let me pre qualify your buyers and the agents were like what? Why I said because I want to guarantee your commission right? Don't you want somebody to guarantee it? Yeah and then what would happen is I would either talk to the buyer and I would be able to to talk them into using myself and not the other lender or What I would do is I would get them approved, the other lender would all down or they wouldn't call them back or whatever they would do. Then the buyer goes wait a minute. I talked to this guy Brian, he got me done called me take it run and then what happened? I gained that realtor. Why? Because I earned their commission right?
That's kind of how I really you know started and now I have 800 realtors who used me. So good book of business. Yeah pretty good. So what got you into, what did you do before loans? It's funny I worked from my father that owned a paging remember the pages uh and I and I worked for him and uh he sold the company and I was unemployed and my next door neighbor I would come home every night at six and seven and this guy would be outside washing his Porsche and I'm like what do you do for a living bro. And then he's like mortgages like what's that? He's like what the mortgage? I I have no idea. And you know he said to me it's the last kept secret and I go okay, he said you sell mortgages like really definitely you do in your home at one o'clock in the afternoon watching your car.
He's like yeah I'm like get me in the business. So he got me this uh this interview with a company called Home savings of America and I got hired and actually it's honey, I'm the first loan officer that home savings ever hired that that did not have a college education. The senior vice president said to me, I'm either gonna make the stupidest mistake I've ever done in my life or I'm gonna make the smartest call I've ever made. So I wound up uh being their top guy in like one year. So it worked out worked out, worked, I mean I didn't even know what I was even doing, I would just go to a client's house, gather all this ship and go okay what do I do what I do because I had no idea and I just worked and back then I worked 20 hours a day, every day, every hour. I mean I was working, what do you think gave you the work ethic?
I mean is it just natural is it just you or I was raised poor, I was super poor when I was growing up and and being poor sucks. And I just learned from my father who worked 20 hours a day. And that's all I really knew was how to hustle how to work and I, uh, and I just, I don't know, it's just working. And now what, what's funny is so many people say to me now, what motivates you now? It's not the money anymore. It's being number one. It's, that is like still motivates me beyond. And now what's interesting is I really enjoy putting people into homes now because back in the day I would do the $10 million loans and $7 million loans and yeah, those are awesome, no doubt. But what's more enjoyable is getting a first time home buyer into their home? They've been saving for 40 years or 20 years or they're in the police or the fire fighters or the education and you, you help them?
Those people are loyal, they are loyal dogs. I mean they will call, they will send you their uncles, their brothers, their cousins, their moms or dads. And that's kind of what I really like now. Anyway, let me go back to what's going on now. Are people having trouble qualifying? I think the underwriting is still relatively strict. It's not 0708. Right. Are people having trouble qualifying as rates go up? Well, they just won't be able to service alone. What's interesting is the individuals that I put pre qualified last year, november october july of last year. They would be able to buy a let's say a $1 million house, right? Because the interest rate was, I don't know, you know three now if the interest rates at six, they don't qualify for a million dollar house anymore. So now they qualify for this 800,000 house. Right? So that's the only difference is the prior to go.
Oh I found this house. I finally got it because there were 80 offers. I'm like okay great, how much was it? Oh it's a million. I'm like uh no no no no. Right. And then you start Having uh wait you gotta do this now and now you gotta pay off this car and you got to do certain things so you qualify because if the interest rates higher, your multi payments higher and what's very interesting is $600 a month to the average person. That's a lot of money, $500 more a month. That'll either make them qualify or not. So yeah there's a lot of that going on a lot And that's not, there's nothing that's gonna make that go away imminently. I mean we don't think rates are gonna go down significantly anytime soon, but if prices go down, right? So if they make an offer now for 850 for that same house now. Now it's working exactly. And you're seeing now the sellers are are now dropping their price a little bit there, Get nancy, they want to get out of California and they want to move to Arizona Nevada texas and they start dropping a little bit.
And to be honest, I mean I'm seeing them go back to like I said prior to the pandemic, that's about where I think values are gonna go back down to maybe not that low but in that range. Yeah, yeah, yeah. So you, I think you you seem like the kind of work hard, play hard kind of guy. What do you do during those four hours a day that you're not working? I work out, I play golf. I got an auto collection that I kinda mess around with. Uh hang out with my family, that kind of stuff. Yeah, yeah, yeah. What do you see yourself? Ever you don't really imagine yourself ever retiring from this right. No chance, no chance of that happening. I love it. I I mean I might slow down a little bit and let my son kind of helped me more and kind of slow down a little bit. But yeah, I don't see myself going on.
I'm done. I'm out. I like it too much. It's enjoyable. I love, you know, helping people. I really do. I will love it now. I really do. How big is your team? My team is about eight or nine people on it. I got the processors. The yellow is oh I've got my own underwriters in house who kind of look at the file prior to sending it to the underwriter. So I've got about eight or nine people on my team and they're the ones who do all the work. I mean they're phenomenal. They're phenomenal including a really nice, slightly less handsome. Yeah, older as well. Older older brother. Exactly. He's been a huge part of this for a long time. Yeah, yeah. So last question brian, what should agents know these days? What what, what do you, if you were sitting across from an agent telling them here's what you need to know these days about pre qualifying, make sure sure your buyers, you know, making sure that if your sellers are getting the right buyers, what do they need to know right.
I mean to be really honest guys, it's get a loan officer like myself, all the work up front, make sure that buyer isn't just pre qualified. They are fully approved and ready to go. That's what why squad does because they're the best and I won't send out a preapproval letter until I know that they are approved and done. And that helps because even now you're gonna wave your warm contingency upfront or certain things like that. You have to have somebody that has done all the work because if you're at a well for Fargo Bank of America Citibank, something like that. And the loan officer doesn't do their entire job up front, that's gonna be a problem. That's gonna be a problem. So really the buying agent, the selling agent get a loan officer that actually does the work up front, it's really important.
It really is awesome. Well thank you so much. Crazy times. But yes we are, we always do right, we always do. So they always end and then things on the other side always get, just get better. Yeah, no, no, I see this is kind of a waiting out period for a lot of people that have been in this industry for a few years who think oh this is easy money, right, well now they're going oh this ain't so easy anymore. Those p people are going to go away which is awesome. And then come I think in the middle of next year we're gonna be rocking again. Yeah, I like that. Work hard. That's right. Just keep waiting, wait it out and work. Thank you brian Always, always a pleasure man. Thank you guys. Thanks so much. Thanks for joining us for today's episode. I'm paul with great builds and I'm sarah with glen oaks escrow and if you like what you heard, make sure to subscribe rate and review if you'd like to get in touch, please email us at L.