Opinion

California Dreaming

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WE’RE HEARING… this week I write my blog from the 7th hotel that I have inhabited over the past two weeks. You see, I bundled a whole bunch of California visits into a long two-week trip to the fine People’s Republic of California. It seemed like a good idea at the time.

On a positive note, I have visited with several clients who are working hard to figure out how to continue to grow their businesses in the future. And, of course, it being California, I also have some interesting stories and perspectives on how the fine folks on the left coast live, and how they keep coming up with innovative business models to address their ever changing market. Much of what I learned was NOT about the mortgage business, but may have some application to our industry as well.  

First off, let me tell you about how the folks in California find a cab. Unlike New York, they don’t stand on the curb and look in a threatening manner at passing cars while pointing at them. No, out here they use a service called UBUR that was launched in San Francisco in 2010. It is not available where I live in South Florida. In South Florida cabs are always yellow, always late, and always junky old cars with drivers with extremely limited linguistic capabilities.

In any case, in the SF area, you download an app called UBUR which knows where you are (by GPS) and lets you see where the nearest black sedan is. You can order a ride by clicking on the icon and as the actual car gets closer to you, a picture of the driver appears. It alerts you when the car is out front so you can dash out and jump in.

And being in NoCal, you can also order a hybrid and do your part by reducing your carbon footprint as you enjoy the ride (of course, I could have walked the 10 blocks, but let’s not get crazy here). 

The service works directly with your credit card and no cash is needed—no tip, no cash—you just walk away. Apparently, the driver gets 80% of the fare, and the ones I talked to all think it’s great. 

Now, what the heck does this have to do with mortgage? Well, imagine having an app that you click a few data points into, it tells you who is willing to fund the loan and how much it would cost, and you immediately order the loan with automated status updates coming back to you throughout the process. I know it seems far off, but as more and more consumers get used to the uber-like experience, shouldn’t we as an industry work toward this? 

Now, here is another totally different way of getting around in NoCal which illustrates the law of unintended consequences. You see, to use the high occupancy vehicle (HOV) lanes to drive from Oakland to San Fran, you need to have three in the car. Since commuters don’t typically travel in threes, a new model of ride-sharing has emerged called “casual carpooling.” 

I admit, when I first heard the term I had images of naked passengers (nudism is casual, isn’t it?) or perhaps it was carpooling only with those that are dressed casually for work. But SF is pretty casual anyhow, so that seemed pretty unlikely.

Actually, casual carpooling is an arrangement where drivers with cars pick up total strangers so they can take advantage of the HOV lanes and get to work faster. The strangers congregate at a certain spot, and the drivers show up and fetch them. Now, here is the oddity of this. There is a specific set of rules and one of them is that you CAN’T talk to the driver unless the driver talks to you. Strangers are expected to climb into the cars and sit there passively until they reach their final destination.

If UBUR is automated riding, then casual carpooling is monotonous riding. There is value to it, people do get where they’re going, but they have no control of the process, no voice at all in the experience and are at the complete mercy of whomever happens to be driving the car they choose to jump into—a person they know nothing about until they have committed to the deal. Sounds a little like the process we employ in the mortgage business. Maybe, we’re traveling in the wrong car.

Garth Graham is a partner with Stratmor Group, and has over 25 years of mortgage experience, from Fortune 500 companies to startups, including management of two of the most successful mortgage e-commerce platforms. He was formerly with Chase Manhattan Mortgage and ABN Amro, where he was a senior executive during the sale of its mortgage group to Citigroup.

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