Nathan Knottingham on how serving veterans has changed

(upbeat music) When appraisals slow down your closings, class valuation speeds them up. Class valuation delivers fast, expert reviewed appraisals with a dedicated contact managing every order. Service and speed when you need it most. Get started at classvaluation.com. (upbeat music) - Welcome everyone. My guest today is Nathan Nottingham, the CEO of MLO Force, COO of VETA VA and a loan officer with Realfa Mortgage to talk about the intersection of mortgage and real estate and how serving veterans has changed. First, I wanna say thank you to our sponsor, trust and will for making this episode possible. Nathan, welcome to the podcast. - Thank you, Sarah. It's nice to be here. - It's great to have you here. So we are doing this in person at the AimFuse event here in Nashville, really fun event. And so glad I got to catch up with you because you are busy doing a lot of things. - Just a few, I try, try to do a few things really, really well. - So, okay, so obviously you are, you know, VETA VA. Maybe that's what people know you most for, but also MLO Force, which is an amazing education company. How do you describe MLO Force? - I've been trying to describe it more as the pit crew to compliance and CE training. Like we just like to try to make it fun and fast and efficient. And so that the loan officers can come in, get their continuing education, get their compliance training and get back on the track and do what they do best. - Really cool, and congratulations because you received the vendor of the year award, correct? - Yes, absolutely, the Hall of Aim 2025 from Aim. Really, and it means a lot because it's nothing you apply for. The community nominates you, the community votes for it. And I had no idea until I got the recognition like, hey, you won, so make sure you show up to the event. So that was really cool. - That's very cool. You know, one of the things I wanted to interview you about, Rialpha acquired Be My Neighbor about a year ago. - Yes. - You were an executive founder of Be My Neighbor. And I know that you're not, you know, with Rialpha at this point, like you're busy doing your other stuff, but I do think that acquisition made me think like, I think you probably have a different perspective into the intersection of real estate and mortgage, which is something I'm always super interested in. So I guess what I would ask you right now, because we've gone through so many changes recently, what do you think that the average loan originator maybe doesn't understand about the real estate partners or that business? - Man, that is one I've been learning a lot about myself. And so I still am a loan officer, kind of like a past founder, which has been fun. They leave, they, I'm still involved. I'm just not the executive leadership level now by design and it's wonderful. It's really cool. We've put better leaders in, like Jamie Cavanaugh is our CEO of Rialpha Mortgage now. She just is an amazing leader. Rocky Ballour is doing a great job. And so one of the things we're finding too, directly to your question, I just want to give a shout out because they're great people, but it's your question. The real estate and mortgage markets, especially the verticalization that we're seeing happen across the marketplace, nothing has truly changed the human to human capacity of relationship building, in my opinion. It is real estate agents by and far, don't really understand what a loan officer does. And loan officers by far, don't really understand what a real estate agent does. And the more we spend time with each other, trying to figure out how are you serving your people? Here's how the age old identity of, get to know your referral partner, get to know these people, be friends with them. Like I have a number of agents that I'm really good friends with and I've gotten to know their business model. Like you understand how they work and they've gotten to know me. And they understand how many hours I put into it too. I may not be driving the client around to go see houses and open doors, but I'm spending time on weekends and nights, calculating income and documents and just on the phone regularly. The fear is that verticalization and bringing all things under one roof, especially as Rialpha is doing and consistently and continuing to do as we've seen with Zillow, as we've seen with Rocket and Redfin, as we're seeing across the industry, is that maybe real estate agents and maybe loan officers don't really need to exist as much anymore. And I don't think that's going to be a case. I'm seeing AI tools. We've talked about this a little bit. Y'all are covering a lot on AI, on what's happening out there. The AI tools are wonderful, helping borrowers get started or even move through the process more efficiently, but they still need the human, they still need the contact of supporting them, answering questions, boots on the ground kind of mentality. Like, hey, this is great. I read what this says about the location, but really, how does the house smell? What does the smell of the neighborhood? Am I near a plant that I don't want to be near? Like, there are so many things that an AI tool can't tell you, even if it's graded it, quote, unquote. And the same with the loan officer. It's like, hey, here's my all my income and all my assets. And the loan officer is actually able to look at the gray. We're having this discussion with the VA Underwriter recently. The VA Underwriting has 26-Dash Dev as a handbook. They basically say, here's all black and white. And in that handbook, multiple times, it says to the best discretion or to the discretion of the Underwriter, to the benefit of the veteran. Like, those of the quote asks my own verbatim, if you will. What it's meant to do is give gray decision-making powers to the professional to help that human. And AI bots are gonna help a lot. Integrating our services singularly are gonna help save money. They're gonna help, they should help reduce costs overall. But in no way do I think they actually remove the importance of these roles in this industry. (upbeat music) - We all know that one client, the one who ghosts you after closings. Closings used to mean relationships. Now they mean radio silence. Here's the fix, give them a private home search and an intelligent home equity tracker. Home values, custom listings, curated automatically while you build your referral network with agents nationwide. Know exactly when to reach out. Refile windows, equity milestones, all of it. That's HomeBot, one close, endless comebacks. Visit homebot.ai. (upbeat music) - I think that's a really interesting point about like, there's the discretion for the loan officer. And that's within VA, that's within one program. What do you think about meeting with a client and trying to figure out what is the best loan to put them in? What can you do to move things around? What do you know that like this is the best product for you? To me, that to me is a secret sauce. It's not like, oh, you're just generic, put in this and then we're gonna send you a mortgage. And I feel like, you know, we've gotten to that point where originators understand that, right? This is not the refi boom where it's like, you're an order taker. - I don't know that we're gonna see order taking anymore in this industry. It feels like personalization is such an important piece to what we do, that order taking is really hard. And if we are just slamming people in the same product over and over and over again, we're actually doing a disservice to their future financial self. And our fiduciary responsibility as licensed professionals is to really take people for where they are, hear where they want to go and help lay out opportunities and options for them to get there. And moving people directly into one bucket because that's the flavor of the month and what the company says you're gonna focus on seems to be a bit, man, I'm just imagining how many people are listening to this and how stupid I can sound if I'm wrong. But, you know, we need to treat people with that fiduciary responsibility if you're not all created the same. You all come from different backgrounds. We all have different dreams and hopes and aspirations. A hundred dollars means something different to everybody. And let's stop trying to treat it the same way for all people. AI has a hard time with that. Humans can have that empathy. And into the bucket thing I was listening to. So with the MLO force and all the training we do, I like to elevate a lot of other trainers out there that have different aspects. And Dion Bass with Ask the Underwriter is one. She's got such a huge heart. And she said, even today on a breakout session, she said, look, there's all these loan buckets. And every time you take an application, the good loan officer starts thinking, hey, this loan is gonna fit in this bucket or that bucket. But we all know that the buckets change as you get the bigger story. As you work through the process with people, you may hear something go, I didn't know that, that would fit better in this bucket. Maybe we move you to this different loan program or at least give them the option. And that's huge. What do you think has changed, say, even in the last year when it comes to education and what you think, of course, they're continuing education credit. People have to have certain things. But what do you think they need to know right now, originators, that's new? - Okay, so this one's fun. And what we're gonna cover in '26 is continuing education is big. There's a couple. So I think we're all watching the news. We're all seeing more natural disasters hit more regularly. So understanding how different loan programs actually handle natural disasters is a big part of it. I don't know that everybody's really brought up to speed on the 203Hs and the FHA natural disasters and what different programs we'll do. And so that's one thing I think we need to look at. The other, it's been in the news lately, but occupancy fraud, it's remarkable how long I've been talking about all these federal rules and regulations and all this stuff. The proverbial stuff rolls downhill regularly, right? And one of the greatest things you can do as a company to put up a barrier against what's rolling downhill or to divert it from you is to train your people. Because you've got to train your loan officers, your processes, your team members, your closing, your secondary, everybody on the annual compliance topics and what needs to be covered. Because as they make mistakes, you've got to show we took the steps to train them to make sure they were doing it right. And if we found it wrong, here was our management principle. Yeah, they still chose to do it, therefore it's their fault. Loan officers need to hear the same thing. If your company's training you and telling you how to do it and you still choose to do it wrong, guess what? The regulator's going to move their crosshairs from the company and go, oh, you're the one? We'll focus on you now. And I think loan officers need to understand they are not out of the crosshairs when it comes to regulatory oversight, no matter how big the company is. They can get picked out, singled out and regulated against, I guess we'll say it that way. - When I just did an interview with Matt Van Fossen, who's at the MBA, he's in charge of their state level like compliance things. And what he says is like, you might think, oh, well, what's the CFPB going to do? There's nobody there, right? But the states have stepped up in a big way. - They are. - And so I think that that's something too. Is it anybody who thinks, well, you know, right now no one's really watching. First of all, look back, but second of all, they are actually there's more eyes watching maybe. - If anything, I think some of the states have got a little bit more forward aggressive, like they're trying to move a little faster because they, not for fear, but maybe see this opening, this opportunity of, oh, well, the federal regulations kind of backing down. So we will step into this. We see this regularly in our training, especially our continuing education. Every state adopted their safe act. Every state within their regulation says we will regulate and manage you to our state rules and the federal rules. They don't distinguish between the two. If they come in and say they have a respo violation, they're not going to say, well, it doesn't abide by our state regulation. They go, oh, no, no, it's a respo violation for from the federal law. So therefore we're going to apply it as a state regulation. So it is important to understand, yeah, it's all encompassing. - That's a great, I didn't know that. So as your layman over here, laywoman over here and definitely did not know that. Let's talk about veterans. Obviously, this is very close to your heart. Veta VA, you guys do an amazing job. What do you think has changed for veterans or for serving veterans in the last year? - When Christopher Griffith and I started Veta VA about six years ago, it really was just make sure people were aware of what the benefit was. And we were countering people saying, no, no, skin in the game. Real estate agents saying they weren't going to entertain an offer from a VA loan, et cetera. I'm happy to say that either as a whole or at least anecdotally from what I can see and what I'm hearing, it's less likely that a veteran with a VA loan is going to be turned down just because it's a VA loan, especially in their offers to buy a house or such. There's still a miss here though. There's still a miss on what the VA loan can do as far as residual income overriding like a higher DTI. Lenders understanding what the risk analysis is and being willing to take such stabs at loans that may be just a little risky. But if you look at VA trend lines and Jenny made back securities, right? You're less likely on the VA loan to get a default. And so when you start looking at the trend lines and like, okay, well, maybe we are willing to drop our FICO score a little bit if they have these higher residual income and they've got some reserves in the bank when they're done. You can offset your risk cycle enough, in my opinion, that the VA loan now becomes very powerful because coming off COVID, coming off service standards, coming out of all the things that hit people left, right and center, a veteran who wants to use their benefit and has shown there are positives in their lending cycle, but maybe their FICO is the one that got hammered on. There should be a reason and a way to get through that and still get your loan secured as through Jenny made chapter 24, et cetera. So some of our great lending partners, Elend and EPM, we've got the Loan Store and Rocket, they've started training their people on VETA VA's training. They're underwriters, they're account managers, they're AEs, they're sending their people through it. They're learning what we're teaching. We've got over 36 hours of training content developed just about the VA loan for anybody who wants to touch one. And that has been one of the greatest things. It's like manual underwriters are not scary. There's a structure. And just 'cause the automated system says no, doesn't mean it's a dead deal. It just means we've got to do a little bit more work. (upbeat music) - I would think there's a lot more appetite for that now. I mean, one of the things we saw 2021 is like, if you have 35 people who wanna buy the home, right? A lot of times we saw that VA get to the bottom of that pile, unfortunately, because real estate agents or lenders felt like, oh, it's gonna be too much work or it's gonna fall out. Meanwhile, they're competing with other offers. But in this volume and knowing what you just said, understanding more about it, it seems like this is an opportunity for lenders. - Sellers need to make the right choice for them, right? When a seller gets a bunch of offers and they look at the offers and the greatest thing to me though is that the veteran wasn't turned away from making the offer with their VA loan. If they make their offer with a VA loan and there's a few offers on the table and the seller doesn't choose their offer, fine. But if they're even told not to even make an offer with their VA loan, that's a loss, that's a problem. So we don't wanna stop nor do we think it's they need special treatment. More so, they should be able to utilize the benefit with confidence and make an offer with confidence on a property that they think they wanna buy for their family. - What are you excited about for 2026? - Oh man, there's a few things in 2026 in lending structures that I'm really looking forward to. So I know the Brooker Action Coalition is doing a lot of work right now. They've got a couple of VA bills on. You know, when the 1003 went through their last rendition, let's quote, air quotes, their last rendition of the 1003, there was supposed to be a line on the first page that said, "Are you a veteran of the United States military?" And for whatever reason, that question got bumped to page seven, like it was like below, below, below. And there's a bill out there and Brendan McKay can tell us a lot more about it, but it's basically gonna move that question up to page one. And that, above all, is amazing. Why? They don't have to use their VA loan if they say yes, but it will report on HUMDA if they were a veteran. And that will give us the best look into who's using their VA loan and why. All of a sudden, we will be able to see with HUMDA data those numbers, the number of veterans that were applying for loans that chose to use their VA loan or chose not to use their VA loan, what their buckets, we can estimate some FICO scoring like there's so much data, we're gonna be able to extrapolate if this gets passed. So I'm excited about that. I'm really hoping that'll happen in the next year. I'm honestly excited about all the technology advancements that are coming. Every time I turn around, something else is moving through. At EMLO Force, we are talking about technology, we're talking about how to utilize chat GPTs and train them so that you can then start using them to help you with compliance. Again, doesn't replace your compliance manager 'cause they're the ones that actually analyze risk, but if you can take your compliance manager ahead of time, hey, I wanna run this advertisement or I wrote this blog post and I think it says this much about it's gonna flag the rest of our something year. It'll really help us all in the industry just be better and operate in a more compliant way. - What are you doing at Vetted VA with AI? - There's a couple of things with AI and Vetted VA. So we have generated, you know, it's fun with AI is that it's a garbage in, garbage out. So we put a lot of the handbook and then Gini made chapter 24, a lot of data into an AI. We've been playing around with this for a while. And then what I was trying to do is make it easier for a loan officer to explain conditions to a veteran that the underwriter might have given. And where based on the handbook that condition's coming from 'cause underwriters laps are, they're usually, they're extremely well educated but they're not always great at teaching why they're asking for a certain condition. And so trying to help them offset that, hey, here's all my conditions, but giving a broker or loan officer the understanding of here's why the condition was asked for so that the loan officer in the future can understand and kind of get ahead of that problem if they see it come up again. Like maybe they're asked for more pay stubs or letters of explanation on things that they were like, I don't think you need that based on the handbook. Well, they're not familiar with Gini made chapter 24 and if they go read Gini made chapter 44, they're like, oh, that's where that condition came from. So we wanna make tools and use AI in a way that helps loan officers at kind of the frontline of serving the veteran community, the VA eligible consumer be more efficient because an efficient process means a more efficient close, means a better experience for everybody. Really interesting. Also it seems like you are optimizing for each one, right? I think that's what it lets you do because like a human's not like, oh, I have this all memorized. But in the moment, the AI can help you to know exactly how you could optimize that. Yes, 100%. Nathan, thank you so much for sitting down today. It's great to get to talk to you. Absolutely Sarah, thank you so much. (upbeat music) Thanks for listening to "Housing Wire Daily." If you haven't already, we'd love for you to take a minute to rate the show and leave a comment and make sure to tune in tomorrow for more news and insight.