 Hello, how are you doing? Welcome to How About You Talk, Gordo the Texar. I finally remembered it. Nice. Here, please, please. Andrew, the security guy. I'm here. He forgot that. It's been so long, man. I haven't heard a show in a while. And our guest is Frank Lulaun. Frank, welcome. Welcome, Frank. Nice to have you here. How's it going? How's it going? Good to see you, brother. Thank you. Yeah, so Frank is the president and CEO of Net Lending Hawaii. We're going to talk about mortgages and mortgage fraud and all kinds of good stuff like that. Because you need to be out there getting a new mortgage, maybe, right away. Right away, because the interest rates are going to go up. Let Frank tell that story. Let Frank tell that story. So grab a chair, grab yourself a libation, please join us. Here's one. Cheers. Cheers. Happy holidays, everybody. Ah, someone put water in my water. Anyway, so UH, what's the little UH's doing? Is that little stronger in there? Oh, my goodness. Shock. Anyway, University of Hawaii football team, we predicted at the beginning of this year that the University of Hawaii football team, remember, we had, one of the puppets was on talking about it and said that McTackle was on. And he said that UH was going to kick butt this year. And they are probably going to go to a bowl game. Yeah, they were chosen last, right? Yeah, chosen last. Preseason. Preseason last. And they finished second? They finished second in their division. Not bad. Prognosticators. We don't need them. Yeah, we got it all here. At least when it comes to the UH football. That's good. Good. So anyway, Frank, we'll get a little background on you. Yeah, we'd like to let our audience know who you are. Of course. Where'd you grow up? You played football too. You didn't like, you were a small guy. Ah, high school football, high school football. Never made it to college. Ah. Yeah. Originally from Texas. Oh, right throughout. Dallas, Texas. Okay. Great state of Texas. Yeah, yeah. My exes are in Texas. Yeah, mine too. Yeah. Right from there. Yep, yep. So, so you grew up in Texas? You grew up in Texas. High school football. High school football. You know, because everybody there, like that's kind of like college ball. Yeah, that's the national pastime. Yep. Yep. In that state. And then, so you went to school there, then how'd you end up in Hawaii? Uh, moved to Hawaii for mortgage. Okay. At the tender age of 20. Okay. Wow. Yeah. Came out here back in 2004. Did you go to UT or did you go to? No, no college whatsoever. Okay, so. Yeah, right out of high school. Oh really? Right on. Yeah. Cool. Good for you. That's bold. That's bold. Yeah, that's one way to do it. Yeah. Yeah, so. And you just said, okay, I'm just going to go to Hawaii? Uh, somewhat, somewhat. I think I got a call from someone out here. Okay. Yeah, actually came out here with Vi Tata. He's the head coach of Kahuku. Okay. So, me and him ran a mortgage company, Countrywide. Okay. Back in 2000. Oh, you guys were going to Hawaii? Yeah, so we came out here. I applied for a mortgage. Oh, did you? Yeah, I got rejected. I think the whole world did. They were so hard. Yeah. Oh, yeah. You used to be test straight down here on. Bishop Street. Yeah, right, Bishop Street. So, what, did you, you knew him from before? I met him in San Diego. Okay. He did mortgages there. Okay. And then we got solicited to come out here. Wow. Two mortgages out here. And he's from here, so. Yeah, oh yeah, he's well, well known in this community. Nice. So, so you're, and then, but you, you're at your own firm now. So you've gone, you branched out and started your own. Branched out, worked for a local bank. Then started net lending about four years ago. Okay. So how long you've been in the mortgage business? That's a long time. All together, a little under 15 years. Okay. Wow. So you know the ins and outs? Hopefully so. I'd like to think so. He saw the big dive anyway. Yeah, yeah. And the big recovery. So that's awesome. I know him so. I got, I got a couple scars. As much as you can learn, you know. Yeah. I mean, you know, really. Oh, yeah. Crash, right? I mean, it was unprecedented, so. The ups and the downs. I had this segment we called, you know, got one tech job. I thought you were going to forgive you. That was close. So I was, I was traveling last week. Okay. And found this one. So it's kind of like. Tutoring. This found, yeah. Found this. Where was this at? Where were you? This was in Fresno. So yeah, tutoring. Yeah. Just not English, right? I'm just not sure what it is. Oh my gosh. Perfect. I've got one tech job. That's pretty funny. Yeah. I'll never see what happens. I don't think so. Anyway, pretty funny. So anyway, let's talk a little bit about them. You know, how is the market doing since the crash that you talked about earlier? I think it's recovered. You know, the housing market's recovered. The mortgage market's a little dynamic. Yeah. I think the last two weeks has been a little challenging with the new administration coming in. So even, so the Trump factor. Is it fear? You may think we were afraid or you think we're just kind of making a move. The market's responding to it. The equity markets, the bond markets. So rates have increased about 0.75 percent. Wow. In a week. In two weeks. Yeah. And they haven't moved. How long's the distance they moved that much? They were down at three and a quarter pretty much all year. Yeah. And the last couple of years, I haven't seen this big of a swing. Yeah, they sort of been moving like an eighth. Yeah. They'll go up, they'll go down. That's how they behave. Wow. And the Fed hasn't changed them. The Fed hasn't. They're, they think they are. I think, yeah. I think it's pretty half a point. It should be coming in the next couple of weeks, but. So that, will that mean then, what do you think? You think it'll. Yeah. They'll probably increase their rate by a quarter. Quarter. And then the mortgage rates are going to go again. There is probably going to be a response to that too. Yeah. In the mortgage market. So. Well put. There's probably going to be a response. Yeah. He's not prognosticating this direction. Just there will be a response. You can't predict. You can't predict. So it, so it heats it up, right? So it's just some people, but low. Some people have been having people are begging bets right now. They're doing what they got to do. But I don't see 4% as being that onerous to be honest with you. Well, it just depends on how you look at it. Like if you're buying a house in Hawaii, an $800,000 house, that mortgage payment from three and a quarter to four, it's going to increase your payment by 700 bucks. Yeah. So. Yeah. That's I mean. A month. A month. Yeah. A month a little bit. It slows down the purchase market. Wow. So it's going to be interesting to see the next 12 months. People just will buy condos. The people that are renting move into condos and the people who are buying condos buy houses. Typically, you like the things. All that emotion sort of slows down. Yep. I see. But with all this inventory we've got coming up over the next number of months. Yeah. That's a unique inventory though. I think that's reserved for buyers that can afford. They don't care. A million and a half. A million and a half. Yeah. A lot of cash buyers. Yeah. So it's a different marketplace, that inventory. So you're not really seeing much opportunity in that area? For lending? No. There's not a lot of loans going on. Oh, is that right? Most of those higher end. Higher end and so on. So what are all the different technologies that are going on? I'm thinking like there's all kinds of interesting things happening in this market to make sure it's all clean and the things that were happening in the past were not happening. Yeah. How was it different in countrywide or before 09 than it is today? I like to call the last 10 years how it was before the Wild West. It was deregulated. Yeah. So when you originated a mortgage it was kind of you did what you did and then if someone found out someone found out. Right. How we do business today is every single component of the loan business is watched over. Yeah, it is. Because it was like watching people write orders. They were just writing orders for mortgages. Oh yeah. Well you didn't have to document your income at one point. It was like you have good credit. Sign here. We're going to close in 10 days. Here's your house. And there's your house. Yeah. It was literally like that. I remember there were people that were putting on events and you could go and they would show you how you could have a house that you know it's like 5x what you could afford but you could arms and stuff. You could keep the lower rate for so long and then all of a sudden. Yeah. And so what would you do? You had to sell it in between that right? Because you know you could not afford it. You were trying to play the market. You know buy it here and then sell it when it was a little bit higher. Yeah. We all kind of see what happened there. Yeah. That's a lot of the reason why the market could deal with it. You can hear that crashing man. You can hear that when it was all the way up. Well it just sounded crazy. Like really? Yeah. Like really? Well I'm thinking but I look now at what you go through to get a mortgage and things like that. And what I see like rocket mortgage, right? They're advertising on the radio and on television and on the internet that you know they're making it sound like it was in the Wild Wild West days. Yeah. Well it's unique. It's that technology what they're doing. Basically you put in your information onto their site and it pulls your tax returns. It pulls your pay stubs. Yeah. It pulls your credit. So it pulls your bank account information too. Okay. So instead of having to provide your bank statements, your tax returns, all the documentation through an e-mail. Right. This technology actually pulls it from the back end. So you log in. Secures it all in one site. At one location. Yeah. So it's pretty cool technology. Quicken has it right now. Okay. I'm sure the market will pick it up in the next five years. Wow. So it's really cool. Like you go in, you sign up, you put in your information and you literally don't hand over anything because it's pulling it from... Oh, I know. It went in a few years ago. It's doing some refinancing and the paperwork that I had to take in because it was... Oh, it's a massive amount of paperwork. You should see our office. Oh, yeah. Stacks. Stacks. Stacks. I mean pay stubs, bank statements. Stacks returns. Yeah. Three years. So come signing day, it's still a stack. But in the application process, it can be a lot more automation. Now there is. Okay. Yeah. So that's where the industry, I think, is heading. What's the typical length of time it takes now to get through the market? Generally 45 days. So 45 days. Yeah, there's some lenders that are getting through in 30. Okay. There's other lenders that take about three months. Yeah. So that kind of depends on... It depends on whatever you're working with. If you're a sole proprietor like me, try when you apply for a loan, when they look at you and go like, ah, I don't think so. Yeah, it's black and white. Yeah. It's either you make the income and you're going to get the loan. Yeah. Or you don't make the income. There is no loan. Yeah. The old days were okay. You have good credit. Sign here. Here's your loan. So they were sort of selling the American dream before that everybody could achieve it when realistically maybe people, it wasn't really achievable for them. Yeah. Then they got a house they were stretching. Wow. Yeah. There's a, where my, one of my family members lived in the house behind them. Family went and got a line of credit loan and then left. Just abandoned the house. Just went and got a line of credit loan and then they just moved back. They took the cash. They moved, they moved, took the cash and then moved out of the country. Yeah. Oh, they just, so they just went bankrupt on that. We've seen a lot of that like maybe five or seven years ago. Yeah. They took the cash they could and then off they go. And then because you can't really recover the cash, right? Yeah. Then the bank, the bank gets it and then they're sitting on it for who knows how long. Yeah. Oh, wow. Wow. So that, you know, it's, it's just kind of, I don't know this world. I mean, I've had a house I got, I don't know, like 12 years ago. I remember when you bought that house. Yeah. I mean, We did refit it. How many kids, I'm seeing like these, these young adults, how they're affording, you know, these down 20% down. They better get it soon because it's going up. So $160,000 has got to be coming from mom and dad or somewhere. Mom and dad, gift of equity from the parent's house, gift from a relative. Yeah. Especially out here in Hawaii. Yeah. I mean, to get into an $800,000 house, $160,000 down. No. Or you could actually get that same house for maybe $40,000 down, but you got to make the income. Okay. To support the bigger payment. So then do you make enough to support the $700,000? Yeah. And that's why you've got multiple jobs, multiple families, multiple jobs. Wow. And then you got to figure private school fees and all those kinds of kids. I'm getting happier and happier. So my son's buying a house in Kentucky. In Louisville. Okay. A couple hundred grand starter, maybe a little less somewhere in that range. So, but I'm, I'll tell him I got 10% down for it. Yeah. Which is half of it, right? There you go. He's going to have the other half. Perfect. That won't be so bad. That's not bad. Okay. Well, with that, we'll go get Angus. I don't know what he's been up to. Well, get Angus. We'll be back here in about a minute. Hi. This is Jane Sugimura. I'm the co-host for Condo Insider. And we're on Think Tech Hawaii every Thursday at three o'clock. And we're here to talk about condominium living and issues that affect condominium residents and owners. And I hope you'll join us every week on Thursday. Aloha. Aloha. My name is Justine Espiritu. This is my co-host, Matthew Johnson. Every Thursday at 4 p.m. on Think Tech, we host the Hawaii Food and Farmers series. We like to bring in folks from the whole realm of the local food supply and agriculture, anyone working on these issues, any organization or individual that has plans or projects. What kind of people have we had on? Us. We've had farmers. We've had chefs. We've had people from government, larger institutions. Everyone who's working to help make Hawaii's local food system that much better. So you can see us every Thursday and join the conversation on Twitter. And we hope to see you there. Thank you for watching Think Tech. I'm Grace Chang, the new host for Global Connections. You can find me here live every Thursday at 1 p.m. where we'll be talking to people around the islands or visiting the islands who are connected in various aspects of global affairs. So please tune in and Aloha and thanks for watching. Hey, Aloha everybody. Welcome back to Hibachi Talk. We're talking about mortgage today. So for the security man, I got a little bit of mortgage fraud for you. Five people yesterday were indicted in New York. $33 million they schemed from about 60 people. Their deal was they tell you for a fee, they'll get your mortgage, they'll get rid of it for you. I'll talk about a few of the things that you should look for, but something like this, somebody telling you that is wrong. These guys are going in and then filing these discharges of mortgage documents and then showing to you that it's been stamped, but that's only been filed. It was never actually approved. And so then they're charging these fees and taking that money. So mortgage scams are out there. Some of the warning signs, you know, especially if you're looking for a loan modification and something to save your home, you know, you're vulnerable because your home's important to you. So, you know, if you get these guarantees that you're going to get a loan mod or stop a foreclosure process, or if somebody tells you not to contact your lender or a lawyer, some of the other warning signs claims that all of their customers or most of their customers get mortgage relief. If they ask for an upfront fee before providing you with any services, if they accept payment only by cashier's check or wire transfer, or encourage you to lease your home so you can buy it back over time. So, these things make warning signs that these guys aren't operating within the parameters of the law and they might be trying to scam you. So, there's a group. I think Zuri's got a logo here. Hope Now. This is a reliable group you can go to on the web. HopeNow.com. I think I see the... I don't know if she's got the phone number up for you. But these guys, if you want to check someone out who's trying to do some deals that don't sound right to you, go do that and you can start here. This is a reliable resource. So, Angus is here off the beach. How you doing there? Good to see you, man. It's great to see you. You've been traveling a bit. We've been traveling. I know. How you doing there, Frank? How's it going, buddy? We're doing pretty good. You know, we've got a grain showing up in your beard. Yeah. He's trying to match us. Yeah, boy, that's it. It's looking pretty stylish. It's very stylish. You're looking good. I like the airing. Oh, yeah, the airing. That's like... Go, Canada. Get the lassies chasing me. That's what's happening. Anyway, you know, I usually have a gadget, but it's going to be a Christmas and I'll start fighting some gadgets. But you know, it's not a new segment I want to try out. It's called, you know, because we had the elections, right? It's called... We did? Yeah. It's called, you know your city's cheap win. Okay. What do you got for us? I forgot one. I've got this up on New Elano Avenue. You know your city's cheap win. When this light bulb breaks down and they've duct tape it to the post. Oh, my gosh. I mean, that's what you know your city's cheap. Come on. That is live from Honolulu. There. That's the best you can think of, man. I just don't think they're spending our money right. You know your city's cheap win. They're not spending your money. That's what's happening there. You know, I was going to talk a little bit about security too and just to remind everybody about the healthcare laws and so on. In the past 24 months, phishing attacks on hospitals have been arisen the most. So just be careful when you're giving out your health information. That's not what I'm going to say. Yeah. We'll put it over again. So, you know, when you're out there like over 24 months, you know, look at that. That's not a gadget for you. That's a cash-stander. And then it's like, we cash-stander. I don't know where you get but I'm worried about you, buddy. I know. Look, look, look. That's all I got for this week's show. And remember, everybody, let your wing gate ring where are you being? Hello? Angus leaves us with a cash-stander that scans cats. Now, the healthcare information was valid, though. There's been a lot of hacking in that world. So what about the mortgage world, Frank? You've been in a world that you saw really go... I don't know if people can get taken advantage of and I think some of these schemes that these guys are running have actually happened here in Hawaii with other people. So how's the industry? Did they purge a lot of people out? Is this still kind of ongoing? I was shocked at the size of this one. Yeah, as you can see, there's still some bad things happening out there. But the markets actually came in. Regulators have come in. Hawaii specifically, we have a commissioner department of financial institutions. So we're highly regulated. If you sell loans, you actually have to be licensed by the state, FBI background checks, credit checks every year. Oh, really? So you have to have an FBI background check every year? Yeah. Actually, it's December, so everyone's going through theirs right now. Nice. So it's a little bit different. Make sure you weren't a bad boy during the year, you know, which is important. A lot of times they used to do these things and they just did it once and let it go. You know, and so I think the annual checks, we were talking about that in another industry recently, but doing them periodically, right? You shouldn't just be allowed to just have a clearance that lasts forever. Well, you're licensed in multiple locations too, I know that's right. Multiple locations just all under the state of Hawaii. Well, okay. Well, I want to go to California one day. Oh, right. Every state has a different regulator. I see. Different regulator. No, how many people are in the business that you're in here in Hawaii? I don't know for sure, but I'd guess maybe 500. Wow. Yeah, maybe 10 years ago, it might have been at 2,000. Oh, yeah. So it really did narrow down quite a bit. Yeah, anyone was a loan officer. Is that right? Wow. So the bank, and that includes the banks, right? That includes the banks. They're lending specifically. And are they still the biggest? Yeah, the banks lend the most. Okay. And at least in Hawaii. I see. Yeah. I find the banks to be the most difficult to work with though. Well, they're banks first. Okay. They're mortgage companies second. Yeah. Credit card companies. I see. So when you get a mortgage from a bank, it's a little challenging to navigate through. Right. At least 45 days, I can tell you that. Yeah, I think most of the banks are a little bit higher right now, just because it's a little challenging to get through the bank. When we bought our building, it was in Waipio, at the Waipio Business Center, right? And the SBA had that 504B program. Oh, right, yeah. And we went under Bank of Hawaii, but with that, which is there's another group that handled that piece of it. Yeah. Forget their name out here. But it took like a year. Yeah. It was like a really, really long time. And you're a sole proprietor, too. So you've got that same thing. Show me your contracts. Does that just mean you're broke? What? Sole proprietors have... That's me. I'm a sole proprietor. Sure. That was amazingly helpful for us. I think we didn't have to put down quite so much. Right. We were able to get a good property. And it's gone up like 30%, so I'm really happy. So what are some of the things that people should be aware of that when they want to start playing from work? What are the heads up nowadays that they really need to be... Yeah, especially with interest rates going up. That's going to be tougher, right? You want to be careful who you work with. So if you're working with someone, you want to ask them if they're licensed. Obviously. If you're here in Hawaii, you want to work with someone in Hawaii. You want to work with someone on the East Coast. Yeah, yeah. And then protect your information, right? You got to send over your tax returns, pay stubs, all that stuff. Right. Maybe not email it, drop it off in person. Okay. Or send it on a secured site. Yeah, so hard copy or encrypted. It's not one thing I like to do. Yeah, yeah. No, I should be encrypted. No CAT scans. Yeah. No CAT scans. So that's good advice, but work locally. And is there a place they can check on these people? Like you said there's maybe five, is there a list of licensed? Oh, yeah. It's public information. You can go online. DCCA or whatever. I think it's consumernmls.org. Okay. And you can check anyone's name. Check anyone's name up there. Yeah. Make sure that they're reputable. Mm-hmm. So how does the industry work? So you own an office, you have agents that work for you that are also, they're all licensed or they operate under your license? They're all licensed. That's awesome. So if you originate loans in the state, you have to be licensed. Wow. If you do the back-end paperwork, you don't necessarily have to. Yeah, processors. And how does it, is that, do you also do the, who are the other guys praising? Do you do a praising or is that a separate group of people? Separate piece. It's a separate piece. They have to be licensed, too. I see. It's a good deal. No. They're, obviously, you must take classes, go to classes. Classes, tests. I'll see EU credits. Yeah. Every year you have to go and take, you know, I think it's 10 hours every year. Every year. What's the biggest impact to the industry for people that are looking to get a house? And obviously interest rates going up is a big one. Are there other things coming that they should know about? You know, right now it's just the income. I see. You know, as the cycles happen, you want to get in before there's another bad cycle. I see. Because if you don't have the income, you can't get into the house. Yeah. Those people that went in with adjustable rate mortgages that are coming, Is that still happening? Are those still around? I think they've kind of flooded out of the pipeline. I have one. Yeah. Well, they're still good arms. It's 10 years old. I mean, it's been around for a long time. Not all arms are bad. Oh, I see. There's actually good arms. Yeah. And if they adjust, they adjust down. Yeah. But it happened to me and adjusted down, which is kind of nice. Yeah. If you're in a good arm, you're probably lower than most people are in. Yeah. But the bad arms is what got people. Yeah, everybody got them burned. So proud. Well, and that's because they just didn't look at their income, right? It was when income-dependent. Just the nature of the product. I see. Yeah, that was one of these. Yeah. Wall Street came in. They financed mortgages. Now they're out of the market. So Fannie and Freddie are the two main that broke the bank. They broke the bank. Yeah. Yeah. We needed bailouts, right? Yeah. I know. Because I had one. A bailout? I had an arm that went up. Only because at the certain period of time that said I had to start making principal payments. Oh, right. You had an interest-only arm. Yeah. And then that year, seven or eight, it said now you've got to pay principal and back principal for the seven years you didn't pay on top of the principal that you need to pay right now. Yeah. Most people don't understand that. That's ugly. Yeah, it's... So it was accruing interest. You just didn't have to pay it for seven years. Yeah. You'll pay it on your side. That's a lot of money. Yeah. Oh, yeah. How long does that go? Like a 30-year deal? Well, it goes until I decide to get out of the thing. I guess how easy it is to get out of it now. Hard? Because you're a supplier. Because you're a supplier. Yeah. Oh, you want to roll into another product at some time? I'd like to. It's because I like to roll it into something else. But it's just like when they look at it and you go, wait, you're semi-retired. You've got your own company. You've got no history. You're on fixed income. I've seen your discount. I get so vouched for you. And I don't see the issue. Yeah, I know. And he makes a ton of money. So... I know I talk to guys like Frank. He was like, hey, Frank, how are you getting the loan? No. Nice knowing you, but no. I'll come on your show, though. I'll tell you why. I'll tell you why you care. Yeah, let's have a beer. That's good stuff. I think that's how the conversation went. That is exactly how it went. That's awesome. So, but I appreciate your honesty. No problem. Well, yeah. And it's good. I mean, that's what people need to hear, right? Actually, you need to know the truth, especially like don't expose. How much income should people expose to a loan? Like half? Or what's the formula that you're talking about? 40 to 45% of your annual income. You could say you could afford that in a mortgage. Yeah. That would count the insurance and everything. Exactly. What about maintenance on the house? That's all. They don't take into consideration there. Because I got to paint mine. They should because deferred maintenance is big. Yeah. If you buy a fixer-upper, you qualify for the loan, but you can't qualify... You can't fix it up. Fix the roof. Oh, yeah, that's a problem. That's going to be a problem. That's going to be an issue. Yeah, yeah. I got to paint mine now. This is like a grant. It's not cheap. Put it in a roof. Oh, to paint it. Oh, to paint the house. Yeah. Yeah, so my Arizona house cost me two grand to paint it. Is that right? What's wrong with this picture? Hawaii labor, I don't know. Yeah. Maybe it's the price of the paint. It's the GE tax, probably, bringing that price up. Yeah. 40, that's true. Because that's 16%, really, when you look at how it's compounded. So, 40 to 45% of your net income... Gross income. Yeah. ...is goes towards your mortgage payment. Mortgage and any consumer debt. Consumer debt that you've got in there. Yeah. So, you've got a car loan, you know, all of those guys. Yeah. And it doesn't take into factor your tuition either for the kids. Wow. Wow. Okay, so... Hawaii, that's a different dynamic. Oh, yeah. So, we got to close up in just a sec. So, what's your website and where can people get a hold of you? Yeah, call Craig. So, we have a really cool website, netlendinghawaii.com. Netlending, okay. Yep. You can check out all of our loan officers, our lenders that we originate for. Okay. And take an application. And take an application. There you go. Get in for the market goes up. It's gone up three-quarters of a point in two weeks. Because of Uncle Donald from what I was told. Is that right? Anyway, you told me that. Yeah. Anyway, no one goes away unempty-handed. You got number 95 in the series. Episode 95, downloaded later tonight. You can put whatever he gagged on it later tonight.