Kurt Strandson: Hypervolatile is going to be the new status quo.
Thuan Nguyen: During the bad times, you don’t need to make a lot of money, but you make tons of money during the refinance wave.
Matt Sexton (Interviewer): Hello again, and welcome to the latest edition of MPA TV. I’m Matt Sexton, mortgage journalist here with Mortgage Professional America. Today, we continue our Broker Intel series, featuring discussions with top mortgage professionals across the United States on the most important mortgage topics of the day. I’m honored to be joined by our guests on this edition of MPA TV. We have Kurt Strandson, president and CEO of Pinnacle Mortgage Corporation, and Thuan Nguyen, founder of Loan Factory. Gentlemen, thank you so much for joining us today on MPA TV.
Kurt Strandson: Thanks for having us.
Thuan Nguyen: Thank you, Matt, for having me.
Matt Sexton (Interviewer): It’s been a few weeks since we’ve recorded an episode of MPA TV, so it’s a good time to revisit the state of the market. Obviously, we just had the Fed announcement yesterday, so it’s fresh in everybody’s mind as we sit here and record this. We’ll start with Kurt on this one. As you look at the overall market and how things are for you, what would you say is the state of the market? How have things changed since spring and summer as we head into late fall?
Kurt Strandson: Yeah, I think the best way to describe the market is hypervolatile. You don’t know what’s coming. I was at a couple of conferences in the spring, and nine major industry economists had predicted a half-percent rate drop by the second half of this year. We saw pretty close to the opposite in the last few weeks. With all the geopolitical things going on and the domestic conflict and chaos, I don’t think that environment is going to change anytime soon. You’ve got elections in November. If the Democrats take the House and/or the Senate, you’re probably going to see impeachment hearings for a couple of years, and it’s just going to continue to be chaotic. So I think hypervolatile is going to be the new status quo.
Matt Sexton (Interviewer): Thuan, your thoughts?
Thuan Nguyen: Yeah, the market is getting very tough now, and I think everyone out there agrees. Most people are very pessimistic, right? Rates have hit 7%, and they might continue to go up. The momentum is going that way. Inflation is going that way. So it’s pretty bad out there right now.
Matt Sexton (Interviewer): Much has been made about the higher-for-longer rate environment that we’re in. Thuan, we’ll start with you on this one. What advice would you give to brokers out there who are trying to navigate the current rate conditions, continue doing business, and make their way through?
Thuan Nguyen: My advice is not to let market conditions affect you. Focus on becoming a better loan officer or a better broker. Focus on how you can compete against others and how you can win more clients. Focus on yourself more than market conditions because, no matter what the market conditions are, there will always be people buying and refinancing. Maybe not a lot, but there are always people doing that. When you become better and rates drop, you will stand to benefit so much. People will come to you, and you’re going to make a lot of money.
Matt Sexton (Interviewer): Kurt, your thoughts?
Kurt Strandson: Yeah, a couple of things. I’ve been doing this since 2003, so we lived through the 2007–2008 debacle and the years after that. What I did in 2008, when we saw that market, was dig into relationship building, partnership building, and growing our referral base and database. Grow your business partnerships and focus on the purchase side. The good thing is that, in some markets—I’m up in New England, and we’re in 31 states, but I live in New England—it’s still been a very strong seller’s market. That’s going to shift. There will be fewer people competing when rates rise, so you’re going to have a higher conversion rate on prequalifications and preapprovals than in years past, when you might preapprove someone, but they’re bidding against 25 other people. That shift is a long time coming. It’s good for homebuyers, and they’re not going to be stuck paying way over asking price or being boxed out of the market because they can’t afford to go over asking with appraisal gaps and things like that. The other thing is, with this rate environment, we don’t look too far into the past, but if you look back to 2023 and 2024, we’d be doing cartwheels for these rates. Rates were in the high sevens, and I think October 2023 was into the eights. We’re still well below that. So yes, it’s an increase from what we’ve seen in the recent past, since the beginning of the year when rates were in the high fives. But when you look at it from that perspective, we still wrote a lot of loans in 2023 and 2024. There’s always going to be business out there.
Matt Sexton (Interviewer): Last month, we had a focus at MPA on broker education and training. Kurt, we’ll start with you on this one. What would you tell brokers about education and training? Is there one area where you think brokers could be stronger when it comes to knowledge of the business?
Kurt Strandson: Absolutely. We were just out at UWM with 65 people last week, and we appreciate their partnership. They’re always pushing forward with new information, and the focus is on technology and AI. I think if you’re not learning, training, and adapting, you’re going to get left behind. That’s not just for loan officers; it’s also for real estate agents. You have to be informed and educated about those tools, how you can use them, and how they can complement your business. Those tools are allowing you to do things much more efficiently and much quicker than what we’re used to. I look back to when I started in 2003. We were taking handwritten applications and making different copies with signatures. Now everything is so far ahead. The message for loan officers out there is not to discount or miss opportunities to learn about those systems, because you’ll need to know them. They’re going to be a bigger part of what we’re doing in the near future.
Matt Sexton (Interviewer): Thuan, your thoughts on that?
Thuan Nguyen: Yeah, I agree 100%. Technology and AI will change all of us, and we need to be ready for it. Of course, everyone wants to have the best technology and AI to help them, but not many brokers or loan officers have the ability to access and handle all of the latest technology. It’s going to be a challenging period, and I see a lot of consolidation out there. Small brokers cannot survive because they don’t have the resources or the time to upgrade their technology, adopt AI, and compete. Nowadays, you see a lot of consolidation. Many small brokers end up joining bigger brokers because it’s not only about technology. You also have overhead, licensing, compliance, audits, marketing, and so many other things that you have to manage to become better and attract more loan officers to your company. There’s so much competition out there. That’s what I’m seeing. It’s really tough for brokers and loan officers. We always have to be aware of what’s going on, keep learning, and keep improving. Choosing the Right Technology
Matt Sexton (Interviewer): You both mentioned technology, so I want to follow up on that. We’ll start with Thuan. We’re getting into convention season, and when you walk in, there are so many different new technologies out there, almost every day. When you’re looking at technology for your business or advising brokers on what they should do, how do you sort through all the new technologies to find what really works for you?
Thuan Nguyen: It’s really tough, but we need to focus on technology that can help our company. There’s so much going on out there. For me, there are two areas: the back end and the front end. Front-end technology helps you get more clients through marketing and other activities. Back-end technology helps you control your processes and operations through automation and processing. Right now, I’m focusing on the back end. I want to become better first before I go out there and promote myself. I know there are technologies that help you approach clients, call leads, and follow up with leads, but I don’t believe in those technologies yet because consumers still have reservations about AI. They don’t want to talk to AI. They’re still a little scared of AI. That’s what I see, and that’s why I don’t want to focus on the front end. I want to focus on the back end.
Matt Sexton (Interviewer): Kurt, your thoughts?
Kurt Strandson: Yeah, I think the best way to sort through all those offerings is to lean into the resources available through our trade groups. You have AIME Fuse coming up, you have VettedVA, and you have NAMB. A lot of our friendly competitors are there. You build relationships with other owners, brokers, leaders, and loan officers, and you ask them who they’re using, what they’re using, and what they’re seeing. You reality-test it with people you have relationships with and trust. It’s impossible to just trust the people behind the booths because everybody wants to sell their product. But when you ask people who are using it, or who have used it and stopped, and find out why, you can lean into those resources at gatherings and networking opportunities. That makes it a little easier to sort through.
Matt Sexton (Interviewer): That’s a great point. Absolutely. One of the big stories in mortgages over the last couple of years has been the rise of non-agency, non-QM lending. If you were speaking with a broker, Kurt, who has focused heavily on the agency side—Fannie Mae and Freddie Mac-type loans—and they were looking to pick up more business, what would be your advice as far as expanding offerings or looking at different avenues to generate business?
Kurt Strandson: It’s a great question. I think if you’re not offering those alternative products—the non-QM products, bank statement loans, and especially DSCR loans—you’re really doing a disservice to your borrowers and your business partners. With the volatility in the market over the last couple of weeks, we actually saw bank statement loans and DSCR loans pricing better than conforming, full-documentation loans. It’s a different secondary market for those products, and they move based on different factors. We moved a lot of loans that qualified for full documentation over to DSCR or bank statement loans simply to get three-eighths, and sometimes half a percent, better pricing. It was dramatic. I really think loan officers tend to stick with what they know, but you need to learn these products because they’re becoming a larger percentage of the marketplace. Even very well-qualified borrowers, specifically on the purchase side, don’t want to go through all the hoops of extra documentation, profit-and-loss statements, balance sheets, and CPA verifications for full-documentation loans. When you can simply do a DSCR or bank statement loan, it makes the transaction much more efficient and easier for them and their agent partners.
Matt Sexton (Interviewer): Thuan, your thoughts?
Thuan Nguyen: Yeah, I agree with Kurt totally. Nowadays, non-QM is a bright spot. It’s a good product. A lot of clients love it, and even loan officers like us love it too. But one thing I see is that a lot of loan officers are still very weak when it comes to understanding the guidelines. There are so many lenders offering different products with different guidelines. Therefore, we really have to take the time to understand each lender’s guidelines. At Loan Factory, we even built our own non-QM pricing engine to help loan officers find the right lender and product for their clients. A client can fit into many different products, and we need to find the best one for them. AI has advanced as well. AI can help match consumers and borrowers with the correct products and lenders. Utilizing AI is one way to help loan officers in this area. There are so many different non-QM products available, so I encourage all brokers and loan officers to focus on non-QM as well. Don’t forget it.
Matt Sexton (Interviewer): It’s amazing how non-QM has exploded and continues to be so strong as we move forward. As we get ready to wrap things up on this edition of MPA TV, I always like to end with something a little more open-ended. Thuan, we’ll start with you. As we approach the final quarter of 2026 and head into 2027, what is one positive thing you’re looking forward to? Maybe a little bit of a silver lining for people out there who’ve read the headlines and feel a little doom and gloom. What’s something we can all look forward to as we head into next year?
Thuan Nguyen: I think Kurt mentioned one positive thing: there will be a lot fewer loan officers out there, and hopefully, there will be a lot more refinancing in the future, maybe next year. That’s a very bright spot. Smart loan officers know that during the bad times, you don’t need to make a lot of money, but you make tons of money during the refinance wave. That’s what a smart loan officer does. You need to make a lot of money during the refinance wave, and in order to do that, you need to prepare for it. You need to have a strategy to capture a lot of clients. That’s my advice. That’s the bright spot I’m looking forward to. When rates drop, I’m going to be big.
Matt Sexton (Interviewer): No doubt about it. Kurt, what do you have for us?
Kurt Strandson: Yeah, I think the opportunity is going to be for those loan officers who focus on purchase business. If you stick to just refinances, you’re probably going to be a little slower. There’s going to be a lot of opportunity for those who circle back to people they may have preapproved six, 12, or 18 months ago. Prices were a little too high. They couldn’t afford something, or they were getting outbid. Circle back to those people because that’s going to change. If rates stay elevated for a period of time, you’re probably going to see prices level out in markets where they were still continuing to rise. I think at the beginning of the year, there was about a 60/40 split across the country, where 60% of markets had slightly appreciated over 12 months and 40% had slightly depreciated. You’re going to see that even out. Across the country, prices will probably level off with elevated rates. That’s going to create opportunities for homebuyers who were previously boxed out because they couldn’t make more competitive bids or didn’t have the cash and resources available. So there’s going to be a lot of opportunity on the purchase side. If you focus on building relationships with your database and business partners, dig in, and do the work, you’ll be just fine. At the end of the day, relationships are everything. Good market or bad market, if you’re building relationships, you’re setting yourself up for success down the road.
Matt Sexton (Interviewer): Gentlemen, thank you again so much for joining us on this edition of MPA TV. And thank you to everyone who watched this edition of MPA TV. For our guests, I’m Matt Sexton, saying so long. We’ll talk to you again next time.
