Mortgage Matters

Wesley Knight 0:00
This is a Kun V studios original program. The content of this program does not reflect the views or opinions of 91.5 jazz and more the University of Nevada, Las Vegas, or the Board of Regents of the Nevada System of Higher Education.

Roland Daniels 0:43
Good morning Las Vegas. Welcome to mortgage matters. I'm your host, Roland Daniels, a certified mortgage advisor with Geneva financial. My NMLS number is 355859, company. NMLS number is 42056, and of course, I'm here this morning with my fantastic co host. Heidi Griffith, good morning. Heidi, well, hey, good morning. Happy Sunday. Roland, how are you happy Sunday? I am doing awesome. That is awesome.

Heidi Griffith 1:11
I am. Heidi Griffith, I'm also a mortgage advisor and your Director of Client Services. My NMLS number is 2247754, thanks for spending your Sunday morning with us. It's bright and early. It is. If you have any thoughts or questions during today's show, we'd love to hear from you, feel free to call or text us. We're at 702-210-2057, again, that number is 702-210-2057, and you can also connect with us on our Facebook page at mortgage matters radio, that's our new Facebook, is it? Yeah, yeah, it's pretty good, right? We've got some fun stuff on there. Yes.

Roland Daniels 1:47
So we are so excited to have a very special guest with us today. It is Aaron van Trojan, our CEO and founder of Geneva financial, aka boss man, yes. Aaron started Geneva back in 2007 with the vision to shake up the mortgage industry and put people first, and that's exactly what he's done. So under his leadership, Geneva has grown into a nationally recognized lender, winning titles like best mortgage company to work for, and number one mortgage lender by Ranking Arizona. But before the awards, what really sets Geneva apart is the culture and Aaron has built one that's rooted in kindness, integrity and service. So at the heart of all of it, Geneva's core value be a good human, that's right. And that is exactly why we are here today, and it's why we chose Geneva, and it's why we love what we get to do, because at the end of the day, you can't be a good human and mistreat people, period. That's

Heidi Griffith 3:00
right, that's right. And because to roll into me, it's really not just about mortgages, it's about how you treat people, how you show up for your community, and how you do business the right way, right? 100% so the good human initiative isn't just a tagline. It really is what we believe in. It really is Geneva's culture. It's about respect, leading with your heart, and making a real impact, and that's something that it really speaks to us on a personal level. And that's why, when we were out looking for mortgage companies to go to work for, we chose Geneva, right? So Aaron, we're so excited to have you here today. There's a lot happening right now. Right? Market's kind of strange. CFPB, HUD, shift housing. What do you think? Well,

Aaron Antrojen 3:39
thank you for having me. And yes, there's certainly a lot of things that are happening in the mortgage industry, in the real estate market in general. Not that it's been boring the last few years, to say the least, there's been a lot of movements with the new administration. It's certainly put things on its head a little bit, and sweeping changes happening at a very rapid pace, yeah,

Heidi Griffith 4:04
almost hourly. So last week, on last week's show, we really started to talk about the changes, the potential dismantling of the CFPB. Talked about how HUD played the role prior to the CFPB, and then why the CFPB kind of came about after the crash. So we know that that that happened in 2010 right? What exactly I mean, you know you, I know that you have your finger on the pulse, especially when it comes to the world as the owner of a mortgage company, right? So the CFPB would instantaneously, when it came into effect, affect you, right? The

Aaron Antrojen 4:39
CFPB. I mean, the cftb is a creation of financial global financial collapse that was really created by the US mortgage market that affected the world's economy, and it was a mortgage industry that was run. And mostly unchecked, mostly unregulated, regulated, but mostly, you know what regulations that were in place? You know, prior to the global meltdown was they weren't being enforced. There was no police. There's nobody policing. The mortgage industry, and when you you print money for, you know, eight years for free, and there's free money going around, and people get really creative on, you know, mortgage products they can offer to people that probably shouldn't have a mortgage or a house, it can lead to a problem, which is exactly what it did. And so the and again, we're talking about a global financial crisis that anybody that was born alive during those times experienced it, you know, especially in states like Nevada and Arizona and Florida. But it happens throughout the entire the world, right? And when, when you, when you go into a Great Depression or Great Recession bordered on great, you know, depression, people not only lose houses, they lose lives, jobs. And so the impact was, was, was huge, not just monetary. And the CFPB was the reaction to that. They created. It essentially police agency to regulate, or mostly to enforce, treat new laws and enforce laws on the mortgage industry and other financial institutions that you know led to that class,

Heidi Griffith 6:32
yeah, like things right, happening again, right, right? And it's,

Aaron Antrojen 6:36
it's not perfect, especially when it's an easy knee jerk reaction to something so catastrophic, and so it was overreaching, and it wasn't perfect, and it was problematic, and they made mistakes along the way. And so when you're in the mortgage industry, you don't really enjoy that, but it was necessary. And I do. I am a contrarian, because most people in our industry don't want to see FPD. I, on the other hand, believe that it's necessary to prevent another financial collapse. So when

Heidi Griffith 7:05
you say that most people, on the other end, don't want it, what would be their reasoning for that? Just so that people kind of understand the magnitude of this, well,

Aaron Antrojen 7:13
who wants rules? Right? Right? Who wants rules? I mean, we all know at some levels that we need rules and laws in place in society to have a function in society, but you really don't you know the most people that are good people in general still don't want rules. They don't want regulations. They don't want to have to abide by certain laws. And most of us don't need laws to prevent us from doing bad things, because we're just good people in general. But the mortgage industry, in the banking industry, and the finance industry, in and of itself, is capitalistic, and capitalistic cares about capitalism cares about money, right? It's about making money, and it does not care about people. Cares about money. That's its sole purpose. And so you need to regulate capitalism. I'm a capitalist. I'm I believe in capitalism, but it needs to be contained. It needs to be regulated, or things go astray, things come off rails. And in the mortgage industry, when we experience probably the heaviest regulation out of almost any industry on the planet post the collapse, it was tough. It was hard on it, and then it drives that cost because we need to hire lawyers and and there's a lot of compliance costs that go into effect make sure that you're abiding by these laws. And so it's a burden. It's a burden on business. I experience it as a burden on business, but it's a necessary evil to prevent another collapse.

Roland Daniels 8:41
So Aaron with the consumer protection finance Bureau being rolled back. Who's going to fill the gap? Well,

Aaron Antrojen 8:50
I mean, again, this thing, this thing is there's been four temporary directors put in place since the administration took office. That wasn't very long ago. Okay? The first, the first temporary director came in and basically stated, cease all operations. Stop working. So that's not a good sign. I mean, it's literally what they said, No more enforcement of laws, no creating of new laws, and again, some of this. Okay, listen, it's not a perfect institution, and it's not a perfect governing body. But instead of shuttering it, you should go in there, and basically, let's, let's see what's working. Let's see what's not working, and reach will. Let's make it better, because by the by no means is a CFPB, for that matter, probably any government agency, or, for that matter, any business perfectly run, of course, right if you dig in there with a fine tooth comb, you're going to find issues, and that's what they should have been doing. But what they've been shuttered it they basically said, No more, no more anything. So right now it's we're being on police. We can run wild, and I'm sure mortgage companies already. Are for lack of fear of recourse for violating these laws that were mostly put in place to protect the consumer and these consumer,

Heidi Griffith 10:11
right? Yeah, this is stuff. I mean, when we talk about it, you know, not everybody kind of understands what the CFPB and what its main function was. But, I mean, we're talking about stuff like predatory lending, we're talking about stuff like redlining. We're talking we're talking discrimination. There's a lot of stuff that fits into that, right and without any for lack of a better term, policing and without any plans. I mean, right now I know that consumer complaints, so if you had a problem with your mortgage company or your servicer or even your bank, this is normally where you would go to file a complaint, and that's those complaints are being accepted. They're just not being investigated.

Aaron Antrojen 10:51
Correct? And again, just today, they announced the administration announced the CFP. CFPB will continue to exist. Well, the President does not have the power to shut them down, so the president can't, technically dissolve the CFPB. I think that takes an act of Congress, but they can shutter it, which is exactly what they did. And they got as far as the website's down, right down, and I was told, just recently, ago, I haven't verified it, that they're taking the CFPB name off of the building.

Heidi Griffith 11:23
Yeah, I actually looked into it, too, and it does appear that the name is gone. So that

Aaron Antrojen 11:28
doesn't lead me to believe that the administration has any interest in retooling, making it better, and putting them back to work. And I could be wrong, right? I could be wrong, but most of the top officials of the CFPB have already resigned. Was this matter because they're not doing any work anyway. So, and I made a statement when this first happened, that I believe that the next financial crash has been put in motion. And there's people on the other side of this argument that say, Hey, listen, Aaron, there's a lot of regulatory agencies that were around, and still are today, but they were around before the CFPB, and they can just step in and do what the CFPB did. And my argument is, well, they didn't, that's right, they didn't before, which is why we had the collapse, and why we created an agency that could actually do what the other regulatory agency didn't. And again, with what the current administration is doing is getting the funding of most of these government departments. If the other regulatory agencies were to step in, which they probably could, they would need a massive amount of funding, not defunding. They would need additional funding to be a step in what the CFPB does. You got to understand, there's 4000 mortgage banks. God only knows how many mortgage brokers there are, plus the financial institutions that they also oversee. And, you know, it takes somebody fairly high intelligence and understanding to understand the ins and outs of the rules and regulations and the things that I mean, just a mortgage is a very complex instrument. If anybody had any ideas just what goes into a mortgage, it is immense thing, right? It is the living organism that that that morphs as it as it matures, and it takes bright people to be able to regulate that, to even find out if a company's in violation of these laws that are meant to protect the public. So again, it's a personal opinion. I don't see that happening, right? I don't think that's going to happen, and I could be wrong, but there's zero signs that that's their intense and every sign to just shutter them.

Roland Daniels 13:32
So as the owner of the company, what would you like to see when it comes to the CFPB or maybe a different ruling body?

Aaron Antrojen 13:41
I mean, in a perfect world, like I said, I wish that you took some really smart people and some from the mortgage industry. And BB, you know how to sit down and say, Hey, this is not this doesn't make sense, and this is actually causing consumer harms and fees and time so on and so forth, because you've overreached and you understand the consequence of what you did right, because it mostly doesn't work, and then the rules and regulations that you did form to actually protect consumers enforce them, because in the mortgage industry, they haven't largely enforced the rules that they did put in place. Most of the mortgage companies that I know of, with almost zero exceptions, haven't been abiding by the rules anyway, right,

Heidi Griffith 14:24
right? And that's where, sorry, Aaron, isn't there, where a lot of the, you know, the community lending and that kind of stuff, they get these fines and slaps on their wrist and go about business, yeah.

Aaron Antrojen 14:36
I mean, a lot of the times. I mean, this was the way that the one thing that's scary about the CFPB is they do have teeth if they want to use them, and they can do astronomical harm to a company, even if the company didn't intentionally do anything wrong. So, and that's one of the problems with the current situation, or I shouldn't say, the current but the initial. Creation of the cftb is the power that they had, and they could actually and because some of these rules are so complex and sometimes they're not very clear, you could be doing everything you could to be potentially, you know, trying to protect the consumer, doing everything right, trying to abide by the rules and still have a misstep, and they can shut you down, that that that's too much power, right? Those kinds of things need to go by the wayside, or get resolved, get more clarity, and so on and so forth. That's that's too much power. But again, that's very rarely, has been very rarely a problem over the course of its history, and again, a lot of the times, is that the people will the big mortgage institutions, the big financial institutions would sometimes just intentionally violate the laws because of the increase of income that it can make, but not being burdened by following the law, right? And they just pay to play. Okay, you're gonna, I'm gonna make, I'm gonna make 10s of millions, and you're gonna find me a few 100,000 right? Why not just who cares about your rules?

Heidi Griffith 16:08
Right? Ask for forgiveness. Later,

Aaron Antrojen 16:12
exactly. And again, unfortunately, there's been a lot of that going on since the CFP inception, so it did need rules retooling. It certainly doesn't need to go away. Probably needs more oversight. It probably needs more funding, not less, right, if you really want consumer protection. But it's a massive it's a massive thing, and it's not as simple as what people think, you know, just about, you know, limiting credit card fees. Yes, that's super, super important, right?

Heidi Griffith 16:47
And that was one of the things that they'd done, is those overdraft fees, right? Yeah. I

Aaron Antrojen 16:53
mean, do you think you'd be fine? I mean, if you did overdraft, I mean, it's still consumers gotta, you gotta take responsibility. Let's say if you win negative $5 in your bank account, should we be able to hit you with a $500

Heidi Griffith 17:04
fee? Right? Right? Probably excessive.

Aaron Antrojen 17:07
And the CFPB, you know, prevents that from happening. It's just

Heidi Griffith 17:13
like the medical collections being reported on credit reports, right?

Aaron Antrojen 17:18
Yeah, and you know, again, that there's a lot of I can I can argue those things both ways, because, you know, that's an entirely different conversation about the healthcare system and the problems that you know can cripple people financially, right, which needs to be resolved. But I mean, again, if somebody has bills that they don't pay, I'm a little bit on the fence. But medical bills, again, that turns into a slippery slope. Talking about dysfunctional health care system,

Heidi Griffith 17:47
right? True. And

Roland Daniels 17:48
when it comes to, what about HUD and fair lending enforcement, because we all know that has it, HUD is facing a massive staffing cut, up to, I think we're 1000 right? 4000 jobs, 700 Yeah, so including positions with fair housing, rental assistance and disaster recovery. What does that look like from your point of view when it comes to hood? Well,

Aaron Antrojen 18:12
listen, any government agency, I hate waste, and everybody always, regardless of what size of the fence you're on, probably assumes that there's a lot of government waste, right? And we always have. This is nothing new. This has been going on for decades, probably long before I was even born, and there probably is a lot of government waste. And like I said, in a lot of large corporations, there's a lot of corporate waste, so, and there might be more so on the government side than there is private. I have no idea. I would assume that, but I don't know if I've just been told that all my life, and believe it, or if it's actually true. So when you come in and say, Hey, listen, it's just like, I'll use the FAA for an example. The FAA is working with antiquated technology. No question, not arguable. I'm a pilot myself, not by trade, but I fly planes. And so I know that there's the technology is antiquated, but I also know that they're underfunded, they don't have enough people, they're understaffed, right? They're overwhelmed. And you can't come into an FAA and say, Hey, we're orders going to cut 50% of your workforce, and then we're going to try to make you better, right? It doesn't work that way. You come in and say, Okay, we understand. We have all these problems. You need to get more, you know, advanced in your technology. You got to get more up to speed, which is going to cost billions of dollars. And until we put that financial investment into the FAA, we're gonna have to hire a lot of people because you're understaffed until the technology can again reduce those jobs, because technology will do that inevitably with every industry. Yes, you can't just come in with a chainsaw. By 50% think that there's no repercussions from that so, and that's exactly what they're doing with HUD, right? And FHA USDA is not just your beef, but they do housing too, which might surprise a lot of people, and they're coming in with a chainsaw and expecting that if you cut, you know 40% of the workforce that it's gonna function. Yeah,

Heidi Griffith 20:16
it's frightening to me. To me, it's troubling.

Aaron Antrojen 20:21
You save this ton of money,

Roland Daniels 20:23
but at what cost, right? Aren't they overdoing it, though, by reducing the amount of staff? Because we're hearing numbers like 77% of all of the staff will be eliminated.

Aaron Antrojen 20:33
I would say that if they actually do that in a very short period of time, that the mortgage industry, which is, again, just speaking from my point of view, because I'm in the mortgage industry, and HUD is hugely important. They they participate in, you know, 45 50% of the business that we do on a monthly basis that will get disrupted,

Heidi Griffith 20:55
yeah, and that's what we're saying. I mean, it's kind of scary out there, and with the fear of the unknown, and who knows what it's going to be replaced with, or if, right? And again, the HUD was, was that body that was supposed to be protecting people prior to the CFPB, right?

Aaron Antrojen 21:14
Right? And I used the analogy the other time, the other day with my company. I'm like, Listen, if I wanted to cut expenses with my company, and I said, I want to cut expenses. I think there's some waste in here, so tomorrow I'm going to fire half my staff, but I don't expect anything to change. I just expect expenses to go down, and I might get rid of the waste. If there was waste, I'm going to get rid of the two, right and but the company's still going to work just fine. That's an absurd notion.

Roland Daniels 21:42
So do you think state regulators will step in place? The federal government? They

Aaron Antrojen 21:48
will okay again, once again. This is these things can change on a dime, of course, especially today, of course. But if the CSTB is shuttered and doesn't get operational again, which I don't believe it will, at least with not enough funding to do anything. So who cares? The states will, and some states are going to be a little bit more concerned about consumer protection than others. That is correct, right now, states are do regulate, they don't regulate federal law, right? They reach, they regulate state issues, not federal issues, like fair lending, the you can't discriminate because of of race, religion, blah, blah, blah, that's a federal issue that's policed by the CFPB. That is correct. So the states could say, Okay, we know that there's not a police agency now that's regulating these laws that are really important to us. So we're going to make up our own laws and we're going to enforce them. That's fine, and they will do exactly that, if that means, I mean, we're licensed in 49 states, there's going to be 49 different sets of rules.

Roland Daniels 22:59
That is correct. That's a lot of rules to keep up with,

Aaron Antrojen 23:03
which means my compliance department is going to triple in size, maybe quadruple in size, to be able to manage 49 different states and different ways of regulating these laws. The disclosures will be 49 different sets of disclosures based on the state. And so just efficiencies go right out the window.

Heidi Griffith 23:22
Yeah, just so listeners understand. So when you purchase a home and you're getting your mortgage, you're issued a series of disclosures. Those disclosures right now are streamlined. If things were to go this way and you lived in a specific state, you might see different things. If you had a house in Arizona and you had a house in Vegas, they could look completely different, couldn't they?

Aaron Antrojen 23:43
Yeah, even today, they do, but it's usually a handful of pages. I mean, this closer package on a regular loan is what 100 pages say, right? It's probably more than that, but it's still a lot of pages, a lot, and most of that's federal. And then there might be a few pages that individual state specific things, but it's only a couple pages, and it's fairly easy to manage. But if the federal goes out the door the states that each state might have their own 100 pages, and again, not the end of the world. But this drives up consumer costs. There's no mortgage company, no no financial institution is going to say, Okay, I just needed to hire. I just need to increase my staffing by 20% to handle all the different state laws, and

Heidi Griffith 24:27
we're just going to eat that. Can't absorb everything,

Aaron Antrojen 24:31
but they don't absorb anything, right? They roll that cost right to the consumer.

Heidi Griffith 24:35
Always, always, always, yep. So it's a lot of so it's a lot of stuff to look out for. Unfortunately, we're right at that very Hang on, Aaron. We're very we're right at that 30 minute mark. Hopefully we can pick this conversation back up next week, because there's lots more I want to talk about Fannie and Freddie. I want to. Talk about privatization. I wanna there's a lot of stuff I wanna hear from

Roland Daniels 25:03
you. So a huge thank you to our fearless leader, Aaron van Trojan, for sharing your valuable insights with us. There's so much happening in the Mortgage and Housing world right now, and clearly we've only just scratched the surface. We always appreciate your time and expertise. Aaron, we'd love to have you back on air with us anytime.

Heidi Griffith 25:27
Yeah, absolutely, absolutely. And so if you have any thoughts or questions about today's show, we would really love to hear from you. You're welcome to call our text us. We're at 702-210-2057, again, that number is 702-210-2057. Or you can always connect with us on our Facebook page at mortgage matters radio, we appreciate you tuning in with us this morning. We'll be back next Sunday at 7:30am right here on K, U, N, V, 91.5,

Roland Daniels 25:56
until next time, remember, stay true to yourself and your mind, bye. You.