Stoffers: Industry Faces ‘Enormous Strategic Decisions’ to Shape Future

DETROIT–This is a city experiencing a rebirth. Which is why, said Mortgage Bankers Association Vice Chairman Brian Stoffers, CMB, Detroit is the perfect city to host the MBA Technology Solutions Conference & Expo.

“Tough Cheap and Real, Detroit is Cool Again,” proclaims National Geographic. “America’s Comeback City: The Rebirth of Detroit,” declares Forbes. And, pun intended, “The Quickening of a Reborn Detroit,” a not-so-subtle homage to Quicken Loans, whose charismatic founder and CEO, Dan Gilbert, has played a major role in the city’s renaissance.

“I couldn’t think of a better town than the rebuilt American City of Detroit to have this conference,” Stoffers said here. “Why? Because it was innovation and technology solutions that restored this once broken ‘motor’ city.”

Stoffers, division president with CBRE Capital, Los Angeles, observed that he, like many in the industry, think about technology very differently in our personal lives than in our professional lives.

“I personally rely on the latest smart phone technology to communicate with my office, our clients and business partners, but also my family,” Stoffers said. “When a new iPhone comes out, I’m likely an early purchaser because I want to tell my adult kids that their Dad embraces the latest technology. I also want to be most efficient in using this devise in my business life.”

But like many MBA members, Stoffers noted, “I am much more conservative when it comes to upgrading technology for my company. We don’t just jump at the first new technology that comes our way. We’re strategic, thoughtful, deliberate and sometimes slow to make a decision.”

More than a decade ago, CBRE started experimenting with software services in an attempt to organize both its pipelines and the “massive amounts of data” collected on commercial and multifamily developments it financed around the globe.

“We weren’t sure where to begin and went down quite a few rabbit holes with very limited results,” Stoffers said. “Looking back now, I wish we had a little more direction, a little more insight into selecting the services and partners that best fit our strategies. We learned a lot along the way–what not to do, but also what to do. But most importantly, we didn’t give up and we kept moving forward.”

Stoffers acknowledged many MBA members struggle with how to take that first step or in what direction. Additionally, many don’t have the financial resources larger companies have. Nonetheless, he noted MBA and industry leaders have been urging its members to invest in technology or run the risk of becoming obsolete.

“Why? Because many of our borrowers are demanding instant online gratification just like our kids on Instagram,” Stoffers said..

Looking ahead, Stoffers said, businesses will continue to evolve, and with increasing velocity, the speed of technological change will increase. In the commercial space, for example, market changes fueled by technology are “fascinating, but also challenging,” especially since technology moves faster than the average duration of fixed-rate loan.

“We have enormous strategic decisions to make, which will shape our future,” Stoffers said. “The impact of technology disruptors and the financial implications they have on our decisions is incredible…Technology helps us be more efficient and effective with our very limited time in a fast-paced business world.”

For example, at CBRE’s Houston office, offices have been redesigned through use of technology. Called CBRE 360, it uses a “free address” format.

“We’ve combined five offices into three, have capacity for 20 percent more staff, but nearly 25 percent less office space,” Stoffers said. “And yet, employee production and satisfaction has increased as a result. Every work station uses ‘elevator desks’ and auto connects to a phone system that moves to any desk you choose. I no longer have an assigned desk, yet over 12 work environments will accommodate anything I need to accomplish in a given day.”

The space also has many green and sustainable elements. “As part of the process of moving, over 7.5 million document pages were shredded, while only 250,000 were scanned,” Stoffers said. “A contest was held for the oldest document on file–it was from 1969.”

From a residential perspective, Stoffers said the industry has already seeing dramatic impacts to the home buying process thanks to technology disruptors and increased consumer demand for a faster, easier online experience.

“Homebuyers want more efficient, instant home buying information, but they still want in-person assistance as well,” Stoffers said. “Technology has given homebuyers the ability to be as self-sufficient as they would like. They can even bypass traditional realtors using sites like Zillow and Redfin.”

Here in Detroit, the announcement of Rocket Mortgage “completely changed the mortgage lending landscape forever by appealing to consumers’ appetite for online gratification,” Stoffers noted. “And this product turbocharged the desire for every other lender to better serve their customers.”

The Rocket Mortgage development also exposed another dilemma the industry faces: inaction.

“Information overload paralyzes many companies to the point that they simply avoid making fintech decisions that could boost their businesses into the future,” Stoffers said. “Inaction is exacerbated by cyber security fears that we seem to be reading about daily in the rapidly changing digital world–Facebook, and an endless stream of data breaches at many companies around the country–just to name a few.”

Some CEOs would rather not implement change for fear of making an expensive mistake, Stoffers noted. “Personally, I believe the winners will be those who are able to combine both the human and technology elements in the most seamless and efficient way,” he said. “Even with the latest and greatest technology at our fingertips, this business is still personal–whether we are talking about investing in someone’s business through commercial lending or helping someone find a home for their family. So instead of being paralyzed by fear of making the wrong decision, let’s look at these issues through the lens of opportunity.”

As the government considers new charters for fintech lenders, we need to ensure that these charters are fair and available to everyone, Stoffers said. “For instance, we need consistency across the states for online, remote notary,” he said. “We must encourage state and federal regulators to resist the urge for overly prescriptive or contradictory cybersecurity requirements, as was the case with the New York Department of Financial Services Cybersecurity regulations until MBA advocated for significant revisions.”

Companies may do business in all 50 states, Stoffers said, “but we can’t have a different technology infrastructure for each state. Rather, we should have one technology infrastructure which can be used across geographies. So it only makes sense to have consistent and reliable policies across all states.”

Stoffers emphasized MBA points to issues requiring immediate attention of regulators such as the modernization of the regulatory framework, barriers to innovation, issues of regulatory arbitrage and prioritization of agency resources as well as the need for authoritative guidance to improve the consumer experience. “We need agencies to think a little differently too, understanding the unintended consequences of blocking this vital information which could impede the home closing process,” he said.

Stoffers said lenders shouldn’t be afraid to stumble along the way.

“Sometimes it’s two steps forward and one step back–but it’s progress,” Stoffers said. “Figure out the best path for your company, chart your future and make it happen. Failure is not an option, but neither is inaction.”