In this webinar, mortgage industry experts will discuss how automated decisioning transforms lock desk operations to reduce repurchase risk with rapid pricing changes and transparent audit trails. The discussion will highlight how lenders with successful secondary operations have shifted from manual, error-prone processes to treating business rules as strategic assets that drive competitive advantage.
The panel will explore pain points in secondary operations, including LLPA changes, policy enforcement, regional pricing adjustments, implementation delays, audit concerns, and float down/extension management. Speakers will explain how modern decisioning technology replaces spreadsheets, eliminates repeated discussions with IT on rule updates, and empowers loan offices to make rule updates directly with full auditability.
What you’ll learn:
How to transform manual lock desk operations into transparent, auditable processes that reduce policy enforcement risk and protect your organization during audits and repurchase requests.
Strategies to empower business users to implement market-responsive pricing changes without IT dependencies, eliminating the “telephone game” of requirements translation.
Methods to differentiate your lending operations by treating business rules as first-class assets instead of relying on Product and Pricing Eligibility (PPE) tools for critical business logic.
The panel will explore pain points in secondary operations, including LLPA changes, policy enforcement, regional pricing adjustments, implementation delays, audit concerns, and float down/extension management. Speakers will explain how modern decisioning technology replaces spreadsheets, eliminates repeated discussions with IT on rule updates, and empowers loan offices to make rule updates directly with full auditability.
What you’ll learn:
How to transform manual lock desk operations into transparent, auditable processes that reduce policy enforcement risk and protect your organization during audits and repurchase requests.
Strategies to empower business users to implement market-responsive pricing changes without IT dependencies, eliminating the “telephone game” of requirements translation.
Methods to differentiate your lending operations by treating business rules as first-class assets instead of relying on Product and Pricing Eligibility (PPE) tools for critical business logic.
Category
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NewsTranscript
00:00Welcome, everyone. I'm going to give our attendees a moment to come into the webinar. How are we
00:15doing today? Doing great. Thank you. Good. All right. I know we have a lot of content to get
00:24through today to our attendees. Welcome. I'm Alison LaForge, the Managing Editor of the Content
00:30Studio at HousingWire. Before we jump into today's webinar, Danger at the Pricing Desk,
00:37Automating Pricing Policy to Avoid Risk, presented by Sapien's Decision, we have a few housekeeping
00:43items. Today's webinar is meant to be interactive. You can submit questions for the panelists at any
00:48time by using either the chat or the Q&A icon at the bottom of your screen. Time permitting,
00:54we'll answer as many questions from the audience as we can at the end of the webinar. Now, the fun
00:59part, today's content. I'm going to hand things over to today's moderator, Mark from Sapien's
01:04Decision. Mark, the floor is yours. Great. Thanks, Alison. And welcome, everyone,
01:09to our webinar, Danger at the Pricing Desk, Automating Pricing Policy to Avoid Risk. I'm Mark
01:14Sidlaskis, Director of Marketing at Sapien's, and I'll be your moderator for our discussion today.
01:18So thanks for joining us. Let's tackle up the objectives for a second.
01:26Right. So if you're in mortgage banking today, you're navigating headwinds, rising loan manufacturing
01:31costs, stagnant volume, and raising third margins. Lenders can't afford to rely on tribal knowledge
01:37or manual checks anymore, especially in secondary markets where investor trust can make or break
01:42profitability. Today, we'll be talking about the way business policies are implemented and managed
01:48through business rules and where technology and process gaps can increase repurchase risk and hit
01:53the bottom line. We'll first define the problems with your input and then describe decision automation
01:59solutions that address challenges that are related to rapid pricing challenges, creating a transparent
02:05audit trail, and ensuring that policy changes are enforced. Now, let me introduce my panelists for today.
02:11So joining me today are Mike Kelleher and James Boynton. Mike is a mortgage industry expert and founder of
02:20Adopt the Brand, a mortgage industry consultancy. He brings an entrepreneurial view and experience in
02:25delivering mortgage technology to the market. Mike also runs a weekly podcast, Mike Duck, covering the
02:31industry. Welcome, Mike. Thank you for having me, Mark. You got it. James Boynton is also a mortgage industry
02:38veteran and senior consultant here at Sapiens Decision. His background includes secondary marketing and
02:43operations at companies such as MB Financial, Citibank, and ABM Amro. James also ran pricing for MB Financial,
02:50so this is a topic near and dear to him. Welcome, James. So let's get started with our content about pricing risks.
03:02So let's start the discussion with Mike. Mike, what is driving repurchase risk?
03:07Right now, today, repurchase risk has to do with what you're finding in your QC audits. So you see up on
03:18the screen here, there's certainly the market volatility, there's the QC misalignment, maybe
03:24price adjustments, cost decures. But what we're finding is prevalent is inline QC and how are you able to
03:33take the repurchase risk and bring it right to where the decision makers are. And sometimes they
03:40are doing it through shadow systems, Excel sheets, or tribal knowledge, or as you'll hear more today,
03:46it's hard-coded in the systems. James, what's your take on this?
03:52Yeah, I mean, my experience running the pricing desk, there was, my fear is you have some inconsistent
03:57exception handling out there, right? You've got humans out there trying to apply policy,
04:01and then you've got yourself gaps out there with compliance. You've got systems out there,
04:05often multiple systems where you're housing your adjustments or where your pricing is coming from.
04:09So you have price adjustment failures there, not just in one system, but in multiple.
04:14You could have different things for different investors that get you tied up. And then,
04:17of course, the market is always volatile. You're always trying to adjust to the latest LLPAs that
04:21are out there from different investors. And you're also trying to adjust to all the different things
04:25out there that your salespeople are begging for in their different markets, right? So there's
04:28different things that you just are constantly adjusting to, and you're constantly adjusting
04:31to them in more than one system. And it is definitely a challenge and can keep you up at
04:36night. Excellent. So let's move on to the next chart here. We want to get some audience
04:42participation here. We want to understand, so which of the pricing challenges are most urgent
04:47in your organization? So we have the polling questions here. We have these choices, complexity in
04:52pricing, adjustments, technical implementations, and policy enforcement. And Mike, maybe if you could
04:59give us some explanations, make this a bit more clear as to what we mean for these survey questions.
05:06Just as a brief overview, and James can jump more into the details, but the complexity of pricing
05:13within different areas, whether it's LLPAs or county limits, but as lenders are trying to expand
05:20across the country, they're running into different complexities that are new to them. There's pricing
05:27adjustments as we are going into more non-QM and second liens. There's more pricing adjustments,
05:35not just that you have to do as a company, but your loan officers have to get used to as well.
05:40I am heavily involved in the technology space, and the technical implementation delay is real.
05:47A lot of people are dealing with going to the EPC, Encompass Partner Connect, which is pushing back
05:54some of the promises they made to their clients, and then policy enforcement, which is a great segue
06:01over to James. Yeah, one of the things that was hardest for me in my time as pricing manager was
06:06getting the folks on our lock desk to be able to enforce policy, right? A lot of those things
06:10are not systemically done, and they're done in the brains of the people on the phones at the time
06:16they're on the phones with your customers, right? So super error prone and makes it even more
06:21concerning to know that those errors can happen and they can get you in trouble with your regulators,
06:25right? So you've got to make sure your policy is consistently applied across the board, and
06:29it's real hard when we've got humans that we're relying on, and you're talking about the complexity
06:34that goes into it. Mike just touched on it, right? You've got pricing adjustments all over the
06:37place. You're begging for help from the IT side, and you're always in line to try and get
06:41prioritized. And that line that you're in leads you to do things like creating your shadow IT
06:47systems, right? Creates that access database in the background that IT is not a fan of, but you
06:53need it to survive. And there's things back there that just make themselves happen. It's kind of like
06:58a hidden factory that's out there that people don't really want to talk about, but I'd like to bring
07:02that out of the shadows and be able to talk about how that exists, how it keeps you up at night, and then
07:05ultimately maybe a little bit about what we can do about it. Excellent. So I think we probably have
07:11our results in from our polling. Mike, how would you interpret these results? I'll start with you.
07:20I'm excited that the main answer is in my wheelhouse, which is technical implementation
07:25delay. We always had a saying back at Easy Mortgage Apps, it'll be twice the cost and take four times as
07:32long as somebody says to deliver. And I think that's just the universal fact of software. So
07:37when we say one of the benefits of what we do is hard-coded, what we are saying to the layperson
07:45is, or I should say like the office, Michael Scott said, talk to me like I'm four. It just means the
07:52vendors you're dealing with, if you want to change, it's not going to happen overnight. And there is an
07:58implementation schedule and you need to get in line. And so I think that's what the complaint
08:03is. As times are getting a little bit tougher, those delays are happening more and more with the
08:08vendor partners. James, how would you interpret some of these results? Yeah, I mean, this is the
08:17stuff I live, right? So it makes sense to me. And the technical implementation delay, when you've got
08:21things that happen, whether it's a new product you have to put out, whether it's a natural disaster
08:26that happened and I've got to figure out how you're going to extend a whole bunch of loans that
08:29are in a certain area because something happened out in the world, or it's just the market moving
08:34real fast, right? Competitors come up with something, you've got to react to it. I mean, all that stuff
08:37ends up dinging you and you don't, you don't have time to wait, right? That time that you have to
08:42wait is money you're leaving on the table. So, I mean, I can see why that is number one.
08:48Let's move on and talk about the impact on the business that these challenges have.
08:53So we look at them at various different levels. And Mike, can you take us through this?
09:01Yeah, I think at a macro level, if you're on LinkedIn, you're seeing a lot of lenders need
09:06to recruit harder than ever. And one of their strategies is a transparent P&L where they're
09:12offering raw pricing and working their way back. And when you do that, you expose yourself
09:19as an industry to many different people wanting to see how everything works. And therefore,
09:28you need to, as James talked about, you're more on the clock to make these changes faster.
09:34And if you're relying on third-party vendors, that can often be slower. And if you're relying on
09:41shadow systems, which could be technology, could be an Excel sheet, could even be you have workers
09:46using printouts to move faster while on the phone, all of this makes it harder to have
09:52transformational shifts. So I think when I originally talked about QC and the ability to deliver to
10:00investors a quality loan, one of the problems that we see is most of this legacy software is built in
10:08milestones. So a lot of these checks and balances don't happen in line. And when I'm having conversations
10:15around sapiens, that is where the big institutions find the biggest lift is you can bring it rather than
10:20at the toll booth at the end of a milestone change in real time. And also the ability to have subject matter
10:27experts not have their ideas lost in code. So when you look at some of the hits to profitability or impact on
10:35business, it's those cost to cures at the end. And if you could address them further upstream or more at the
10:42point of where you took the application, you would be able to avoid many of the costs that go into
10:48originating a loan. And it's hard to do that if each subject matter expert is siloed within a software
10:55that doesn't speak to the other subject matter expert. When you have one place where it's a no-code
11:01environment and they're able to see true decision logic or a visual logic layer, I always called it
11:09the iPhone moment. From my background, iPhone moment was very well popularized by the term.
11:15Anybody that went from a BlackBerry to seeing an iPhone and that you could touch screens,
11:19they couldn't get it out of their head and go back. And that was my experience with sapiens decisioning
11:25and the use cases. I'm sure James can get more into the granular lift of how you could get started.
11:32Yeah. I mean, it's funny you call it the iPhone moment. I've called it like once you see the matrix,
11:35you can't unsee the matrix, right? So when you finally have a chance to see what you're going
11:42through, what you're living through every day and kind of pull back, take a moment to breathe
11:45and realize it's not just about pricing loss or rework. But you're, I mean, down on the right
11:50hand side of the slide talks about the inability to implement audit and reinforce rapid policy
11:57changes, right? That's a big deal. It's all about timing and to be able to do that and see how
12:02you can do it and you can control it and you can do it. Mike talked about it with terms,
12:06you know, right? It's in business friendly language. It's a way that you can control
12:09those ideas that you guys have, all of that tribal knowledge, all that logic that you've
12:14got, the business logic, that's an asset. Like all of that knowledge you have is an asset and it's
12:19lost in several different systems today. And it's hard to keep track of and keeping that stuff
12:23straight and knowing where it applies, when it applies, how it applies, all that's really
12:27complicated to keep track of. And you're lucky if you can. I hope we could talk a little bit
12:32more about ways that we can do that. And I'll just add one more point. Yes, I have not worked
12:38the pricing desk, but I don't think anybody's been on more software mortgage demos in the last 10 years
12:43than me. And I've seen it all. And I can't name one other that I call an iPhone moment. Like once you
12:50see it, you can't unsee it. This was truly it. And it, when you do see it, you will see exactly what
12:59I'm talking about, why James agrees. You can't fake that moment. And this sapience has it.
13:07All right, we're going to get red pilled here. All right, so let's move on and talk about some of the
13:12challenges. So we talked about defining what the problem is. And now we'd like to get your opinion
13:18on, well, what are the barriers to addressing these challenges? And we've laid out a couple
13:22of challenges here in terms of acceptable risk, lack of resources, vendor lock-in, fix with people,
13:31and not the technology or other. So James, if you could walk us through your assessment of these
13:37factors. Yeah, I mean, for me, I think starting with the risk is considered acceptable. It's one of
13:42those things that may be a headache for you in pricing or for part of the pricing world. But
13:48other people consider that acceptable, right? They think it's okay the way it is. It's not worth
13:52the change. It could just be you can't get resources. I mean, that is definitely a challenge
13:55anywhere and everywhere. Vendor lock-in is interesting to me, right? So you've got a vendor
13:59that just can't do any better. You're already too far in bed with them. You can't get out of that.
14:04So vendor lock-in is a real thing. And oftentimes, man, at the time I spent mortgage, I can't tell you
14:10how many times you saw bodies thrown at the problem. So a whole bunch of people, not necessarily
14:14technology. And a lot of that is because of things we talked about on previous pages, like
14:18you're just in line, right? Or you can't get the IT resources or whatever it is. So fixing things
14:23with people or technology, or is it one of the things we haven't mentioned yet? Is it something
14:26else? Which I would love to know what that is. Mike, any comments? I'll just say vendor lock-in
14:35is top of mind to me right now. You traditionally had one PPE firm that had about 2,000 clients. And
14:42now you're starting to see two other names, very current. So people are finally making moves. There's
14:50inertia around that. Plus the elephant in the room that has an LOS is always going to offer a free
14:59version. And people are going to try and dabble in, does that make sense? And when you move,
15:07all of that business logic, and that's the point of the message behind sapience decisioning,
15:14all lenders are treating business logic like a second degree asset. And it should be your first
15:20degree asset. It should be your major asset. And if all of your PPE logic stays in that vendor you
15:28leave and you can't bring it to the new one, it is second degree asset. It's not first. If you're
15:34able to bring it and plug it into the new vendor, not only do you control that IP, you build value,
15:41but it can take care of anytime you're going to change different technology vendors. You're going to
15:48run into change management. You're going to run into humans fighting against it. You're going to run
15:53into edge cases you weren't ready for. And I think that's the magic. If your business logic is built
16:00that when you port it over to this new vendor, you have all those edge cases taken care of because
16:06your business logic is your chaperone or your net that you need. It makes it less about vendor lock-in.
16:16Okay. So I think all the results are in. Let's see the results.
16:26Okay. Lack of resources leads the way, followed by vendor lock-in and fixing with people and
16:32technology. So James, any surprises here? What you expected?
16:37I was just a little bit surprised. I didn't see any other, but the risk being considered acceptable
16:42makes sense that that's low, right? There's not a lot of things in pricing that are considered
16:46acceptable risks because it's all money and it's all right there in the beginning, but every now and
16:50I need a few of those. But it is interesting to see that lack of resources for something that is
16:55as critical as pricing, whether it's the regulatory environment and the dangers of being out of step
17:00with what your regulators expect, or just potentially losing money because you price something wrong.
17:05And that could be something that you gave away money on you didn't mean to, or something that
17:09you're pricing way too high that you're not able to gather that or gain that business on.
17:16I think just knowing that the value that comes in pricing, that having lack of resources being
17:21number one surprises me a little bit, but I mean, nobody has all the resources they want. So I guess
17:25that there's some sense to that for sure.
17:29Makes sense to see, Mike.
17:32Yeah. The lack of resources makes sense. Everybody cut as much as they could and they cut the people that
17:38would maybe help in this area. But listening to James, that's the whole story to really zoom in on
17:49is sometimes you cut without doing a deep business analysis of ROI on the ancillary or collateral
17:57damages. And he just hit it. You might be cutting somebody that had the ability to prevent you from
18:04mispricing or overpricing. And that's scary.
18:08Yeah. And that seems to be a trend in the industry, fix it with other people technology. And because of that,
18:14you may lack the resources when you really need it. So let's shift gears a little bit. We've talked about
18:21the problem. We've talked about the challenges and fixing the problem. Now let's talk about the solution,
18:27Sapien's decision and what we bring to the table. And James, if you could give us an overview of what
18:34the product is all about. We talked a lot about logic. What does all the logic mean with Sapien's
18:39decision? Yeah, the logic, I think, and I'm going to start with that second little point there,
18:45enables business users. So Mike talked about treating your logic as a first degree asset or first
18:50priority asset, not something secondary. And that is massively important to know and to hold
18:58on to. So in this case, with decision, you can have the business users do it. It's not business
19:03logic that is in IT or business logic that has to be translated and stuck in a requirements document
19:08somewhere. It lives with your business users. They can use the system. It's actually a true no-code
19:15platform. So there's not anything that, and I'm just thinking back to the times when I would try and
19:19work in different databases and try and read code that I, when I was a pricing manager, I wasn't a
19:24coder. So this is something that truly is no-code. Trying to read through code and sift through code
19:29and see what that was going to do to me was a nightmare and a headache for me. The other thing
19:33that's really nice about this, Mike touched on this too, is it's system agnostic, right? It doesn't
19:36matter what system you want to tie it into. Because it's a modern software as a service type of
19:43solution, it can tie to multiple systems with this one set of business logic defined by your
19:49business users, which is great. If you've got existing business logic and other systems,
19:53or maybe it's COBOL code or whatever, there's some AI enablement you can use to pull that out,
20:00pull the business logic out of that, and get it into this decision that ends up using business
20:05terms that business users can read. And then kind of the proof being in the tasting of the pudding on
20:11this one, there's some big dogs out there that do use this, right? I mean, we've got people like
20:14JP Morgan Chase, Bank of America, Wells Fargo, U.S. Bank, and even Freddie Mac that use this tool and
20:20use it pretty effectively. So it's not just something that is, you know, if you haven't heard
20:25of it before, it is something that's out there and being used in the market. It's not a fly-by-night
20:30type thing. It's well-established.
20:32Hey, James, explain something to us. You talked about a decision, making a decision. And I see the picture on
20:38the right side. It's essentially a decision logic. Could you explain? Yeah, there it is right in front
20:44of us. Explain to me what the decision is, what a decision is, and how the graphic on the right
20:52side just kind of flows into that, how it's used. Yeah, I mean, this sounds overly simple, right? But
20:57it is this easy, right? So decisions, anytime you have to make a choice, right? If it's based on
21:01criteria, and if you want to back it up and make it really simple, it's all just if-then statements,
21:05but managed in a way that you can use if-then statements, piled and piled on top of each
21:11other, intertwined with one another and doing all that type of thing. But if you look at the
21:14document, the diagram on the right or that image on the right, you can see that there's a box at
21:19the top. And that box is the one thing that is represented in that decision. So that decision
21:24is all those boxes. And all the different boxes beneath the top one are called supporting logic.
21:28So it's really just a way to take all the if-then statements that you need to get to and answer
21:32and figure out how they're related, how they're related to one another, how they support one
21:36another. And really, it takes all those incredibly complicated things and makes them nice and visual
21:41and simple to follow. It's something that you can learn to read in five to 10 minutes. It's very
21:48powerful in terms of visibility. You can see it right there. And the structure of it is always going
21:52to be the same in terms of the principles of the structure. So once you know how to read one
21:58decision, you can read them all. So if I want to determine if this pool of loans fits my investor
22:04criteria, that would be the decision. Does it meet the criteria? And I'd use this structure.
22:11All that wonderful supporting criteria to give you a yes or no, it fits or it doesn't, right? So all
22:14those different pieces and guidelines from the investors, you can layer in there and figure out
22:18not just from one investor, but multiple investors, whether or not it gets to go to investor A, B, or C,
22:23or maybe just A, or B and C, like all those different types of things you could layer in
22:28there, as well as doing any of your LLPAs and all that pricing structure as well. Yeah, it's anytime
22:33you'd use an if-then statement, if you can logically think it through that way, decision does that for
22:38you. And it'll help do it consistently across any system you want to be able to tie it to.
22:43Okay. Let's go to the next chart and talk about where this fits in the stack.
22:48And maybe you could give us some. Yeah, there we go. And if you give us some example use cases,
22:54we've talked a lot about potential things that go wrong. How would decision resolve some of these
22:59issues? And Mike, jump in here too. Yeah, I don't know, Mike, you want to go first and I'll jump in.
23:06I love this visualization. Long overdue for a business logic layer in the mortgage industry
23:13to have your people interacting on the bottom, let's say with the point of sale and then your
23:19users up on the LOS, sort of separate on different layers and different POSs dropping into LOSs at
23:27different times. You're having so many silos and this breaks down silos. I'll give you a use case
23:34on a company we just signed up. I was working with them and they are in the non-QM space. And in fact,
23:41I'm talking to quite a few non-QM because it's getting popular and it should be. The margins are
23:46there, the branches like it, and it's going in three phases. So phase one will be, and James
23:54mentioned this software is used every day as an AUS on the conventional side by everybody attending
24:00this. Non-QM, we constantly heard you can't make an AUS for non-QM because you have to have a gut
24:10instinct or you got to be able to look at bank statements. That is the definition of tribal
24:14knowledge. So they are going in three phases. Phase one is for the underwriters to better green,
24:21yellow, red, and that's going to surface in the LOS. Then phase two will be maybe eight months down
24:29the road, maybe nine, where the AEs out there will be able to, on the road, tell their lenders,
24:38IMBs or brokers, whoever they're dealing with, what they see as potential conditions, just like
24:44running it through a conventional AUS today. But this will be a new non-QM AUS where they'll be able
24:50to give conditions and help them. And then down the road, phase three would be another block you might
24:57not even see here, but you'll be able to surface it in a web portal where the loan officers can
25:03actually go in, price it out, and maybe they didn't attend the webinar, but they're still able to go
25:10with the behaviors that they're used to, to see if this should qualify for a non-QM. And with the world
25:15going rocket and apps like Zillow, the riches are in the niches. And if your team can understand
25:25non-QM, there's going to be a lot of opportunity there, but James will tell you, and he can go in
25:30any direction he wants, but you could replace non-QM with anything in that scenario.
25:37Yeah. I mean, you talk about riches being in the niches. And so if you look at that middle layer
25:41where you've got AUS, MI, LOX, LOPAs, assignments, saleability, underwriting, every lender I've ever
25:47talked to, every lender I've ever been with always has a slight little tweak on how they want to do
25:52stuff from the standard. And that's one of the things that is that tribal knowledge, right? How
25:56do you have that done? How do you want it carried through from system to system? Can you maintain
26:00all that business logic, do it consistently and have it apply from your LOS to your POS,
26:05to your CRM, to your PP? Can you do that? And decision lets you do that. It lets you be that
26:11hub for all that business logic that can go from system to system and be applied the same way every
26:17time it's the same logic. And the beauty of it is when you're building it, it's all in business
26:21friendly terms. And when you spit it out, it's actually the push of a button and it creates,
26:27it compiles IT quality deployable code that you can then use in your systems directly. So because
26:34of the wonderful structure of decision of that image you saw a couple of slides ago with the boxes
26:39and a single question at the top and all the supporting detail underneath it or all that supporting
26:43logic, because it's built that way, it can, it decision can spit out code that works with anyone
26:52or all of those systems, as long as you've got API hookups for it. So it can be its own thing.
26:57The reason the GSE loves it so much is they went from 90 days to implement the change to
27:03less than an hour. They can now put it into sapiens. So when you think if there's a hurricane coming
27:08through and they need LTV to go down so that all the loan officers across the country are running it,
27:12it goes refer for a little bit while they figure it out, whatever the scenario is, you're able to do
27:19that. And another example of business logic as a second class versus a first class, say you have
27:26your own program and you want to move it as quickly. The leading LOS that everybody is on, if you want to
27:33change a rule because it's not their primary business, then all the loans that go through
27:38follow the new rule. And so it can start to cause a mess. Whereas with your own logic, you could say
27:45all new loans make change after March or after June 15th. All existing loans can still follow the old
27:53rule, new rule. Having control of your business logic there has been a huge interest for people that
28:00have gone through the pains of the number one LOS provider. If you change a rule, all the loans that
28:06go through it, hit that either new rule or old rule. They can't manage two rules. And you can see how
28:11that becomes a ecosystem that doesn't really make sense. Yeah. And the audit trail for decision is
28:18wonderful. So like to your point, Mark, if you've got our mic, sorry, if you've got something where you
28:22need to establish a new rule based on lock date or application date or whatever date you want,
28:27you can do that. And you can see exactly when something applied and why. So the audit trail is
28:31great. If you have an auditor that comes in and has questions for you, it's so easy to answer.
28:36And just being able to apply it to different systems when you need, not to two different
28:41systems, to any different system, whenever you need to do it. And you can do it very quickly to
28:45Mike's point. So the long pole in the tent there is going to be you trying to figure out what you want
28:51to do. It's not actually making it happen once you decide to do it. Excellent. So thanks, James and Mike on
28:56this. Let's move on and get to some of the benefits and begin to wrap this up and go to
29:01the benefits here. And James, if you could take us through a high level here of what you see the
29:06benefits are to Sapien's decision. Yeah, we just touched on the first one. Business, user-friendly,
29:12fast and easy, no code, right? You're not expected to be a coder to use decision. In fact,
29:18as a business user, my favorite toy to play in was probably Excel and sometimes access. And this just
29:24was right in that wheelhouse, right? Nice and easy, nothing too crazy. I didn't have to be a developer
29:29to read it or to share it with other people and teach them how to read it as well. The bulletproof
29:33business logic, there's a testing facility within decision that makes it so that by the time you
29:38deploy it, you know, your business logic is bulletproof. You don't have to hand it over to
29:41IT and wait for it to be hooked up to other systems to see if your logic's bulletproof. You know,
29:45before it goes and that the testing facility within decision helps you do that. I can't tell you how much
29:50I would have loved to have had that as a pricing manager. I mean, my experience as a pricing
29:54manager is one of the reasons I'm here. I was a client, right? So it's one of the reasons I moved
29:58over. It's because I believed in it. And we talked a little bit about the audit trail, right? It's got
30:02complete accountability. You can see the moment a person creates a data element within the tool and
30:07who approved it. And then you can look at all the models that build upon that. So you can tell the
30:14moment it got started, you can tell who approved it, you can tell when it was deployed, when it was no
30:18longer active, whatever you want to see, all that audit trail is in there. And it's a wonderful tool
30:23for those auditors that want to question, why did this lot come out this way? Why did you price these
30:28loans this way, but not that way? Like you can follow every one of those scenarios through the tool.
30:34Right. Why don't we go to wrap things up?
30:39The next chart. And Mike, if you could take us through what we've heard,
30:43some of the major takeaways here before we get into the Q&A.
30:48My major takeaway is you have to be hyper local to win in this new market. Brian Hale gave a great
30:56example at the Housing Wire Economics Summit, where there are so many different, there's 42,000
31:03zip codes, there's 520 MSAs, and almost every lender prices broadly. And so they're either overpriced in
31:11certain markets or they're underpriced in losing money in other markets. And it's because the famous
31:18saying that Jim Deitch taught me is the people that got you here aren't going to be able to get you
31:23out. And the systems that got you here aren't going to be able to get you out. This is a new system
31:27that allows you to take better control of the new market, which is hyper local, which is catering to
31:35the loan officers and providing transparency like never before and getting out of vendor lock-in
31:41and treating your business logic like a first class asset. And this business logic, when you go to exit
31:49someday, will grow and grow.
31:53Thanks, Mike. So why don't we wrap things up and turn to Allison and get some Q&A questions from the
32:01audience.
32:01All right. So let's jump into our first Q&A question so we have time to get through as many
32:10as possible. So the first question I have is, let's say we're replacing our PPE system with
32:19another provider. Is the SAPIEN solution an option?
32:23That's a good question. I think one of the things that SAPIEN does well is because it can talk to
32:31almost any system you need, right? As long as you've got an API, you can communicate back and
32:37forth with the code that comes out of there, right? So depending on what you need your PPE to do,
32:43it's not going to generate a rate sheet for you. That's not what it does if you're looking to do
32:46that type of thing. But if you want to be able to price loans and to make sure that all of your
32:50LLPAs are captured in there, absolutely. So it really depends on what type of thing you're trying
32:56to do with your PPE before I can say a flat out yes or no. But can it help you? Absolutely. Will
33:00it be faster? Absolutely. I mean, just the number of things that I remember having to go through and
33:05the systems I went through to be able to build a new product or to update an LLPA, it made me want
33:12to pull my hair out. And I know one of the concerns that comes up when we talk about using decision is,
33:17is it another system? And I would submit to you that it's not necessarily another system as much
33:22as it is a different system. And I would even posit that it's a better system. So you're doing
33:26all of these things today. You're updating your LLPAs. You're building out new products.
33:30You're creating rate sheets. You're doing all of these things and trying to tweak your pricing
33:34with as fine a point as you can for every little market to Mike's point, right? You got to be able to
33:38win locally, not just nationally. And by being able to scale that up, you end up winning nationally.
33:43But decision helps you do that. It helps make all of those little pieces, whether it's just adding
33:49up pricing or trying to understand what LLPAs qualify for different scenarios, it can do that
33:56too. So it's incredibly powerful. I don't know that it entirely replaces systems as much as it
34:02supports all of those little things that systems don't do for you today. They don't do custom
34:07screens. They don't do custom little features. And you're working with your vendor to try and make
34:10those little tweaks that you need to happen. You try to make them happen. And right now,
34:15you're either waiting in line for them or you're doing them behind the scenes with another system
34:19or maybe multiple systems. And I think this is where decision lives and really helps make
34:23all those things that have you pulling your hair out that are off on the side and seem like just
34:28incredibly loud noise. It quiets the noise and it helps you fight through those things and get
34:32through them in a way that's auditable, it's consistent, and it can be applied, like I said,
34:37across systems, which is just, it's wonderful to have that reusability.
34:41And I'll add, if you're trying to replace a PPE with this, that's more of the same problem
34:48I'm always trying to shake up because then that puts you in a box and you're only using sapiens to
34:53try and use it like a PPE would. The largest banks love this based on speed alone and they can't
35:00rave enough about it. They use it for fraud and they use it for, so it doesn't just stop at where
35:05the PPE would. They use it on their portfolio overnight, every night, on everything you heard
35:10today plus any conditions that might make it move to a different pool. I think when you try and use
35:18this to replace a PPE, the possibilities get closed in. This should be, because you don't need to send
35:25it over the wall to a coder, it should make the impossible possible now and put the power in your
35:31subject matter expert's hands. Yeah, that telephone game from subject matter expert to
35:36requirements analyst to developer to tester back, like that all disappears. And it's really nice to
35:42live in a world where you don't have to have those translations that don't turn out how you expected
35:47them to when you first gave the requirements, right? So being able to do that is a big deal.
35:51And to your point, like Mike, it's not just pricing, right? It can be used anywhere, whether it's
35:56income calculation, looking at all the different data elements from an appraisal to see if it's a
36:01valid appraisal. I mean, it can be used in so many different ways that it's hard to even
36:04wrap your head around it. But can it be used in pricing based on my six years in pricing,
36:11running pricing? Yeah, absolutely.
36:15So you guys mentioned a lot of things that I would think would be extremely appealing, but I have a
36:21question just to get real with you guys. How big of a team do you need to manage the rules and
36:29decision software? It sounds like it's capable of so much. Am I going to need a whole department to
36:35manage this? What's the uplift? That's a great question. I'll let James dive in specifically to
36:40pricing, but I'll tell you a cool story. We just came back from Chase and they have, I believe,
36:47300,000 employees, let's say 14,000 square feet of office space, like 130,000 square feet of office
36:57space. Yet they only have three people that run Sapiens Decisioning and you can come to them.
37:02And then every 14 days it comes out exactly like they promised it to everybody. So that shows that
37:09your team doesn't, it's more about, can the subject matter experts show up to help you create more
37:16logic from my experience. What about yours, James? Yeah, I think that's exactly it. Right. So just
37:21having those subject matter experts, we talked about it being business friendly. So it's,
37:24it's an interface that regular business users, SMEs can use that they, I mean, they're using other
37:28things today, whether it's Word or Excel or whatever format they're using to put requirements towards a
37:34requirements analyst or whatever to get them to IT. All of that is, to me, more complicated,
37:40less specific. It's more ambiguous than, than the tool that, that is Sapiens Decision. So like I
37:46talked about, it's not, it's not another system. It's a different system. And like I said, I think
37:51it's, it's a better system and it doesn't require, it doesn't require you doing more work than you're
37:56doing today. You're just doing it slightly differently. And I would, like I said, I would say
37:59better, smarter. Okay. But how long is it going to take to implement? So better, smarter, better
38:07decisions, capable of touching more than one place of my business workflow. What, what, what does time
38:14look like from implementation? I mean, it depends on how much you're doing, right? That's the, that's
38:20the, the consultant answer, right? It depends. But I mean, to Mike's point, like he, he talked about
38:25earlier, it's going to cost, would you say, take twice as long and cost four times more than you
38:28expected. And I, and I feel like my experience with decision has been, um, I'm trying to rack my
38:35brain. I can't think of a time that we missed a deadline. Um, we're usually, if we're working
38:39with an IT project, it is the short tent, a short pole in the tent, right? We're going to be done
38:43in plenty of time by the time, you know, requirements are done. If we're going through requirements,
38:48we're writing the requirements out in the tool as people are doing requirements for the rest of the
38:52system. And for the most part, we're able to, to have something that either the SMEs have built
38:58themselves or somebody who helped them build alongside, uh, built that and has it done well
39:04ahead of being able to test the rest of the systems. It's not, it's, if you're building anything with
39:09other support, um, it will be the short pole intent. It'll be done quickly. Uh, if you're, if you're doing
39:16it independently by yourself, like if you're that SME that's making changes to your rules or putting in new
39:20rules, um, like I talked about, it takes me longer to think about what I want to do than how to build
39:27it. So once I know basically what I want to do, the building part is not the hard part. Uh, neither
39:31is the testing because the built-in tester, it's the figuring out what you want to do. And Mike,
39:36you touched on it. Like, don't put this thing in a box because there's way more to it. And because
39:40it's so powerful, just, it's almost like saying, well, what can you do with Excel? Like a ton,
39:46like how crazy do you want to get? Um, I say that, but I also would tell you that
39:51the power of decision for what it's used for, I think it's more powerful. And I think it's simpler,
39:56um, in terms of the structure of because of the structure, it's simpler. And I mean,
40:00there's a whole book on the structure, but I won't get into that, but, um, I actually have the book
40:04here, but, uh, I just think it's an incredibly powerful tool and to try and limit it or put it in
40:09a box, uh, is, is not just shortchanging the tool, but it's shortchanging yourself if you decide to
40:14invest in it. And to be crystal clear twice as long, four times expensive is when you have to
40:20hard code. So that doesn't apply to this. And in fact, Justin Patterson, who is anytime you jump on
40:27a demo with me, he's on there and he is just the best to listen to. And he talks many stories about
40:33how once his company, which was a top hundred IMB understood this, the head of product and credit,
40:42anytime they had a new program would go to Justin to build it in this, to make sure everything was
40:48taken care of. And that was 14 days. So within 14 days, any new product would be in production.
40:54And by day 10, they knew sort of how it was going to be and knew on day 14 was going to come out
41:01exactly how they wanted. And it would hit all those layers. It could surface in the LOS. It could surface
41:07up channel to your CRM. It allows all the people involved in the new product to be able to interact
41:15with those business decisions versus being locked in, obviously in siloed. So 14 days, but if you want
41:23like an AUS, it's going to take six to eight months, but anything that you want to solve that's happening
41:28today, should it be on 14 day sprints? So I have a question from the audience for you all about
41:39integrations. Do you integrate with Encompass through an API?
41:48So you can integrate with any API. So if you're a lender and you have the ability to have the API,
41:57then you can begin to build it out. If your CRM has an API they're willing to give you,
42:04you have a logic layer that you write all of this out and like Figma, or as you saw the decision tree
42:13that you would understand, and then it exports in the code needed so that you can connect. And that's
42:19where we help as well is making sure that you tell us what the API needs to look like, and we can go
42:26ahead and connect. And all of the major vendors, I would say, in mortgage, judging by the clientele
42:33we have, we do integrate in some way or in every way.
42:40So to reiterate to our audience, anyone who might have a specific question about that integration
42:47piece, it sounds like a very simple, if you have API access, you can integrate. Is that an incorrect
42:54statement? That's, that's correct. That's all. And so if you can, if you can make API calls and
43:02accept their responses, we'll be in pretty good shape. There we go. All right. And my next question
43:09is, oh, how come I haven't heard of sapiens before?
43:14I like this one. I could jump in on this one. So typically when a vendor enters the market,
43:22there's like three different cohorts, I think in the mortgage industry. And then there's the big
43:27media blitz. And we are entering that space, especially via the non-QM. But the majority of
43:37those clients that you heard are larger banks and GSEs, and they are in a different area than you
43:44would hear at most conferences. So I think that's why you haven't heard of it yet. But this is really
43:50the coming out webinar. And here we are moment. And I know it's going to change. I'm going to be
43:57talking a lot about it. And I think it's much more impactful, though, when you hear somebody that's
44:02used it for six years at a large size lender like James. I think it's going to start to resonate.
44:07And all it takes, you know, this all it takes, Alison, like four or five to fall in love with it
44:14at the IMB level, you know, go to a couple housing wire conferences and it catches fire. And I have no
44:19doubt it's going to. All right, guys, we are rapidly approaching the end of the hour. I'm going to turn
44:27things over to Mark for closing statements. And then we will wrap up today's content.
44:34Thanks, Alison. And thanks to our panelists. And thanks to the audience for tuning in today and
44:39finding out more about Sapien's decision. So we're going to be at the MBA Secondary and Capital
44:43Markets event in New York City in May. If you'd like to meet with us, Mike will be there. And last point,
44:50this webinar will be on the Housing Wire site as well as the Sapien's website. So again,
44:56thanks for joining us and so long for now. Thank you all for joining us. We'll see you again soon.