For this week’s episode of the LodeStar Lending Leaders podcast, Jim sat down with Laird Nossuli, CEO of iEmergent, a data and analytics technology provider focused on forecasting the future of the mortgage industry. Since 2000, iEmergent has been focused on delivering insights to help organizations navigate the industry’s changing landscape. Jim and Laird talked about using data to forecast the future, navigating changes, and the importance of championing diversity and underserved markets.

Beginnings

Laird’s father, Dennis Hedlund, founded iEmergent in 2000 after working at Wells Fargo. He was interested in how the mortgage industry could better served what he called “emerging markets,” by making forward-thinking decisions, instead of decisions based purely on short-term market conditions and profit. Laird joined in 2007 right after graduating with a degree in social work, and used her background and skillset to help with the the community-building aspect of providing resources to underserved markets.

Shortly after she began, however, the market crashed and the Great Recession wreaked havoc on housing. iEmergent lost 85% of its revenue overnight. In the years since, iEmergent has leveraged its predicting modeling to grow again. The past couple years have been good for iEmergent as a business, although Dennis Hedlund passed away in 2016. Since 2014, Laird has served as CEO. While iEmergent is all about focusing on the future, Laird considers herself to be following in her father’s footsteps.

A Tale of Two Futures

The data shows that doing business with a mind to diversity is good for business in the long run. It’s difficult, however, to prove that to business owners. Taking risks can seem, well, risky. So Laird gave a presentation called “A Tale of Two Futures,” wherein she used iEmergent’s forecasting models to predict the outcomes to two scenarios. In the first, the industry doubles down on tried-and-true, business-as-usual lending and ignores underserved markets, such as Spanish-speaking families. In the second, the industry adopts a new paradigm, thinks ahead, and retools its business practices to accommodate underserved markets. The second model, when evaluated with regard to loans and dollars generated, is the clear winner. Forward-thinking lending benefits lenders, not just families and communities.

First steps?

So how do lenders serve underserved markets? It looks different for everyone, but there are three basic hurdles to underserved borrowers: trust, education, and finance/credit. Each of those must be addressed to move forward and push housing in a more diverse, equitable, and profitable direction.

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