Melissa has over 20 years of experience within the mortgage industry, and her main focus is to engage with the Lender Members and Preferred Partners of TMC. Langdale oversees TMC’s daily structure and high-level management of financials, events, team processes, and strategy. Langdale has extensive industry experience focusing on business operations and development, sales, recruiting, marketing, capital markets, servicing, quality control, compliance, and risk management.
Intently focused on learning and experiencing every part of the business – Operations, Sales, Business Development, Recruiting, Marketing, Capital Markets, Servicing, Quality Control, Compliance, and Risk.
Melissa is also passionate about the community that she lives in and the communities her organization serves. She serves on the Board of Directors for the largest Home Builders Association in the country, the American Mortgage Conference, and the NC Banking School.
In this episode:
- Affordability challenges in the real estate market
- Driving factors in home buying
- Potential harm of credit card debt to mortgage qualifications
- Major upcoming trend in the future of lending in American homeownership
- The future of AI in the lending industry
Episode:
Narrator  Welcome to The Norris Group real estate podcast, a show committed to bringing you insights from thought leaders shaping the real estate industry. In each episode, we’ll dive into conversations with industry experts and local insiders, all aimed at helping you thrive in an ever-changing real estate market. continuing the legacy that Bruce Norris created, sharing valuable knowledge, and empowering you on your real estate journey. Whether you’re a seasoned pro or a newcomer, this is your go-to source for insider tips, market trends and success strategies. Here’s your host, Craig Evans.
Craig Evans  All right, welcome back. Today, we’re excited to have the second part with Melissa Langdale. Today, let’s get started. So let me you know, pivot a little bit to use your your language there. I want to look at some stuff that’s really affecting toda, right? We, the biggest thing in the market right now that everybody’s talking about is rate, right? You know, there’s a lot of things of, is it? Is it price damage, or our price that is, is potentially slowing the market or stalling the market? Or is it interest rates, right? So, if we can just want to take a look at history of what the interest rates are, compared to where we were in the past, where we are today, in the past 54, 55 years, we’ve got rates that have kind of run the gamut, you know, we’ve been as high as what I think 18 and a half to, we were down to sub three, you know, mid to high twos. You know, we’re looking at, I think we were looking at the average on that is around 773, 774, something like that since 71, I believe it was, you know, as I’m looking at that it’s interesting, we just on fixed 30 for FHA, we just kind of kept last I say, can’t we just shifted back up to I think we’re at 7 and an 8 roughly. So when you look at it, you know, everybody’s crying that men, the rates are outrageous, they’re outrageous, how are we going to get back? But the reality is, we’re half point off basically, from what even par is for the last 50 plus years, you know, we’re right in the middle of that. So I guess my question is, what is the Mortgage Collaborative doing with their lenders? What kind of messaging is going on to change the perception, so when you start getting people off the sidelines?
Melissa Langdale  Yeah. Oh, gosh, that’s such a good question. Um, you know, it’s, this is a hard thing, right? I mean, it’s it, there is kind of this, this chicken in the egg dance is happening right now. Is it the right, is it you know, but it really I think that the poll, so the challenge is really affordability. And at the the kind of lock and effect that you hear about all the time, right? Are there people that are truly staying in their homes, and not selling because, you know, they really don’t feel like they can afford that next home. So there is a component of that that’s happening right now. But, you know, affordability as a whole, right, you’ve got inventory that’s low, so people aren’t willing to sell. So inventory is low. Demand is still high. So right, so you’ve got this really high demand, you’ve got interest rates that are higher than they have been in the past and what we’ve started to see now applications by the way, applications have started to go up. So we have started to see really some positive movement, really over the last couple of months in that regard. But the baseline challenges you’re talking about around affordability, and this is kind of, you know, how much home can I really afford or attain, right, you know, what’s attainable for our family is a challenge as a whole, especially for first time homebuyers that may not have that high payment may not, you know, have the ability to kind of step in and be able to aggressively negotiate for that home that just came on the market that happens to be in their price point. So there’s lots of things that I see lenders doing right now. One, they’re starting to get kind of creative and how they support customers going through that process. If they have somebody with a lower down payment, or they have somebody that really, you know, is at a price point that they have to get really aggressive in that marketplace. I’ve seen lenders start to do closing guarantees with like cashback for sellers if something doesn’t happen to close on time. So we’ve started to see some things like that. But there’s lots of questions right now around like the NAR settlement too and the end fact that that’s going to happen on those particular buyers too. So we could probably go a billion directions on affordability. But yes, it is a challenge, you know, kind of back to your initial question, yes, it is a challenge. Lenders are starting to get creative, but I don’t know that there are anybody that has like, you know, that secret sauce that they just figured it out, and are completely helping every customer that that comes their way, I think customers are starting to get to the point, though, where they’re more comfortable that this is our new reality for now. And my family has to move because right, I have to relocate for a new job, or our families growing or we need to downsize or, you know, whatever the case may be, I mean, our industry as a whole is called to serve consumers at those big life moments that happen. You know, starting a family, you know, kind of downsizing, as I mentioned, relocating for, all of those are points in times where customers really need us. And those things will continue to happen regardless of the rate.
Craig Evans  Right.
Melissa Langdale  It’s just kind of helping customers to be able to navigate what really is available to them at the time that they’re ready to buy.
Craig Evans  And you know, when we’re talking about the affordability side of it, there’s a lot of things like you’re talking about that come into play there. And one of the things I’ve been looking at lately is, especially with the time that people are staying in their homes, you know, used to be only a little over seven years, I mean, we’re up to what people are holding their houses for 13 years now, you know, that lag really catches up that creates, that in itself creates a, an entirely different supply situation. And when the demand is continuing to ramp up, that obviously directly affects affordability. One of the things you know, we’re based out of South Florida, one of the things that we’ve seen a lot of specially because of the demand after storms and everything that’s happened here over the last three or four years, especially with COVID. And just the whole process, right for the last three years, four years that everybody’s seen it, but from a timing perspective, you know, one of the things on the lending side that we’re seeing a lot of people ask on is, is rate locks, are you guys seeing, you know, typically, you know, you’ve got a shorter term for rate lock, definitely understand why things are moving and shifting and lenders have to hedge their bets on where that’s at. You know, I’ve seen in the last, probably four months or so, a few people that I mean, there’s one lender here in the market, that’s actually got a 12 month rate lock. I thought that was an interesting process that it couldn’t go up, but it could go down. Are you seeing that as a tool that more lenders are coming out with to try to provide that for customer?
Melissa Langdale  You know the long term rate lock is actually it’s been around for a really long time. The because it you know, I used to do a ton of new construction and had some fantastic partnerships with builders in North Carolina. But the so we use that all the time, I think the so it’s interesting to see lenders start to look at opportunities like that, where they’re looking at, whether it be a rate by down or kind of lock solutions, like you mentioned, to help people to feel comfortable about where rates are today. So that those are all like little things that lenders are looking at long term rate locks, rate buydowns, are there opportunities for them to, to partner with companies on down payment assistance options, you know, all of those things that can help customers to be able to feel more confident and comfortable and navigating the process.
Craig Evans  Right. So one of the biggest things that I’m seeing, you know, there that shouldn’t say that, I’m seeing that, but people are talking about, you know, and I’ve got my own opinions and beliefs on some of it. But you know, a lot of people saying the two, three and 4% mortgage rate is just gone. You know, me personally, I think there’s a few things that if they happened, could potentially push us back that way. You know, especially when you’re talking about unemployment rate, if that climbs I think there’s a few levers that if they’re if they’re pulled, so to speak, that could definitely send us back that way. But what is your belief? I mean, as a collaborative unit, I’m sure you’re talking about but do you see fives and sixes at all? Do you see it in the near future? What What’s your I’m not asking you to wave your magic wand. We understand you don’t have the crystal ball sitting there. But you know, as you guys do what you do, what do you see in that term?
Melissa Langdale  So I think there’s a couple of things number one, you know, like you said, I don’t have a crystal ball, there’s no like, I take knowledge that I happen to you know, have that nobody else in the industry has.
Craig Evans  We won’t hold you accountable for what you say right now.
Melissa Langdale  Yeah. Somebody will, there’ll be a video tomorrow they’re like Melissa said, rates are gonna be x in the next 12 months. But no, I don’t, I totally don’t have a magic crystal ball. But what I can say is I do feel like there will be an opportunity for rates to go down. When that will be, nobody really knows, I think it is going to be longer obviously than a lot of people thought it was going to be a lot of this same sentiment or this, late last year, the sentiment was really kind of early spring that we’d start to see some relief. Obviously, we’re still in the midst of things right now. And I don’t know that we’ll really have a Fed rate cut until late this year, which means, you know, spring market next year will start to probably have a benefit for a lot of lenders. So that we all know what’s coming. The reason my tone is probably what it is, is because the the number of customers still have rates underneath 6% is, is astronomical, right. And so even if rate to do have some relief to them, the opportunity to kind of refinance the marketplace is still going to be a lot smaller than it was in the past. And so I do think we’re going to see a little bit of volume uptick, when that happens, probably people getting off the fence and say, Okay, this is my you know, this is my moment to try to buy. But when that happens is the demand increases, what happens to prices, right? So prices are going to continue to go up, you’re going to still see that same affordability and attainability challenge that we were talking about. So you know, I don’t know that we’re necessarily going to solve the affordability challenge with lowering rates, but I do think it’ll spur some momentum in the marketplace, it might help purchases, you know, increase just a little bit and open up the door for some refinance market, but we’re not going to see, like a COVID hit right where we have like half the market refinance in a very short amount of time.
Craig Evans  And that’s always interesting, you know, when we, when I want to speak in different places, you know, that’s constantly reminding people, especially from an affordability standpoint, and the supply and demand aspect of that, you know, you know, I try to remind people listen, when you’re talking about some 40% of the population has something, you know, as a note with a four or less in front of it, you know, and you start looking at the ones that continue to ride that, that to the bottom and, and got with sub threes, you know, you get to where their mortgages is worth more than their home is, you know, and has a bigger value than their home. So, you know, there’s definitely a large group that’s not going to jump on that bandwagon just because it jumps to a five, right, they’re not gonna be wanting to enter the marketplace again but..
Melissa Langdale  This is what it is, right? Like, we can’t wave a magic wand tomorrow and say, Okay, well, we want 2 percent rates. Now let’s see what we can do to manipulate the market to get us back to that point, right? Like, there is this, there’s something to be said about kind of embracing the reality that’s in front of us today and helping consumers across the country, investors across the country even to be able to navigate the market that’s in front of us. And that’s where, you know, having the right kind of professionals around you can can help with that.
Craig Evans  So another question that I get a lot that I thought I’d ask and see what your thoughts are? What’s the biggest driving factor that you see? And maybe that you’re hearing from your lending cooperatives and things like that. But in buying homes, do you see? Let’s say if what you’re looking at the current rate is at home price or interest rate? That’s the biggest driving factor in that today, what your lenders are hearing back?
Melissa Langdale  I actually think it’s neither I think it’s monthly payment and payment.
Craig Evans  Okay.
Melissa Langdale  How much do I need out of my pocket? And how much? You know, how much is my monthly payment? Gotta be from a consumer perspective. I mean, those are the big drivers for them, “Can I afford this? Is this going to be comfortable for my family?” and affordability goes back down to monthly payment and how much cash is coming out of their pocket.
Craig Evans  Which is it’s interesting, because let’s just like you talked about, there’s a lot of things that are changing the supply side of that equation. That’s making it harder and harder to reach an affordability. I mean, just when you look at the energy market, you know, a lot of the things I talk about and try to teach people on, if you look at the amount of times that a two before that’s going to be put into that house is touched by diesel fuel, you know, to get it out of the woods to get it to the mines to get it to all the places it’s got to touch that to get then get it to your job site. And when the cost of where you know, the energy is that to get that you can’t get that for $1.80 anymore or $1.30 anymore. You got to pay a lot more for it, you know So one of the things I was looking at is, is, with inflation being what it is Americans relying more and more on credit card use. How concerned is are you? Are we doing an irreparable harm to the American’s ability to qualify for mortgages? Not? And it may be that we don’t even have a chance or a choice in it?
Melissa Langdale  But yeah, you know, I think there Yes, consumer credit card debt is at a really high level right now, normally, that says there’s stress in the economy right there. They’re leveraging credit cards for different things. I do kind of question whether that debt is real, or whether consumer behavior is driving that debt behavior and reporting is just kind of showcasing more of a change in consumer behavior. And people leveraging credit cards, even if they pay them off for like, you know, points and those airline miles and you know, all the things that go with it. So I don’t, you know, but I do feel it, I do hear it from a lot of lenders, I do see their reports on all of it, we are at an elevated rate than we have been in the past. So what does that mean? That means that consumers are a little bit more stressed. But they, if you think about what happens in the marketplace is as you start to think about like recession, right? Where the market and the economy are really, really struggling. Consumer behavior, like credit cards is one of the first things that you look at as like an index, a leading indicator into how it I don’t know, into movement, I guess, in that market.
Craig Evans  Right.
Melissa Langdale  So if consumers are stressed, what will they not pay first? Right? Well, they leverage the credit cards to not pay their car, you know, will or will they, but they oftentimes will still like the home is the last thing that they, you know, will hold on to and not have any, good news is and all of this, you know, homeownership is still at a really high rate. I think the last time I looked, we were like 60, 65, 66% of the US households actually own their own home. Equity is at an exorbitantly high level demand is high, right? So what happens if they get stressed, they just sell their home? They get an influx in cash, they get an equity line they get,? I mean, there’s there’s lots of solutions for consumers that they’ve not had in the past. So yes, it isn’t leading indicator. But I don’t know that it’s necessarily the same leading indicator that has been in the past for us.
Craig Evans  If you’re looking at of the lending industry as a whole, what do you see? What do you see is the biggest thing coming on the horizon for the future of lending in American homeownership?
Melissa Langdale  Oh, gosh, that’s a really hard question. So I know, we’re almost stuff at time, I don’t know that I can solve like all the world’s problems in the next few minutes.
Craig Evans  But tell me what you think one spot is.
Melissa Langdale  On the horizon would be? How do we rethink workflow design? How do we rethink customer experience? How do we, how do we take the kind of traditional mortgage process and create something that’s simpler and more transparent and easier for consumers to understand? And so like, from a future perspective, if I could wave my magic wand like that’s where I’d love to see improvements. But I think a lot of lenders are starting to think about that. I think a lot of technology solutions are starting to think about that as well. How do we create a better customer experience more transparent process, we create operational efficiencies, so mortgage companies can create that elasticity in their business model so that as market or, you know, as they have to react to market changes, their business has the ability to not necessarily to navigate that process easier, and not necessarily have to hire a bunch of folks to to fill those spaces as they see that kind of, you know, market driven growth opportunity.
Craig Evans  So, and I know we are running out of time, I want to if I can grab one more question with you real quick, I want to you actually mentioned a few times from a technology perspective. You know, technology has always had kind of a deflationary effect on the economy because, you know, you’re creating things and it’s great for the economy, and then all of a sudden, we’ll wait a minute, we just lost a certain amount of jobs out of that, right. So but we need technology, right? That’s the only way we can continue to improve and create the efficiencies. So I’m noticing I love the fact you know, I love finance. I was reading through your website, looking at your fund and a few different things that you guys have there. So do you think is emergence of tech and especially AI, right, especially AI in relation to the lending industry, what you get is or like you mentioned that earlier, AI is still kind of in an infancy. But what do you see on that? How does that help your members? How does it help them stay ahead? Or does it create a bigger challenge for them?
Melissa Langdale  Yeah. I think this is such a cool question. And I could literally talk on this all day, by the way, and I know we’re almost out of time. But…
Craig Evans  So we should do another segment just on this.
Melissa Langdale  We probably should, frankly, you know, artificial intelligence, which really is AI, right. The first what we would really consider AI platform was launched in like 1973. Yes, this is like a buzzword right now for our industry, because there’s lots of lenders, and people in the real estate community that are trying to figure out use cases for how we leverage that to evolve our companies and our customer experience. So yes, that’s a piece of it. But we use AI for a really long time thinking about how you take emails, right, you have that kind of that extra word that’s added on it’s, that is 100% AI. So I think yes, there are lots of lenders that are trying to figure out how do we leverage it, but also, how am I going to be regulated on this? What are the risks that my organization is going to see? Am I going to be held to disparate impact if I created a platform that really denied a borrower that shouldn’t have been denied? So I think lenders are trying to figure out all of those things. And so AI has a lot of questions around it. For those of you that don’t know, FHFA is leaning in really hard on this, they’re actually doing a velocity tech sprint that is generative AI driven. If you’re a lending professional or real estate professional and would like to be a part of change. That would be a great place there. They’re accepting applications, I think through the end of the month, if I’m not mistaken. So it’s a great place for people to get involved and make a difference. And they’re specifically focusing on Gen AI this year.
Craig Evans  Well, Melissa, I am I am. Again, I’m honored and I’m grateful that you took the time to spend with us and our listeners. I guess the last thing is, if we’ve got people from a lending space, things like that, that want to check out The Mortgage Collaborative, what what’s the best way for them to get in touch with you guys find you
Melissa Langdale  So they can always just shoot me an email MLangdale@MTGgroup.com orr check out our website or connect with me on LinkedIn. We’d love to chat with any anyone that would be interested in learning more about what we do to.
Craig Evans  To our listeners. That is going to be it Melissa, thank you again. I really appreciate your time and it was a pleasure meeting you and get to speak with you.
Melissa Langdale  Yeah, it was a pleasure meeting you as well. Thank you guys so much. Have a good one.
Craig Evans  You too. Bye bye.
Narrator  For more information on hard money loans, trust deed investing, and upcoming events with The Norris group. Check out thenorrisgroup.com. For more information on passive investing through the DBL Capital Real Estate Investment Fund, please visit dblapital.com.
Joey Romero  The Norris group originates and services loans in California and Florida under California DRE license 01219911. Florida mortgage lender license 1577 and NMLS license 1623669. For more information on hard money lending go to thenorrisgroup.com and click the hard money tab.