About Curtis Wood
Curtis Wood is from Jacksonville, Florida. He is CEO & Co-founder of Bee Mortgage App, a mobile app for the mobile generation, with an end-to-end mobile mortgage experience, from shopping through closing. Curtis considers himself a Purpose Driven Capitalist.
“The wealth gap is the biggest crisis of our generation. If you’ve got a dream and a goal, go after it. We should live in a country that lets you do that, and we do.” - Curtis Wood
Website: https://www.beemortgageapp.com/
LinkedIn: https://www.linkedin.com/company/beemortgageapp
Website: Rewire, Inc.: Transformed Thinking
Email: grow@rewireinc.com
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Welcome everybody to this episode of the show. This one is exciting. This one is a little bit different. When I saw Curtis on our schedule, it automatically got my entrepreneur juices flowing. This one's going to be fun. I've got the Founder and CEO of Bee Mortgage, Curtis Wood. Curtis, welcome to the show.
Thank you for having me. It's a pleasure to be here.
I'm excited because Bee is the true definition of a startup. There are a lot of our readers that founded their mortgage company or started their gig somewhere along the way. We also have a lot of readers that are thinking about doing something like that. You're in the midst of doing it. From an excitement level, I'm there and people are going to benefit. I’m happy to have you here.
The first question out of the box is probably going to be one that you don't expect. It has nothing to do with business. At Rewire, we’re mindset coaches. We like to get our brains in the right arena facing in a certain direction right from the get-go. I'm going to ask you a question. As you wake up, who comes to mind that you're grateful for?
It’s my wife and business partner, Cynthia.
Give us 1 line or 2 about Cynthia.
I’m going to try and do this without crying. She's wonderful. We started Bee because we wanted to work together. That was one of the things. I was working for a big Fortune 100 bank. It was a great job and had great benefits but I was gone. I worked for 7, 8 or 10 hours a day sometimes. This was pre-COVID so there was no remote working. You had to travel 30 to 45 minutes to go to an office.
A startup was best for our marriage DNA. Honestly, I'm a born entrepreneur. When I was working for the bank, it was a high-rise building. I was stuck in a cubicle hole and I wanted to jump out the window. Half of me is a mortgage guy. I love mortgages. Especially for a first-time buyer, it's an exciting experience. Mortgages are very repetitious. They're stuck in an old way of thinking. The other half of me is a born entrepreneur. I need to be going 90 miles an hour with my hair on fire. When you're running a startup or pretty much any business, it doesn't have to be FinTech or mortgages, you're constantly running and trying to start it up. You’re trying to keep your head above water.
The mortgage industry has not taken a great leap forward in mobile advancement because the tech stack doesn’t exist to power it.
I don't mean to make our guests feel like they want to cry right from the get-go but I appreciate your authenticity and willingness to go there, especially because you didn't know that was coming. Thank you for that. Tell us a little bit about what you're doing with Bee Mortgage. In researching for this interview, I went to your website and looked at what you're doing. I got to tell you. It looks intriguing but how would you describe what exactly Bee Mortgage is and what you all are doing?
Bee is a mortgage app, which is like Uber for the mortgage industry. It uses the latest technology such as smart contracts, AI and OCR to process 1003 loan application data instead of a human loan officer and a processor. This technology allows you to interface entirely with your phone. Our app also allows you to get a mortgage without having to speak to a human. You can do it anytime, anywhere.
One of the reasons why the mortgage industry has not taken a great leap forward in terms of mobile advancement with technology is because the tech stack doesn't exist to power it. That's what we're building. Bee is a point of sale and a hybrid LOS all in one. It’s a unified tech stack. It takes data commands from the app instead of a loan officer sitting at their desk, working on their LOS.
If you think about the mortgage market, the total real estate sales were ten trillion or something along those lines. It’s big. It's one of the last markets that has not had its iPhone moment yet like buying stocks with Robinhood, buying cars with Carvana and Fair or banking with Chime. The generation that's buying homes the dominant buying force in the market is all mobile users. They're on mobile apps for about every other part of their lives except for the mortgage transaction. That's what our aim is right there.
Coming from the mortgage industry myself, I've got 48 questions based on what you said. I'm not going to ask you all 48 but some of the first ones that come to mind are when you say to get a mortgage on your phone and understood that the mortgage industry maybe hasn't had its cellphone moment yet. Maybe some people might think, “Rocket has been doing certain things for a long time.”
Give me the difference between what is happening. Technology has come a long way even in the mortgage market over the last couple of years versus when I started in the mid-‘90s. It has come a long way. Give me the specific differences between what's happening versus what one will be able to do with Bee.
When's the last time you documented Rocket Mortgage’s pre-approval process if you ever have?
I get it where it's marketing. I understand that. I get where you're going.
Mortgage Industry: The mortgage customer journey is still very non-mobile. Even if they have a digital lending suite, it will not equate to a mobile mortgage use experience.
It's very much a non-mobile customer journey. It’s phone calls. You deal with the loan officer. It's non-mobile in an age where young first-time home buyers are doing everything else in a mobile app. They're not talking to a stockbroker when they buy a stock through Robinhood. They're not talking to a taxi dispatcher when they order a ride with Uber. The customer journey is still very non-mobile. It doesn't matter who the lender is.
Even if they have a digital lending suite, digital lending does not equal a mobile mortgage user experience. There are very popular digital lenders. I have nothing against them. A lot of them have returned a ton of value to their shareholders. I applaud them but this is the natural evolution of the industry and the way it works. Digital lending does not equal a mobile mortgage user experience.
The reason why is you can't have a mobile mortgage user experience until you eliminate the need for a loan officer to process a loan application and a processor to be the interface and clear conditions in processing. There are several different advantages that a mobile app has us do, which is different than a web application that you have with a digital lender.
A quick background on myself, I was in mortgage lending since ‘14 or ‘15. Before that, I worked for a company that built mobile apps. They would white label these mobile apps for major brands like Home Depot or Neiman Marcus. They were very big brands. My job was to configure the app for the client's specific needs. I somewhat cannibalized myself. I was hired as a consultant for that but after that, I shifted over to mortgages.
In ‘14 and ‘15, this was back when mobile apps were exploding. I very quickly realized that number one, a loan officer's job is extremely repetitious. It’s the same thing over and over again. That was one of the things that drove me nuts. I can't handle that. You're stuck in a cube. You do the same thing over and over again. It is a great job and I have a lot of respect for those professionals. It's just not in my DNA.
I was also getting a lot of questions from customers asking if they could do this on their phone and whether they have built a mobile app. As a Fortune 100 company, they've got the money to do it. I asked my bosses if we had a mobile app. This is about the same time Rocket Mortgage rolled theirs out. When Rocket came out, the industry collectively held its breath to see if a major player is moving into the mortgage. One of the signs we know that the industry was not disrupted by a mobile app was because you didn't see a flood of competitors coming into the market releasing their mobile apps to compete with them.
When I asked senior executives, “Do we have a mortgage app? Are we building one?” It was a no. There was no interest. Partly the reason why is they don't want to cannibalize themselves. That's understandable. We're all, at the end of the day, self-interest capitalists. We have families to support or whatever your goals are. There were two reasons why they didn't believe a mortgage app would work. Number one, they thought that the mortgage process was too complex to be compartmentalized down into a mobile app. At some point, a borrower would want to speak with a loan officer. They would have too many questions. The second reason why is that the technology was not configured to run a mortgage app.
Since we launched Bee, we got connected with a leading Florida bank. They are federally chartered but headquartered in Jacksonville, which is close to where we're from. They attempted to take a LOS and point of sale and configure it for a mortgage mobile app. They stopped after twelve months of trying. This is a bank and because of the configuration of roadblocks that they were running into, they have to throw everything out and start all over again.
Disruption happens when the industry stagnates, and one moron with a brilliant idea comes along to prove that change can work.
When blockchain was the buzzword in late ‘17, I started to research what a smart contract did. A smart contract operates very similarly to how a loan officer does. It intakes data, decisions it against a set coded protocol and renders a decision no matter what that is. It's a 1 or 0. It’s black or white. If you think about what a loan officer does, they intake pre-approval data. The core components are your credit score, income and assets. They then simply tell you if you're pre-approved or not.
Your credit score, for Fannie, is 620 or higher. There are no gray areas there. That was my light bulb moment. I realized a smart contract could replace me as a loan officer. At that point, I started to poke around in the industry. I asked our people in our IT department, “Are you doing anything with blockchain?” They hadn't even heard of it. I have a very good friend who works for Black Knight and they had never heard of it. If Black Knight hadn't heard of it, then we're pretty early. For the few who had, they thought it was bitcoin but crypto is a function of blockchain.
The way Bee started is I fell into a blockchain rabbit hole and the implications on the user experience for the mortgage customer. I went home and talked to my wife. She's a technologist even more so than I am. I'm a dumb mortgage guy. That's about where my short runway ends. She started to look into it and we realized we were early.
Through our startup ventures, we got connected with a Senior Vice President at Wells Fargo. We started talking to him. He believes in the blockchain. Why is Wells Fargo doing something with it? There are two reasons. It’s like turning the Titanic and it would never clear all the divisions. These people are self-interested. I don't blame them. They’re a family sport. This innovation stagnation in an industry is the cause of the disruption. When an industry stagnates, nothing has changed and then some moron with an idea, like me, comes along and proves that it can work.
What percentage of the mortgage market would be readily applicable for an organization like Bee? If I heard you right, it takes the loan officer and the processor out of the scenario. The goal is to be 100% virtual on your phone. There's got to be a segment of the market that's perfect for and probably not. What do you expect that is?
Here's where we honestly get fuzzy. We have not launched yet. We are targeting first-time buyers because of the increased mobile adoption rates among young people. They're just on their phones. They’re native. Gen Z is the first digitally native generation. These are my kids. The point is that they are digitally ingrained in their DNA. It's there. That's our target. We feel like we're going to have the greatest adoption rates.
However, when we pitch this to Gen X-ers and even returning home buyers that are Millennials, they look at it and are like, “This would be great. I hate dealing with the loan officer. I know exactly what kind of mortgage I want. I don't need any help. If I could do this on my phone without somebody calling me, I would love to do it.” Our stated target for strategic reasons is young people. However, based on our market research so far, we believe we're going to catch a lot of returning buyers to the market who are looking for a faster, simpler and easier way to do it.
Why the name Bee? I'm intrigued by that.
Mortgage Industry: You cannot have a mobile mortgage user experience until you eliminate the need for a loan officer to process an application and a processor to clear conditions in processing.
I liked it. It's very quick. It’s easy to remember. From the importance strategy and branding standpoint, bees are so important to the earth’s ecosystem. We'd all die without them. We believe affordable home ownership is important to the American family. Our goal is to use technology to lower the cost threshold of getting a mortgage.
I agree with Ray Dalio. He said that the wealth gap is the biggest crisis of our generation. It's true. I'm a big free market guy though. If you've got a dream and a goal, go after it. We should live in a country that lets us do that and we do. I'm very thankful for that. I’m constantly telling our kids, “Hit the genetic lottery. It’s important here. Be thankful. We shouldn’t complain.”
I'm a branding guy. Bee is easy. When we searched through the trademark database, nobody had it. Nobody had filed. Another company did have it in one of the classes that we wanted to file in but they were out of business so we acquired their old mark. From a marketing standpoint, Bee has got some thick marketing legs.
Going in a different direction here, I've seen the term connected to your name of purpose-driven capitalists. What does that mean to you?
That means that we need to do more than just take $1 and turn it into $2. We can scorch the earth. Not to knock private equity but those guys take a pound of flesh. This is the free market we live in. My belief and thankfully, we've got aligned with a lot of people in the organization to believe this way, is number one, you're not going to take any of it with you. I want to feel good about what we're doing. The wealth gap is a major problem but how do you address that?
Wealth creation in America for most people starts with home ownership. It's the foundation. How can we use technology? This goes back to our B2C strategy. If we were to give this technology to big banks, they would use it to improve their bottom line. We have a bottom line to think about. Our goal is to return value to shareholders.
A purpose-driven capitalist to me means that we are going to use new technology and craft a business strategy that not only benefits the people at the top end of the spectrum. They want a low rate too. We can't discriminate with the Dodd-Frank respo and all this other stuff but we can craft this so that our stated business strategy intentionally elevates the ones that are getting left behind.
The five-member family living paycheck to paycheck can take a tax return and afford a two-one house in the hood or a very bad part of town. What they need is a home that suits their needs. That's what we're after. Something that we are developing is a pay-it-forward program. I cannot get into the details because there's no way for us to protect this. It's going to be whoever does it first. We are taking a specific portion of our revenue and it’s going to be funneled to the people who are getting left behind. They don't have to use Bee. We don't care.
Wealth creation in America starts with homeownership.
We believe that home ownership elevation across the board is going to contribute to more peaceful communities, less crime, more happiness and better families. If you think about it, there's one thing that cuts through every single political, racial, gender or any kind of divisive issue in our society and that's home ownership. Everybody wants to own a home and start somewhere. It's the American dream. It's why most people come here. It's what most people who are born here take for granted. This is where their dreams come true.
At the end of the day, we all want a place where we know we're accepted and loved. You go out to the world and you're constantly attacked for whatever you believe but when you get home, that's peace and where you know you're loved. We want to help families get to that point. If we do one thing right, it's going to be helping the lower income and disenfranchised families that through every single recession, whether it be ‘08, COVID or no matter what it is, that wealth gap for them gets wider. Their ability to go to improve the class that they're in that starts with home ownership to build wealth for their family dwindles.
I can feel your passion when you talk about that. I asked one question and you got animated about that. I can feel the passion for what you're trying to achieve with your company and for helping people that may not otherwise be helped. As you were describing home, I've made that personal to myself. We go out in this world, whether we're engaging in a business, commerce or whatever it is and then go home. It is an exhale place where you expect to be accepted for who you are and what you are. You’re able to exhale and relax. I appreciate that. For somebody who starts something up or found something, that's your passion. I can feel it. Thank you for that.
In ’08, I lost my shirt. I was one of the people who were fully committed. It was the best lesson I ever learned.
How so?
Money is not important. You think it's important. It is important. You got to put food on the table in a home. My first company back then was number one. I worked for that company and built that company 1st and then my family was 2nd. With Bee, my family is first in a far top spot. Bee is second. At the time, it was a hard lesson but some of the best lessons you ever learn are the tough ones.
I have carried that with me into Bee. I'm not solely focused on profits. You have to make a dollar to survive. You don't have a business unless you do. I know that but we have a very unique opportunity with the technology, timing and opening that we have in the market to take something that is normally captured at the incumbent level.
Typically, the incumbents come out with new tech. We have something very exotic and that creates a very new mobile user experience. The result is that it's going to be cheaper for people to get a mortgage with to buy a home. That is going to impact not just everybody but specifically, the people who simply want to move up and want better for their families. At the end of the day, that's going to make you feel good.
Mortgage Industry: Generation X-ers and returning home buyers who are millennials welcomed the mobile app for mortgaging. They hate dealing with a loan officer and would love to do it on their phones.
What are the greatest challenges you're running up against?
We're in the middle of a funding round so it’s capitalization. We're at that point in our startup’s life cycle that's capital intensive. We've heard a lot of noes simply because this is such a unique type of tech stack. It has never been done before. We're in beta. We've proven it can be done. We have a little demo that we're sharing with investors after an NDA is in place but it's there.
We're at a good place but we've had historical challenges as anybody does. I thankfully only had to let two people go, which is remarkable for our team with all things considered. My partner, Matt Offers, is doing a fantastic job. We had a challenge with him sleeping on our couch before we went through our pre-seed round.
Explain concisely what the blockchain is. What does it mean to me?
You as a Bee customer?
No. It sounds like that's a big piece of what you're doing with Bee. I know, myself included, that a lot of my peers and clients have heard of the blockchain and understand it. NFTs and cryptos are happening and that's a use of it but explain exactly what it is and how can it impact me.
I’ll preface my description with this. We all know how electricity works. When we walk into a room, we flip a switch and the light comes on. I couldn't wire my house though. It's the result or the output of what blockchain does that you need to focus on, not the nuts and bolts. I don’t understand the nuts and bolts.
I remember in high school or college, they were teaching us all coding. I remember being able to have my name come up thousands of times on the computer screen. I remember even thinking then, “I don't want to be the person that codes but the person that benefits from the whatever.” That's what you're getting at.
We all just want a place where we are accepted and loved. That’s home.
We're all going to benefit from blockchain. It's already happening. You just don't know it. When we go to market, we're marketing a better and easier mobile mortgage experience. Blockchain is not mentioned. You won't see it because consumers don't care. They care about the user experience, which is number one, where mortgage digital lenders have gone wrong. They're trying to solve lender problems and not customer problems. Steve Jobs proved it best that the customer experience wins a day.
A smart contract is a trusted decision process. A lot of times, lenders have been hesitant to code the entire experience living within code because it is tough for them to move our trust in the loan officer to computer code. That's a big hurdle right there. Number one, if a human loan officer is still needed, you don't have a mobile mortgage because you're waiting on that loan officer to process your 1003.
We can replace the decision step that a human loan officer would do with a smart contract. You can trust a smart contract, which is another name for blockchain. Before the network processes the command, the data is encrypted and then it's processed. It’s the same encryption you use for mobile banking. When you buy stuff on Amazon, everything's very similar. It's encryption standard.
We'll take a DU approval. Once those 3 or 4 files were run through DU, if you get approval back, typically, that loan officer is visually looking at the approval prior to dispositioning the file on the consumer side. He will hit the button to run DU and wait for the findings to come back. They’re like, “He's approved. I can go ahead and send him out his pre-approval letter.” Even if the loan officer didn't like the borrower, he still can't change the findings.
Why is the loan officer necessary to complete that step? It is so redundant. He doesn't do anything. There are many others but I'm not getting into our secret sauce. We can transfer that step where the loan officer acts as a gatekeeper. He can't change the findings. He says, “You're approved. Here’s your pre-approval letter.” We can put that into a smart contract. A smart contract is a code. It is agnostic. The information is encrypted. It does not have any human biases. It's processing inputs and outputs. That’s it.
If I no longer need a loan officer or even a processor in processing, this translates to some very big cost savings. If I no longer need a loan officer for about 70% to 80% of my files, then I've eliminated the biggest cost for the lender. This is going to allow me to offer lower rates to the people who need it most. I'll be able to 3x my loan production if the same cost structure as every other digital lender. What I'm going to do with those cost savings, which Wells Fargo would not do, is pass those savings along in the form of lower rates and easier mortgage solutions to everyone. That includes the people who need it most.
Thank you for that explanation. I only asked 3 of my 48 questions. Maybe we’ll do a round two at some point but is there anything that I have not asked that you would like our audience to know?
I got nothing. I’m lucky to be here.
Mortgage Industry: A smart contract is a trusted decision process. Lenders are usually hesitant to code the entire experience because moving their trust from a loan officer to a computer code is tough.
This is very intriguing for us. Everything that you've said is a very different idea. It’s potentially scary for some people, especially people in the industry but any time there has been a profound disruption to any industry, it can sound scary at first. Who knows? Maybe it is years from now and this is the way you get a loan. It'll be the normal course of business. As you talk about it, it can seem a little eye-opening but very cool at the same time and exciting.
It's a lot like the 4-minute mile. Nobody thought it could be done until somebody did it. If you look at the list of the top 10 lenders, 5 of them weren’t around years ago. We have a long-term vision. We haven't put meat on the bones but it's 10, 20 and 30. We'll look at exit offers as they come but we want to take Bee public. In years, we want to be the number one dominant mortgage lender in Florida. I don't anticipate some of these dinosaurs are going to be around then.
That’s scary and exciting all at the same time. I wish you the best of luck. I can tell you that, especially after talking with you, I'll be watching, keeping a very close eye on what's happening and cheerleading you all from the sidelines. If people want to reach you, how do they do that?
They can email me at Curtis@BeeMortgageApp.com.
Thank you so much for your time. I'm excited about what you all are doing. I wish you the best.
Thank you, Jason. Take care.
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What a good interview with Curtis Wood there. Some of the insights that I walked away with was the idea that he is trying to disrupt an industry and thinking big. He reminded me how to think big and what happens when you think big. I got to know his answers and the passion that he had around the answers of increasing home ownership for those that sometimes have a hard time getting to the point where they are homeowners, his pay-it-forward program and feeling safe at home.
This idea of the bigger picture and the passion that he had around him left a mark on me. Things that I'm walking away from the interview and the insights that I'm having, I'm appreciative of that. As we say at the end of every episode, it doesn't much matter what my thoughts or insights are but reader, what were your insights that you walked away with?