Rich Weidel, the CEO of family-owned and operated lender Princeton Mortgage, was scared. He saw the big competitors only getting bigger. He wondered how a smaller retail-and-wholesale shop could possibly compete with the likes of Rocket Mortgage, with massive budgets for technology and an ability to scale and expand margins. But he ran the numbers. What he found was surprising.
Weidel, who took over in 2018, sat down with HousingWire for a lengthy interview that spanned everything from competing with the big boys, to differentiators and equalizers in mortgage tech, to the benefit of being multi-channel, to the boom-and-bust cycles in mortgage, to adapting on the fly during a pandemic.
Here’s the interview, which has been edited for length and clarity:
HW: In the mortgage space, there are a lot of IPOs about to happen. As a smaller firm, what does this mean for you?
Rich Weidel: So I hold these things kind of loosely, but read about UWM going public. If I read Quicken‘s materials, if I read on loanDepot’s materials, the general pitch is technology. And so that scares me because those large companies have much larger budgets for technology. And so then one wonders, like can a little guy like us succeed or is the cake baked? Is this futile? Should we give up and accept that the market is going to consolidate? We’ll never do it. Or do we need to go raise a couple of hundred million dollars?
So I really dug into that question and I’m putting my money where my mouth is, cause we have to decide, is this worthwhile? Can we grow? If technology is truly a differentiator, I believe that you’d see that play out in two areas: a higher per-person productivity or a lower cost per funded loan. And if you accomplish either of those two things, you get a flywheel and you take off because you can either make more money to reinvest or make the same amount of money with much lower rates and you dominate the whole market.
[When Quicken went public] it was a Christmas morning for us because we get all the data. So you look at it and I surveyed people within the company and other people and said, Quicken has spent more money than probably anybody else on their technology development.