Financial Wellness Today - Episode 4

I mean, I remember I’ve been in the mortgage industry now for 23, 24 years right now. So I’ve gone through the highs and the lows. And what I realize in this business is that business is either great or it’s bad. It doesn’t seem like there’s a middle ground with this industry. And I think the problem today isn’t even necessarily the interest rates, because I remember back in the day when interest rates got down to six.

I was like, this is the perfect interest rate right now, right at six percent. Then it dropped to five, then it dropped to four, then it dropped to three. You know, even though seven isn’t a horrible rate, the problem today is mostly inventory. You know, I talk to agents all over the country right now and I keep hearing the same story over and over again, even though the better ones are still doing business. You know, the question is, I talked to an agent the other day and she was telling me that she just sold one of her clients houses.

But the client has no place to go. Right. So the house is sold. Now, what is she’s going to do? She’s going to end up probably having to rent something until they actually find a house to buy.

And then you’re overpaying for the houses. Because of the inventory shortage. So, you know, it’s like a catch 22. But, you know, our job is to try and make it that much easier for people out there. Yep.

Between everything that we’re doing and making sure that they have all the right advice to be able to purchase that next time. Yeah, look, again, just to frame, you know, our conversation for today. Right. So in your you’re absolutely right. And when you talk about the interest rate, six percent is not a bad interest rate.

I mean, all it all it comes down to is, you know, when we’re talking about financial wellness, at the same time, we’re one point one seven trillion in credit card debt. At the same time, you know, rent has gone up for people. So that situation that you just brought up, that’s not attractive either to sell and then have to rent at the amount of money that rent has gone up now. And now you have utilities have gone up. And this is why, again, Landmark Day in the hopes that.

Introducing Josh Fluman of Home Approach

You know, this new administration is our president is going to work on some of these things that are really challenging Americans in the area of financial wellness. So that’s what the show is about. That’s what the work that we do is about. And that’s why we bring on special guests like our guests today. And there are no better time to introduce him today.

We have Josh Fluman of Home Approach. Josh, how are you doing today? Doing great, Gordy. Thanks for having me. Yeah, man.

Before we get into the home approach, because, again, Randy and I led the show with here, there’s an awful lot to talk about. And we kind of all work together to help the consumer, right, to help the consumer, whether they are able to get approved for a mortgage today or they need some work or some help with that. Or they are ready to buy, but the industry has been challenging. Because inventories, you know, there’s not a lot of homes statistically up for sale for the need. The interest rate has scared consumers because they got kind of used to the lower interest rates, which typically got you a bigger house with a payment.

Once the rate goes up, then you’re looking for a little bit of a smaller house to kind of meet the amount that you can afford. So all of that said, let’s talk about Home Approach. And let me just start asking, like, what made you get involved in housing and create the Home Approach? Great question. So, yeah, I kind of backed into this project a little bit.

I’ve been in performance marketing since 2008. Performance marketing is basically just a sector of digital marketing based around customer acquisition, tracking results for clients and brands. And basically, I just realized that lead generation and the marketing industry online has, you know, had some challenges in terms of, you know, basically providing the best support to people or at least, you know, looking like, you know, it’s a mission where you’re trying to support people. Usually, it’s a very financially motivated industry where, you know, people are looking to make as much money as possible, not really necessarily looking to provide the best customer experience to consumers that are looking for the support they need. That’s a very generous way of saying that, by the way.

That’s the reason why they have HUD-certified counseling agencies like Cambridge Credit Counseling that when a 62-year-old or older needs to take equity out of their home, they need to speak to an independent HUD agency to get certified that they understand the pros and cons, which is because, you know, loan officers a lot of the times are more motivated by the commission check than they are about actually helping people, which we’ve been talking for a while. It’s one of the reasons Randy and I work together. It’s one of the reasons you and I work together is because we are totally about the consumer interest, right? How can we help consumers across the rainbow of financial services and things that would lead them to being financially well? Exactly.

Education and the path to homeownership

It starts with, I think, education. You know, that’s the big thing. Initially, when I was doing market research, the big thing that kept coming up was whether you were able to get pre-approved or not or you needed more support. Just a general kind of lack of education, but also just where to go, who to talk to. How do I start this process of trying to make the leap from renter to homeowner to get on the path to achieving the American dream?

It’s like, where do I start? That seemed like the main issue across the board, whether you’re more needing financial support to become mortgage-ready or you are mortgage-ready and you’re actually ready to go out and look for a home. Just where does it all start? Is there a certain order of things to put yourself in the best position? That was basically how the project started.

Full disclosure, even though I partner with Cambridge and I partner with Hero Benefits Network, Randy’s organization, I’m very mission-based in terms of what I’m trying to achieve here. At Home Approach, I came across a fascinating statistic a couple years ago that a homeowner, their net worth is 40 times greater than that of a renter. Independent of interest rates and all the challenges circling the mortgage industry, I think it’s still in everyone’s best interest to achieve that goal to put them on the best financial footing moving forward. That’s the whole basis for the project, aligning with the right companies who are mission-based. Of course, my company is not a non-profit.

We thought that there could be a good way to actually help consumers but also eke out a profit eventually, but doing it the right way, having first and foremost the consumer’s best interest at heart. Look, there’s nothing wrong with having an entrepreneurial mindset and have a non-profit spirit. Again, you’re leading with education, which education comes with a cost and doesn’t typically have a return other than the gratifying work of making sure that people, when they get into the home, they’re prepared. They’re prepared to be a homeowner. A lot of times, even in the work that we do on our Mortgage Ready Program, which is where people can’t get approved and they need to do some work to get to being underwritten.

Sometimes, it’s a blessing that they’re not getting underwritten because while they’re doing the work that our HUD-certified coaches do with them, they’re learning about all of the responsibilities of being a homeowner. How to prepare for costs like when you need a new roof? What’s the life of your roof going to be and what’s going to cost and plan for it when you’re going to need to get that roof? That planning can’t come when you need it. It should be coming way before that.

Debt to income and housing budget percentages

It all revolves around the education piece, Gordon, and that’s kind of why we do what we’re doing right now to try and educate the consumer out there on all the different things that are available to them. I’m going to put you guys in the spot. I’d like both of you to answer. When it comes to a person planning to buy a home, what percentage of their income is the maximum amount that someone should have percentage-wise taken from their income for a mortgage payment? In the mortgage industry, we use a calculator to develop their debt-to-income ratio.

The ideal debt-to-income ratio in the mortgage industry for a conventional loan is going to be give or take around 40% or less. That’s the ideal situation. There are other programs out there, FHA programs and things like that, that you can go a little bit higher on your DTI. You have a lower down payment. You have more of a mortgage, but the ideal situation is to try and be below 40%.

Well, the reason I ask that is because, getting back to the reason we do the show, and again, some loan officers that are commission-based and commission-minded, it’s important in planning that people know what they should be etching out from that budget for housing. When we do bankruptcy counseling, as an example, the recommended housing percentage of income is 28%. That’s housing across the board. That’s not just housing. That’s insurance.

That’s all expenses, not utilities, but insurance and escrow and all the things of their income. When we’re teaching people, when they have to go through bankruptcy counseling, we’re teaching them how to get back on the path of trying not to let that happen again, whether it was because of medical or whatever the reason is, but it’s also to set a benchmark. When we do budgeting with people, we see a lot of times when it’s higher than that, 28%, 30%, things are starting to happen that are a little problematic because so much is going to just housing. Yeah. When you’re looking at somebody’s, just to clarify a little bit, yeah, your housing expenses definitely should be somewhere in the mid to high 20s at the most.

The rest of it has to do with your credit card debt, your car payments. That’s why when we calculate somebody’s DTI, we mix in their new housing payment along with all of their current debt that shows up on their credit report. Now, again, you always have to take into consideration any outside debt that you might have that doesn’t show up on your credit report. That’s not always shared with a loan officer. Understood.

Unless the loan officer is smart enough and good enough at what they do to ask the right questions. It’s very, very important not just to try and get the mortgage done, but to make sure you give the right advice. And this is why, again, this is the reason for the show, Josh. And having you on as a guest in times like this, just so important to continue to have people know that there are resources that truly have that intent of education and helping people be successful when they become that homeowner. And even just that statistic you brought up about people that own a home and what their, what was it, the investment percentage, what was it that you had said?

The net worth of a homeowner is 40 times that greater than a renter. Right. I mean, it’s a big investment. It’s a major asset. And the more that work that we can do together to try to get people prepared for it when they’re ready or when there’s life changes involved, there’s not enough that we can do.

We have to keep talking about it. We have to keep bringing up things. Yeah, no, exactly, Gordy. And I was going to say, it seems like no two families or households have the same situation. Like everybody has their own financial struggles or financial nuances that require really talking to an expert, like Randy said, that asks the right questions and that where you can understand the full picture to make an accurate recommendation for somebody.

Yeah. And, you know, this conversation when people listen to the show, what’s so exciting about it is at least they know now, like they can come to us for whatever piece or stage that is needed because they’re going to get information that’s coming from trusted professionals. We’re talking about it on this show to expose the opportunity to work with people that have their financial best interest at heart. Yeah, there’s no there’s no question about that, Gordy. I mean, I’ve been working with Josh now for a couple of years and, you know, I’m lucky enough to have him as a co-worker and to be able to build some of our products and services behind home approach, you know, because the services that we provide are just going to save the consumer that much more money.

You know, we partner with the best of the best in the mortgage industry. We make sure that the real estate agents that are working with home approach clients are the best of the best that are out there. And then on top of that, having them take advantage of the down payment assistance that we offer through our hero program and the actual perks that we can offer through perk plans from real estate to travel to entertainment just to help them cut back their their monthly expenses on things that they’re buying all the time. It just makes. Being able to afford a home that much more affordable.

FHA loans and down payment assistance programs

Yeah, so for our listeners, Josh, again, home approach dot com is the website looking on the website. One of the loan type spotlights you do is FHA loans. Do you want to talk a little bit about this is a good example of what we’re trying to educate people on? Yeah, you know, FHA specifically is a great loan option because, you know, you don’t need as good of a FICO score. You know, typically you could have a 500 to 579 FICO score to get to only have to put down a 10 percent down payment.

But if your FICO score is greater than that 580, that shoots down to three point five. And it also allows for a greater debt to income ratio than would typically be required. So it’s a lot more, I guess, flexible than a conventional mortgage for people that, you know, do qualify for it. So I think it’s just a great loan type to be knowledgeable about because it’s. Yeah, it could be very beneficial.

I again, I’m not in the mortgage industry and I don’t. There’s a lot of things I’m not privy to or that I don’t keep track of. I know there’s been a lot of work, too, when people can’t come up with a down payment. You know, 80 percent of the house. If you don’t own 80 percent, you have to pay insurance.

Until you get to 80 percent ownership. Are there programs out there that help with that, too? Yeah. You know, there’s there’s so many programs out there. And that’s that’s one thing that, you know, I’m still learning about as I try to take this program to the next level with you guys, with my other partners.

And a lot of those programs come down to location. So, for example, you know, in my research, I came across a bank. They’re more regional. They’re called City National Bank, but they offer a special program. Of course, you know, they’re a bank, so you need to get the loan underwrited with them.

But they’re they’re eligible. They this ladder up program that they offer is people are eligible in the tri-state area. Also parts of New Jersey and I believe Los Angeles, which is really interesting, you know, with everything that’s that’s going on there. But the bank offers a grant of twenty thousand dollars in the New York area. Again, it’s for certain zip codes, but there’s no PMI required for that.

There’s no there’s really no like extra, you know, there’s no like, you know, loopholes or or anything that, you know, seems like it’s, you know, where it’s predatory in any way. The one catch is you use their bank for the loan, but, you know, you don’t have to pay it back. You know, you don’t have to pay it back if you were to move or something like that. It seems like a best in class program, but it’s only offered in certain geographic locations. So, you know, based on where, you know, the consumer is and where they’re looking, there could be programs on like the local level, obviously on the state level as well that they could take advantage of.

So this is kind of like, you know, just a part of the research that really never ends because, you know, I talked to more experienced people in the mortgage industry that didn’t even know about Citi National Bank and this program that they’re offering. So and it’s interesting because like I contacted them to try to partner with them and they don’t even have marketing partners. They really just work with like, you know, referrals through realtors and things like that. So there’s just and then there’s other nonprofit organizations. There’s a nonprofit called NACA.

com that stands for the neighborhood. One second. I always forget about that. You want to talk about the worst acronym person on the planet you’re looking at right now. I could never, ever remember them.

Right. It’s yeah, it’s crazy. Yeah, it’s crazy. And even on their website, they don’t even spell it out. It’s just it’s just, you know, it’s just NACA on their site.

In any event, you know. Easy enough to remember, right? Yeah, exactly. But they offer below market fixed rates. 25 for a 15 year fixed.

So they have their own like, you know, basically network of underwriters that I guess, you know, they’re a nonprofit. So they just come up with this funding to basically, I guess, you know, come up with lower rates, you know, for their program. But it’s just like, you know, a couple of years into this project. And I’m still just getting started in terms of like trying to understand and navigate just all these programs that are available, you know, to the consumer at the end of the day. So, you know, my main goal as I, you know, build the website is really just to make sure I could provide the consumer with just all these programs and just educate them on what they might be eligible for.

Because like I said, no two persons situation is exactly the same. And there’s certainly like a lot more information out there that is readily publicly available, I’d say, or at least you need to dig to find it, which is challenging for most people. Yeah, so I went to the legal page just so I could help us figure out what the acronym is. And it’s Neighborhood Assistance Corporation of America. Thank you.

Home approach survey and lead process

Yeah, that’s the one. So, Josh, I have a couple of questions for you. Yeah, please, Randy. So you start at home approach. What’s the process that somebody needs to go through in order to find out what they qualify for, how to apply?

What’s the actual process that you put people through? So we put them through a survey. It’s like roughly 10 questions about their situation. Ask them, obviously, their personal information. And then from there, what their credit score is.

Do they have a realtor? How much are they looking to put down? Just all the general questions, actually, that you helped me out with, Randy, to figure out, you know, as a loan officer or a mortgage professional, what you would need to know just at a high level to help guide people the right way. So this way, when the loan officer gets the leave from home approach, they already have some basic questions that are already answered on their side. So it makes the transition and asking the questions going forward to make sure they’re pre-approved that much easier.

Exactly. And one thing I wanted to add is that, you know, the digital marketing lead generation part of the industry is going through significant changes now. A week from today, actually, January 27th, the FCC, I believe it is, is bringing the new one-to-one consent rules in effect. So that just really requires you to be very, very, you know, transparent about where, who the leads are going to. And it should be only going to one company, you know, for support.

So this is something that I’ve known has been looming for a while in the industry. So, you know, for our mortgage survey, Randy, we’re working exclusively with Cross Country Mortgage for these leads, who’s obviously, you know, the number one retail lender, one of the best mortgage companies in the country. We’re working with them very closely to make sure that, you know, they have the information that’s being filled out in the survey available. So when, you know, they contact the consumer, they can have a very, you know, fluid conversation and really help guide the consumer to understand what they qualify for. And if even they’re mortgage ready, you know, obviously Cross Country has, they work with FHA, they work with all these different loan types that are available.

So I think at any given time, there’s probably like a 90% chance or above that they could help you with a certain loan type. But then if they can’t, that’s where we connect them with Cambridge Credit Counseling Corp, Forty’s company to get them on the track to become mortgage ready. So that’s what I was going to ask you. What happens if somebody fills out your survey? And one of the questions is, talk to me a little about your credit.

Somebody comes back and says, my credit’s poor. What would be the next step as far as that goes? So from them, you know, we’re it’s funny, we’re actually, you know, finalizing this right now as we talk today on this podcast episode. But we’re, we’re coming up just with the best, most friction free way to bring bring that consumer in to fill out an application with Credit Cambridge Counseling to, you know, get the help they need. So basically, just, you know, cross country talks to them.

You know, they understand their unique situation if they qualify for a mortgage today. But if they don’t, like, for example, I think 500, if their credit score is 500 or less, which is like, you know, very poor, then they would need, you know, just other programs such as credit counseling, or debt consolidation services to become mortgage ready. So that’s, that’s a smooth transition just from the conversation with cross country, them understanding if you would qualify for a mortgage today, and if not, just basically giving them a link to that’s dedicated to our efforts to sign up with cross country to get to basically let them take over the conversation and to educate the consumer about the financial wellness programs that they can take advantage of through Cambridge to eventually become a mortgage ready. And then make their way back to cross country when they are. I’d like to just pipe in about the mortgage ready program.

Mortgage ready program and credit counseling

And this is why for our listeners, the spirit of the show, the reason we get together with experts like you, Josh, that we’re working through a process, the credit repair industry as a whole is for the most part, not very helpful. Number one, number two, loan officers and realtors, and this is not a stigma, it’s just I talked to them, and it’s even self admission, that when someone can’t get approved, it could take a couple of months of doing some work to get there, it could take six months, it could take a couple of years if it’s debt to income issues. So the platform that we use for the mortgage ready program is called credit valve, and it basically has Freddie Mac’s underwriting guidelines built into it. So when someone gets denied, the person’s referred to Cambridge, and then our HUD certified counselors use that platform to work with the consumer on things that they’re going to improve and they meet on a monthly basis. And in the software, it actually communicates with the loan officer or the realtor, the milestones that the consumer is making inclusive of once they get to the underwriting milestone and the average timeframe when it’s basic credit score or, you know, collection accounts that might need to be handled, whatever that looks like the average timeframe is four to six months of actually being able to deliver them back mortgage ready.

So it’s an incredible program because it gives the consumer opportunity to get coached consistently to do things that are going to make them prove not actually go backwards. Sometimes consumers do things when they don’t get approved that they think are going to help and they could actually end up setting them back even further. So that program is incredible. It really does take care of the underserved, if you will, people that need some education and some guidance. And like I said, in the onset of the show today, the key of the whole program is we’re educating people so that when they actually do get underwritten, they’re ready and prepared with a game plan.

Yeah, Gordy, if I can just add on to what you were saying, sometimes it’s not the only thing just to get approved for the mortgage, because there’s reasons that people’s individuals credit scores can be low. Some of it is situational. Some of it is things they have no control over. Some of it is that they’re just not educated on how to get their scores higher. So just because somebody has a 550 or 600 or 650 credit score doesn’t mean that they’re educated enough to still know what they need to do in order to get their scores into the 700s.

And by doing that, which you’re also doing in most cases is even reducing the amount of debt that you might have in revolving debt through your credit cards and different things like that. So just because you have an approval for a mortgage doesn’t mean that you shouldn’t get the counseling that you’re going to need in order to understand what your new monthly expenses are going to be, because you can’t just think you’re going to buy a house and you’re going to have a mortgage payment and homeowners insurance and you’re going to have to pay your gas and electric. You’re going to have repairs on a house. You’re going to have all these different things that pop up in a split second that you’re not even aware of that you have to have the money for to fix, whether you need a new roof, whether you need a new hot water heater, whether you should be working with a warranty company and what warranty companies to work with. And these are the things that you need to be able to ask the experts about to make sure that you’re hooked up with the right companies.

And look, again, I was excited every time we do the show, because look at the three of us, what we’re talking about today. What are our intentions? Educating consumers, helping them be prepared, helping them in their path towards financial wellness when they have one of the biggest investments of their life that they once they take it on. I say this all the time. OK, so when you rent, you’re pretty much throwing that money out the window just to have housing.

But when you own, you own it. And that means you own everything inclusive of the repairs, the taxes, everything else that has to be taken care of. So it’s bringing people like us that want people to just do well for themselves. Right. Not just selling.

And it’s not we don’t treat a lead like it’s a lead. We treat people and we have conversations with them to try to figure out how to get them in the best place possible. I don’t know how many loans you’ve written across your lifetime, Randy, but you’ve gained so much experience. And Josh, you said it yourself. Not every family is the same.

Partnership mission and closing remarks

Not every loan is has the same purpose as another one does or eligibility. All of those things being said, it’s overwhelming for people. So when we can bring ourselves together to have this kind of dialogue on a weekly basis and have an expert like you, Josh, that this project home approach. And when I first met you telling me about the why, it is because you want people to be successful and you want them to be educated and you want them you want to help the housing industry by doing that. Yeah, the smart thing that Josh did.

I said one of the smart things that you did was, first of all, partnering with with our group because and I’m not saying that, you know, in a different type of a way to make people understand that we’re the best group that’s out there. But the one thing that I’ve learned in the industry is real estate agents and loan officers are just a commodity. There are thousands of us out there trying to get one deal. What makes one loan officer or one real estate agent different from the other loan officer or real estate agents is trying to get the same business. And that’s kind of why we, you know, or I develop Hero Benefits Network, which, you know, we give our heroes anyone from three to ten thousand dollars that they can spend wherever they want to.

And then at the same time, Perk Plans, which can save them money on a lot of things that they’re buying for their home, whether they’re traveling, whether they’re buying tickets to a sporting event, health and wellness products and services. But just making sure that we have the right products and services to differentiate ourselves from all the other people out there trying to do exactly the same thing. There is a difference. Yeah, customer service is huge. You know, taking care of people first and foremost, establishing trust, building a relationship, I think is paramount to every industry.

And really just the most important thing at the end of the day. So, yeah, you know, I’m very humbled. You know, you keep referring me to me as an expert, Gordy. And, you know, my expertise is really in online marketing and marketing partnerships. And I know where I’m weak and don’t have as much expertise.

And that’s why I sought out professionals like you two to partner with so that I have a dream team, you know, support with my website. And so I can help people, you know, really the best way possible. Because, you know, I’ve always felt so lucky in my lifetime. Admittedly, you know, come from a upper middle class, you know, upbringing, never really had to worry too much. But now it’s like fast forward, you know, I have a young family and I’ve been pretty successful in my own right at what I’ve, you know, been doing in my digital marketing career.

And I just saw an opportunity really to just, yeah, try to help people predominantly that are less fortunate. Of course, you know, everybody could use the education to make the right moves to achieve the American dream to get to get their home, whether, you know, it’s almost like beside the point, you know, if they can qualify for a mortgage today or they can’t. But, you know, just really trying to serve people who need the help, you know, drives me and really, you know, brings a smile to my face. So that’s really all I’m looking to do. And you guys have been very instrumental so far in helping me with that.

So I’m very grateful and we’re just getting started. Look, we’re just about out of time. I want to just make one thing clear and why I speak to you as an expert, because I have been with Cambridge Collectively for 20 years. And marketing is one of our challenges as a nonprofit, because we do not have a $3 million a month budget to be on the airwaves and we’re national. I have dealt with marketers that have great intentions.

I have dealt with marketers that have the worst intentions. And for me to be invested in working with you, I know where your intentions are. You want to help people just like we do. And that’s an expertise in and of itself, if you ask me. That’s why I want to surround my people, myself with people like you and Randy, because I trust you.

I know we can help a lot of people together. And with your marketing expertise, it’ll help us be out there and available so people know where to turn if they need any of the things that we do to try to help them with financial wellness. Thanks, Gordy. You know, we’re so aligned on the mission here, all three of us. And yeah, I really appreciate the time today.

You know, like I said, we’re just getting started on this project, but definitely have made a lot of progress and can’t wait to see where it goes here in 2025 and in the future. Yeah, it’s been a lot of fun so far. Yeah, and we’d love to have you on quarterly. The mortgage industry is ever changing. You’re constantly developing what you’re doing.

So we’d love to have you back just so we can continue where we’re leaving off here. Absolutely. Come back anytime. I’m learning so much from you guys and through this project in general. And yeah, I can’t wait to just track progress all together and we’ll hit some fun milestones together.

And yeah, that’d be great to come back just as we accomplish things together. That’d be fun. Awesome. com. You fill out a very simple application and someone will contact you to start working with you on your journey.

And as you mentioned, there’s about a 10-question quiz on there that will help frame what you’re looking for. com and then someone will contact you. Randy, before we wrap up, where can people find PERC Plans? com. That’s P-E-R-C-P-L-A-N-S.

You’ll have to register first and then we can always set up a demo. org and find out if you qualify for our down payment assistance or relocation grants. Awesome. And for anybody that would like to speak with me or if you’re interested in doing a debt counseling session, if you have some high interest rate credit card debt or you know you’re not able to get approved for a mortgage and you want to take a look at the Mortgage Ready Program, you can call 888-544-3457. com.

With that said, this is episode number four of Financial Wellness Today. We’ll see you next week. See you, Gordon. See you, Josh. See you, Josh.

Bye, Randy. You did it.