Mortgage Lenders Are Missing the Inventory Engine | Dana Georgiou on Private Lending

Speaker A: Ladies and gentlemen, welcome to a new episode of the Fintech Hunting podcast. We've got an amazing guest for you today. She's a thought leader, a top selling author, an AI and financial literacy advocate. She's a builder of the extraordinary. Please help me welcome back to the show Dana Giorgio, Chief revenue officer of Dunmore. Dana, welcome back.

Speaker B: It's so good to see you again. Thanks for having me back, Michael.

Speaker A: Oh, well, it is great to have you back. We had a chance to talk at the gathering a little bit. You now have a new endeavor and we'll jump into that in a few minutes. But you've seen the mortgage industry from a lot of angles. Sales ops, uh, marketing, partnerships, revenue leadership. Now private lending. What do you see happening right now that most people in the industry are still underestimating?

Speaker B: Um, I actually think people are really underestimating the value prop in private lending. Right. Uh, one of the reasons, reasons why I was at the gathering was to kind of start a conversation about hey, traditional lenders, uh, the inventory that your home buyers um, are looking for doesn't magically appear in the marketplace. Right. It starts on this side, um, of the lending spectrum. Right. Working with real estate investors, builders, developers who are invested in their communities. Right. And wanting to build affordable housing. Yes. They're also potentially creating legacy wells for themselves, but that's really where the housing inventory starts. Um, and so that's something I think that we're, we're not really talking about and, and definitely is being underestimated of where the value is for from a home m inventory perspective.

Speaker A: So let's dive into that a little bit deeper. Private lending used to really be viewed as kind of a niche. Now it's, it's becoming much more of an important part of that finance conversation. What do you think changed or what is in the process of changing right now?

Speaker B: Yeah, I mean this has definitely been a space of evolution, much like any sector in mortgage has been through the years. But this one has rapidly evolved. Right. Over the last dozen years this space has moved from what I would refer to as infancy stages into toddlering and quickly becoming a teenager or young adult. The institutional capital um, that is now available. A private lending perspective, the securitizations that are being done, um, from a short term RTL perspective, even rated securitizations. Right. This, this, this opportunity or this, this lending um, component is just dramatically change. It's not um, you know, the community friend and family fund or the high net worth, um, guy that's looking to put some money out, uh, to do some fix and flips for some local, uh, real estate investors like that that is dramatically changed. And then at the same time, you know, I meet investors all the time who are still using their own cash to do all of their deals. Right. And so there's, there's, there's weird, um, dichotomy that's happening in this space where it's growing up with the capital that's, you know, um, available to be deployed and still kind of the, the borrower and, and customer understanding of what really is available to them in the market.

Speaker A: Well, let's dive into that because I think one of the things that I'm always fascinated by is what do traditional mortgage professionals misunderstand most about private lending?

Speaker B: Um, they misunderstand that it's hard because it's something that they don't know. Right. Um, when, in, when reality, it actually is just another arrow for them to potentially expand the, uh, opportunity to say yes to a client base. Right. Um, the majority of the investment properties in traditional lending are done through agency. Right. Fannie or Freddie. But there's limitations there, there's limitations for the number of properties that can be owned. Um, there's limitations in doing it in an entity. Personal guarantees, not personal guarantees. Um, and so I think there's a lot of misnomers from a traditional mortgage perspective. Prior to joining Dunmore, I mean, one of the specialties I was doing in my consulting business was actually working with traditional lenders on either strategic partnerships with other private lenders, um, that would facilitate this product, or even building divisions for traditional lenders that understood that there was a real revenue opportunity here for them, but didn't understand the regulatory environment, or more appropriately, maybe the lack of, um, regulatory environment that freaks a lot of traditional lenders out. Um, and they're like, wait, wait, wait, what do you mean we don't use CDs? What do you mean we don't have to follow grid rules? Yeah, exactly. So, um, yeah, I think that there's a lot of, um, work to be done from really bridging the gap between what a traditional, uh, mortgage lender looks like and what private lending looks like and how there's real, true partnerships between the two of them that could be beneficial on all sides.

Speaker A: Private lending, we know speed matters, but speed without discipline can become very dangerous. How do the best lenders balance urgency, risk and quality? Quality.

Speaker B: Um, yeah, it's, it's a great question. And we're, and we're seeing this. You know, I talk about responsible lending a Lot, Um, which I, I kind of get looks, you know, being the revenue officer. I'm supposed to be sales. Sales. Sales, right. And I am sales. Um, but I'm sales for, you know, for good borrowers to do good loans that are going to perform. Right. Um, a, a, a good private lender is not in this business as is a traditional mortgage, to take back properties. Right. We don't want to be real estate holders. Right. We want to deploy capital and be lenders. Um, so we're definitely seeing more of a focus across the industry in conversations about responsible lending and credit discipline. Um, you know, I am seeing more and more lenders put what I would call standard practices in place. Policies and procedures like things that we've just taken for granted as the norm in traditional mortgage. That just hasn't been here. Right. And so now with the, with the new institutional capital coming in, you have to really have those types of disciplines in place if you want to have, you know, an opportunity to work with a big capital partner.

Speaker A: What are some of the biggest opportunities in private lending right now?

Speaker B: Um, ground up construction, multifamily, uh, ground up construction. There is uh, there's a definite need for capital with both of those. Right. The, the fix and flips are great and we love them here at Dunmore. But it is as difficult as ever for flippers to find, you know, distressed properties or off market properties that then they can rehab and turn and sell at uh, you know, a profit margin that makes sense for them to be able to do that. So many of them gone to, you know, a more ground up or a tear down rebuild model because they can find um, a lot and, and do a new build on it, not maybe turn it as quickly as they would on their light or heavy rehab. But the value prop that's there or the economics are there can outweigh, you know, one ground up construction can mean an ROI of two or potentially three flips.

Speaker A: Interesting. Okay, so now let's shift a little, talk a little more tech. Let's talk AI. You and I know it's everywhere, but as mortgage companies are still treating it, many are still treating it like a tool instead of a business shift.

Speaker B: Yeah.

Speaker A: Where do you think AI is actually creating leverage in lending? Not just private lending, but lending across the board. Where is it having an impact and where is it still just a lot of talk and buzzwords.

Speaker B: Yeah, I mean I think it's still a lot of talk in buzzwords in most lenders minds, um, that aren't really strategically thinking um, about the impact to their business. Right. And I know that sounds strange, right, because we would think that all lenders are thinking about ways to impact, to streamline our businesses, to create, you know, efficiencies, cost savings, um, scale without potentially adding headcount. How do we reposition our current headcount in more effective ways or upskill those guys as we bring in AI resources? And, um, I love that you framed it as using it as a tool as opposed to really having this as an embedded component of a strategy throughout a company. Because there's a couple of different mindsets. I think when a lender is considering this is you can do it in use cases. And I think that that works for some lenders. Right. You identify a very specific challenge that you're having and you, um, an AI tool or case study in that to solve for that. Um, and it'll work and it'll be effective. Um, but it'll only be that one discipline in that one area. Right. And so, um, will it potentially impact, you know, the whole ecosystem? Well, probably not, unless the leader of that one case study is advocating it, you know, throughout the organization. Um, so for me, you know, from a strategy perspective and how we're going about it here at Dunmore is actually from both sides of it, we've identified very strategic use cases where we know that we need to scale our business. But from a current revenue and growth perspective, adding human capital doesn't make sense for us right now. Right. And so how can we create, um, efficiencies or use agents as a sales opportunity, um, or even more appropriately, using AI agents as a retention opportunity? I think that there's, you know, some real misses in understanding what those types of case studies can really bring in. And then overall, we're just looking at our business as a whole. And, you know, asking the right question is first, how does anything we do impact our customers? Because if that's not the first question, I just think we're doing it wrong. Right. Um, but if that question is, um, okay, it's, it's positive, then, you know, is the. Is the AI resource that we're potentially considering still the right answer for that, or is it some bifurcated solution? So I think that you have to strategically look at it, um, all the way through your organization and then potentially in individual segmentation and deployment.

Speaker A: In that regard, what should AI never replace in private lending?

Speaker B: Um, it should never replace the ultimate, um, decision of a loan. Right. A human has to be in the loop and on the loop, um, from a credit decision. Right. Especially in private lending because it's, it is nuanced. We don't, we're not an AUS driven underwriting type of um, opportunity. Right. Um, from a traditional lending perspective, you know, Fannie, Freddie, you know, Gus, Aus, all of that goes in and it just spits out these wonderful findings. We don't have that. And the reason we don't have that is because every deal is based on its own individual merits. Right. The experience of the borrower, the asset. Right. The collateral itself, um, some weighting in FICO score, but not as much as you would think. And so if you're thinking about the two elements being someone's experience and track record. Right. Um, and then the property itself, well guess what? Those are different on every single borrower profile. So I think if you don't have a human deeply embedded in that ultimate decision, you'll miss. Can AI help in the review? Sure. Can it analyze information on title reports and appraisals and bank statements and all of those things to give the underwriter, you know, a more holistic viewpoint? Absolutely. Should it ever be decisioned that way? No, I think a human has to be involved.

Speaker A: You bring up so many excellent points and I think for our listeners, really getting a great education on private lending and some of the nuances there. If you're advising a private lender who feels overwhelmed with AI and there's market pressure and margin compression, what would you tell them to attack first? What should they fix first?

Speaker B: Um, well, what they should fix first is what's causing the biggest challenge in their organization. That could be costs, it could be efficiencies, it could be growth. Um, you know, for, for you know, me at Dunmore, you know I'm, I have revenue in my title. Right. And so obviously you know, the growth and grabbing revenue in, but it's also, you know, revenue from protecting the revenue we bring into the organization as well. Um, so I think it's different in every lending shop. Um, you know, we've deployed um, solutions um, very strategically from case study things that we felt pain in. Right. Um, we were spending a lot of time in um, questions and answers within our guidelines, especially as we're bringing on new originators. Right. Some human was having to answer all of these questions on policies and procedures and on guidelines. Right. The bandwidth that it takes to be able to do that appropriately and accurately is a lot of resources. So deploying ah, an AI solution um, in that regard is a game changer. Um, the other place that we're deploying it is strictly in a sales Play for all of our incoming leads, uh, will now be answered by an AI agent, which I'm really excited about the deployment of that. The AI agent can do a handoff to any one of our originators at any time. They can set appointments, but they also can answer any questions from our customers. Customers coming in. Right. They're, they're very well trained, much like I would train, um, any business development rep about who we are at Dunmore and what it is that we do. So for us those are two ways that we're currently deploying it. But we're looking at every aspect of our business from a growth perspective, um, of how AI can appropriately, um, be in responsible lending.

Speaker A: Well, and I think that's key. And I know you always really hammer that home of it's got to be responsible. Talk to me, I'll kind of give you the floor. For those that don't know Dunmore and some of the cool things that you're doing in private lending, tell us a little bit more about your organization for

Speaker B: such a great story. Um, and sometimes I refer to us as an older startup because, um, we're still in that uh, phase of excitement and pivot. Um, and we can do those types of things quickly. Like we can try something and oh, that didn't work or oh, that did work great, let's build it out even more. Oh, it didn't work. Cool, let's pivot. So, um, being in that type of position, um, is really fantastic. We've got phenomenal capital behind us. But the Dunmore story really started with Frank Roumie, who is our chief, um, executive officer. He was one of the original co founders of Genesis, um, who's OG in private lending. Right. You know, decades and decades, uh, worth of experience. Um, and Frank really wanted to um, you know, create a new private lending firm much like what the original Genesis was, um, because he feels really passionately about uh, real estate investing and the borrowers that we serve. So we started as a broker shop about five years ago and two years ago we um, attracted our um, our capital partner with Apollo. Um, we're continuing to expand the capital that we're offering to our borrowers. We've expanded our products. Um, we do everything from the single family one to four fix and flip to ground up construction multifamily to DSCR loans. So we offer a really wide range of products. Where I think Dunmore, um, really shines in our industry is um, we're a jet boat, uh, operation, um, so lean and slick and fast, um, with Titanic capital behind us.

Speaker A: Love it.

Speaker B: So it definitely gives us a leg up, uh, on some of our competitors.

Speaker A: You are a wealth of knowledge and expertise. I greatly appreciate you taking time. If people want to find out more about, uh, Dunmore and get a hold of you, what's the best way they can do that?

Speaker B: They can go to ww.dunmore.com all of our programs are on there. Our leadership, who we are and what we're about is probably the fastest way. We built out a really fantastic portal for our brokers and borrowers that they can even get a loan priced right on our portal. Um, so that would be the place. And you know, Michael, you know, I spend a lot of time on LinkedIn. Anyone can always, always find me on LinkedIn. And I love to engage, uh, with people about private lending.

Speaker A: If you guys aren't connected with Dana, you need to be go out there, get connected with Dana. I can't thank you enough for being a guest on this episode of the Fintech Hunting Podcast.

Speaker B: Always my pleasure, Michael. Thanks. Great to see you.