Payments Dialog: Payments in the Digital Mortgage Experience (A conversation with BeSmartee)

On this episode of Payments Dialog, we are joined by Tim Nguyen, co-founder and CEO of BeSmartee, who tells us how his organization is leveraging payments as one way to help improve the customer experience and make mortgages easier, faster, more transparent for both consumers and lenders.

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Want to learn more about how Spreedly can help your organization adapt and grow your payments? Reach out to us here.

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Rough transcript of this Payments Dialog:

Peter Mollins:

Hi everybody. This is Peter Mollins. Just really, really excited to have another Payments Dialog and very excited to have you all here. Today we've really have a great pleasure of having Tim Nguyen, who's the co-founder and CEO of BeSmartee. Really excited to have a conversation about payments in the mortgage space. So Tim, welcome to Payments Dialog.

Tim Nguyen:

Thank you, Peter. Thanks for having me on.

Peter Mollins:

Excellent. Well, love to start off, BeSmartee is doing some really interesting things in the mortgage space around payments. So I'd love to hear your story and BeSmartee's story if you don't mind.

Tim Nguyen:

Yeah, absolutely. So BeSmartee is really a story and a company founded on passion. Back in 2007, about a year before the housing or the financial crisis that we had globally, we got bombarded by customers and consumers and borrowers, and they all had one common theme. They were frustrated at their mortgage process. Some of them were going to lose their homes. They didn't know what a negative amortization mortgage is. Just bad stories, people getting in bad financial situations.

Tim Nguyen:

It was at that time when I was in the back end of the business, it made me curious about the front end of the business. How are loans originated? How are they priced? How does that secondary market work? And as I learned more about it, I just thought to myself, there just had to be a better way. So the better way was what we call BeSmartee.

Tim Nguyen:

So our vision from the very, very beginning was to make mortgages easier, faster, more transparent for both consumers and lenders. Because we need the consumers to have a good experience, right? We need it to be easy and we needed it to be transparent. We believe firmly as a consumer if you have the right information, you can make the right decision for your financial life. And we want to give the originators, the lenders, the same tool set so they can deliver on that promise to bridge that gap.

Peter Mollins:

That's great. And how about yourself? Your background as far as mortgages go and how you came to launch BeSmartee. It'd be interested to hear that story.

Tim Nguyen:

Yeah. I think I'll give you that answer in two parts. The first is I went to school for computer programming. I was one of those kids that my dad put a computer, it was a 386 at the time. I was about five years old, six years old, broke it and learned how to fix it. So that was my first foray into computers and fell in love with computers.

Tim Nguyen:

Wanted to originally be a game designer. Realized I didn't really want to do that anymore when I started learning more about it, went to school at UCI down here in Southern California. But that got me into technology, right? So I got a good foundation from UCI a couple years there. But I dropped out of school and fast forward, I dropped out of school to get into mortgages. Mortgages was booming at the time, made a home for myself in the back end of the mortgage business. Think appraisal, title, notary services, those type of backend services.

Tim Nguyen:

So like I said earlier, right at the same time in 2007, a company called New Century went under. They were the largest wholesale lender in the country and that was the catalyst for a domino effect of hundreds of lenders going out of business, which led ultimately to the financial crisis. So we thought there just had to be a better way. I was driven and passionate about fixing the problem. We put together a business plan. We recruited management team, got first clients onboarded. Wire framed the whole solution, couldn't raise a dime of funding.

Tim Nguyen:

So we put that on hold, went back to focus on the core business and never let the dream alive. I think that's one of the most important things here is you believe in something, you never let it go. So for us, we did what we did and luckily I was able to sell that company in 2014. We didn't need venture capital anymore. Seeded the company. So from about 2014 to 2016, basically wrote every single line of code. And that's how BeSmartee today got started.

Tim Nguyen:

We kept the dream alive. When we were ready we went right back at. And what's really interesting about that is when we restarted BeSmartee in 2014, the original business plan, the original strategy, and approach, and wire frames were still all applicable. It was a really good head start. We dive right into it and finally went to market in 2016.

Peter Mollins:

That's great. So as you're thinking about BeSmartee and the mortgage space, payments obviously is every month or twice a month. Many people have that mortgage payment come through. How important is payments to the mortgage space and to how you think about the mortgage space?

Tim Nguyen:

So the payments actually come, not from the monthly servicing of the debt. Where we integrate Spreedly is we use it on the front end origination side. We typically use it in three different categories. For some lenders will charge you for a credit report in order to proceed with an application. So we embed it there. Once you do an application, then you have the legal right to charge a borrower for an appraisal report, which is the most common form of prepayment on a loan. Or outside of closing payment. So we use that there.

Tim Nguyen:

What makes Spreedly so powerful for us is there's hundreds of what's called appraisal management companies in our space. And we have to work with many different providers on many different gateways and Spreedly helps us facilitate the most valuable payment for an originator in the mortgage process. This payment number one, has to be expedited quickly, especially if you're buying a home. You want to get that appraiser paid. You want to get the appraiser out to your property and get that appraisal back to the lender as soon as possible.

Tim Nguyen:

But it also helps on a third trudge, which is, as you go through this process, sometimes you might need to do another appraisal. Sometimes you might have to pay for something else, or sometimes you might want to receive back a refund. So our integration with Spreedly allows us to really handle all of the pre-closing fees that a consumer typically will pay in a mortgage cycle.

Peter Mollins:

Got it. So let me let see if I understand. So you're dealing with hundreds of different appraisers and different service providers and each of them has their own gateway probably or set of gateways. And so in order to be able to connect with them, to get those payments over to them, you need to make sure that you're connecting to their gateway of choice.

Tim Nguyen:

Exactly, exactly.

Peter Mollins:

That's great. So now let's dive into that a little bit more. One of the things that you'd mentioned about that, about why there's value there is speed of payment. So that's got to be important for your customers, is the idea of being able to keep that mortgage, the front side of that mortgage moving quickly through the approval process?

Tim Nguyen:

Yeah, absolutely. It's not just the speed of payment for the consumers' benefit, but also the lender's benefit and the appraiser's benefit as well. But from a consumer perspective, you're looking to buy your dream home. You're looking to lock in the rate, the rate's going to expire. Well, first off you got to be able to pay for that appraisal. It's got to be easy. It's got to be embedded into an interface that you started with. Which is a BeSmartee point of sale system.

Tim Nguyen:

Number two, for the originators that has to be easily tracked. There's a lot of compliance. You have to prove timing because you can't charge for an appraisal until a certain time in the process. So all these things have to be wrapped up into not only the BeSmartee POS, but then we got to move that data downstream. For example, to the lender's loan origination system. That's, what auditors will look at when they get audited and believe me, they get audited every single month, especially if you're in 50 states.

Tim Nguyen:

Then the appraiser, they got to get paid. They're not going to drive out 30 minutes and do a bunch of pre-work unless they know they're going to get paid and the deal's solid and block out your calendar. So this will help expedite all that. So they can get out there, do the work, get it back. So you can buy that dream home. Or lock in that rate and not lose the extension.

Peter Mollins:

That's great. Now, another thing that occurred to me is you'd mentioned when you started you were writing the code yourself, and I got to imagine that writing connections to dozens or hundreds of different appraisers and their respective gateways was not something that you relished doing.

Tim Nguyen:

No, not at all. The mortgage industry, a lot of people don't know, but it's heavily driven off of integrations. Think about one mortgage, just the appraiser, the credit company, the audit company, the QC, the docs, the AUS and pricing and fees. There's just tons. So to that end, we have over a hundred, I think, 35 integrations to pull off what we pull off. One of them being Spreedly. So we already maintain enough mortgage integrations, the last thing we needed to do is to worry about 20 different gateways from 20 different providers.

Peter Mollins:

That's great. So yeah, I mean, exactly. Keep your development team focused on other things that can provide additional value to your end customers.

Tim Nguyen:

That's right. Yeah. Because we all understand credit cards, but it's not our expertise. Our expertise is mortgage, mortgage data, the process compliance and the legal connotations with it all.

Peter Mollins:

Right. That's great. So where do you see the future of the mortgage space going and BeSmartee's role in it? What does the future hold?

Tim Nguyen:

So I'm really excited because our [inaudible 00:09:39] here, our vision is to get to a seven day mortgage close across the US. That's the fastest, legally number of days you can actually close a mortgage without getting into any compliance issues.

Tim Nguyen:

So there's a lot of guidelines and rules you have to follow to protect the consumer. And part of that is time, you got to give people time to read documents and understand documents and pursue that information. So for us, it's about taking... We can automate about three days off the cycle times right now in about 15 minutes. We're trying to get that automate the entire seven day process to make it easier for consumers to get into a mortgage, to understand the mortgage.

Tim Nguyen:

Our belief and philosophy is the easier the process, the more you can ask yourself and think through the most important questions. How will this impact my life? Can I really afford that payment? Should I afford that payment? Do I really want to live here? And then for the originators, it's the same thing. The more we can take off their plate, we make them more valuable because then they become more like trusted advisors. Then our originator clients become a relationship. They can understand the problem they're trying to solve, understand the situation to help guide that consumer into the right financial instrument.

Peter Mollins:

Yeah. It sounds like across the board for originators, BeSmartee's making it easier so that they're taking a lot of that heavy lift off their shoulders so they can focus on the higher value activities. I guess kind of the way Speedly's helping with taking the lift of those integrations to the payment gateways off your shoulders. So you can focus on achieving that [inaudible 00:11:21] even faster.

Tim Nguyen:

Yeah, absolutely. I mean just like Spreedly, I think for originators as well, they don't need to spend hours keying in data and clicking send and submit to these various systems. That could be automated. What they need to focus in on is analyzing the data, telling the story, helping them get through underwriting and closing that loan on time.

Peter Mollins:

Yeah. That's great. So one of the things I'd love to hear from you as we kind of move into the conclusion here is obviously you've had experience with, at least starting two companies. What advice would you give to entrepreneurs that are looking to start their own business?

Tim Nguyen:

Oh gosh. The first thing I would say is believe in yourself, never give up. If you don't believe in yourself, who will? But the next thing I would say is surround yourself with really amazing people. Focus on the culture, focus on what you stand for, what you're really trying to achieve. Know your numbers, even go so far as to surround yourself with other CEOs and entrepreneurs.

Tim Nguyen:

One of the big defining moments in my time was when I joined early on my career, I was... Gosh, the company was in tens of millions of revenue. I was in my mid twenties and I thought I knew everything. I walked into a CEO group and I realized very quickly there was a lot I didn't know. People that ran companies a hundred times bigger. People that on a third generation of a company.

Tim Nguyen:

So I surrounded myself with people that have been there, done that and listened and I learned, and that was a really good catalyst. Just really learn from others. Never stop learning. Always question yourself, always question your methodologies. Don't fight the last war, so to speak. What worked yesterday may not work tomorrow. Every moment is independent of itself sometimes.

Peter Mollins:

Yeah. That's great advice. Well, Tim, I really enjoyed this chance to hear more about your story and about BeSmartee and how you're helping to reshape the origination side of the mortgage business. So thanks so much for taking the time to chat.

Tim Nguyen:

My pleasure, Peter. Thank you for everything you guys do at Spreedly. We really love the product and I enjoy the relationship.

Peter Mollins:

That's wonderful. Thanks so much, Tim.

Tim Nguyen:

Bye-bye.

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