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Saturday Cup of Joe: a lending and tech(ish) newsletter from Detroit

Saturday Cup of Joe #151.

Friends & Colleagues,

Week 151. Another jam packed and productive week in Detroit. There’s so much going on in our industry, technology and in Detroit. On Wednesday, President Trump issued a memo directing Treasury and HUD to develop reports on housing finance reform. While the memo did not actually do anything other than bring attention and momentum to the issue, it points to a Fannie Mae & Freddie Mac that look different in size and structure to those organizations today. As “disruptors” continue to find real estate finance and the mortgage industry, there are a lot of changes all at once. Lenders are trying to innovate and update decades-old technology. Regulators are trying to find a long(er) term stable solution to the housing market. Post financial crisis has been relatively stable but there are a few remnants of those laws that either don’t offer an end date (i.e. FHFA conservatorship of Fannie & Freddie) or expire in 2021 making mortgage access an issue (i.e. parts of the Qualified Mortgage rule).

On Friday, I took the day off and spent the first day of spring break with my daughter. Pancakes, trampolines and ice cream. The trampolines before the ice cream. It was a fun day and I’m really glad we did it. I had to fit in a few calls here and there, a bit to her (proper) chagrin. Overall though it was a great day and our first ever visit to a trampoline park.

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One entrepreneur once told me that everything breaks each time you triple the size of your company. Centralized infrastructure like HR, Legal and technology break. Culture is strained. This week, I came across another article that discusses the difficulty in growing to 50 employees. And why? The growth and expansion challenges what you have. Whether at the tripling or at 50, the point is that leaders must be focused on how to respond.

Centralize and be transparent. At the very least, create a single truth for rules, processes, guidelines, and FAQs. Make sure everyone has access to those documents. Then be transparent about why you’re doing things the way you do them. This isn’t just about rules; it’s also about the company’s overall philosophy.

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“Wheresoever you go, go with all your heart.” — Confucius

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Potter Box: There is a thing called Potter Box. For obvious reason, I was curious. The link came from my Dad, even more appropriate (!), and tackles difficult ethical decisions.

The Potter Box is a model for making ethical decisions, developed by Ralph B. Potter, Jr., professor of social ethics emeritus at Harvard Divinity School. It is commonly used by communication ethics scholars. According to this model, moral thinking should be a systematic process and how we come to decisions must be based in some reasoning.

The Potter Box uses four dimensions of moral analysis to help in situations where ethical dilemmas occur: Facts, Values, Principles, and Loyalties. The Potter Box consists of a few simple steps, which can be completed in any order. You may also move between the steps several times before an adequate decision is made. The steps are numbered for simplicity’s sake, and it may help you to organize the steps into quadrants. Consider the 4 quadrants through questions.

Interesting find. Haven’t tried it yet.

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NextBelt: Just one person’s experience but an interesting narrative in the larger shift (would we call it a trend?) to explore smaller, secondary cities as Oakland, Seattle and Brooklyn become too big and too expensive. SF, Boston and Manhattan were already there. Austin and Los Angeles came on strong of late. It’s not clear to me that LA is any cheaper than the Bay Area but if it is, it won’t be for long. Given the ease in accessing high speed Internet and airports, why wouldn’t Cedar Rapids, Iowa be an option?

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According to this robocall article in Wired, “By the end of this year, according to First Orion, a maker of caller ID and call-blocking software, nearly half of all telephone traffic in the US will be spam calls.” !!!

It makes the article about TripAdvisor’s experience even more limited. One company digging into one robocall “kingpin,” doesn’t even serve to scratch the surface of the problem. If you consider it a problem. The bottom line is our phones ring throughout the day from local and far flung zip codes. The most annoying part for me has been missing a legitimate call from time to time assuming it was a robocall. Other than that, it’s just missed calls.

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Planes, Trains and Automobiles: This author decided to evaluate his train trip, Detroit to Raleigh, instead of taking a direct flight. “…the price is about the same, really. The kicker here is that where the airplane takes four hours, the trip by train clocks in at 23 hours and 18 minutes, according to Amtrak’s website, though I seem to recall that my particular trip, with a layover in Washington, D.C., took about 26 hours total.” As if more analysis is needed, try this on.

“If your goal is to get yourself into a metal tube with people possibly willing to go bonkers, then it looks like a train may be your better bet, if you’re willing to put in the time to wait it out.”

Ha. Who wouldn’t want that? #StoriesOnStories

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Late nights are dicey: Drunk regrets in a technology age. You think it would be videos and pics that shouldn’t be shared…and while I’m sure that’s a large part of it, drunk shopping is apparently a $45B market segment. Have you found yourself with receipts or emails that you had to review the next day? Were these good purchases? A friend once adopted a starving child in Africa while drunk late at night. As far as I know he maintained the donation and carried on with it beyond.

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Always listen to experts. They’ll tell you what can’t be done and why. Then do it.”

- ROBERT HEINLEIN

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Millennials now old enough to have a generational issue with Gen Z. Will this spark the Gen Z articles? Key question — does Gen Z like avocado toast? Unclear. What is clear, according to Morgan Stanley, is that Millennials and Gen Z share values and perspective on economic issues like jobs. Mobility. Flexibility. The purpose of work.

Photo by Barry McGee on Unsplash

Interesting insights in there for anyone marketing to or hiring/recruiting this cohort. Thanks to honorary Millennial Bill Weber of Connecticut who’s life long learning is an inspiration to keep this silly Saturday morning project going.

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Housing Trends: The Exurbs are a thing again…this time in the greater Phoenix metro area. What is the farthest commute you’ve had in your career? How do you view it now? Are Exurbs actually “burbs” anymore? I think more and more these communities are becoming self-sufficient in that it isn’t necessary to commute into the nearby city to live and work there. For instance, how many of these newcomers are traveling into downtown Phoenix each day? How many are working remotely or for other suburban companies?

This is the type of housing formation and economic trends that I try to tie back into the housing finance industry. What do you keep an eye on? What do you think of the Exurbs?

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5 Ways to Become More Creative and Free Your Mind

1. Create your OWN definition of creativity

2. Rebel against the real evil in the world

3. Never stop reinventing yourself

4. Reshape the stories you’re telling yourself

5. Realize that the world needs you

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Crazy prediction: To me, seeing a headline this week that the NFL had approved pass interference as a reviewable call is the beginning of the end. I know that sounds crazy given how popular and powerful the NFL is today but reactive changes to the core product is never a strong move by any company. If you imagine the quality of the game is the product, this rule change represents fear, reaction and sensitivity. Generally, consumers recognize this weakness. The deterioration of the product. It might be a small give, but it’s the beginning of the end.

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Today’s Thought: “We’re all in this together.” The courage to acknowledge it and live it out is another story, but the point stands. This week Ryan Holiday wrote, “Where we are all flawed and imperfect. Where we treat other people’s point of view as charitably as we treat our own. Where we are civilized and respectful and, above all, kind to each other — particularly the less fortunate, the mistaken, and the afraid.” We can do this. We can have this. It doesn’t feel that way when you turn on the TV or read the news, but read THIS. We can do this. We’re all in this together.

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Quote: “Our greatest glory is not in never falling, but in rising every time we fall.” — Confucius

Bonus content: Obscure plaques across the country…what’s not to like?

Continued success and continue to answer well,

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