Founded in 2013 by serial entrepreneur Bill Lyons, Griffin Funding is a mortgage provider and technology firm that provides a disruptive approach to the real estate industry.
As mortgage companies and real estate agencies continue chase emerging tech trends, Griffin remains ahead of the curve by developing and acquiring innovative tech solutions that offer prospective homebuyers quality service, better rates and broader financing options.
Since launching the company, Griffin Funding has seen earnings increase by a staggering 4,473% within three years, generating $5.2 million in revenue in 2016. Regarding as a trailblazer in the financial services space, Inc. Magazine ranked Griffin Funding No. 83 on its 2017 Inc. 5000 list celebrating top companies to watch across industries.
I spoke with Bill Lyons about the vision behind his company, redesigning the real estate industry and the keys to building a financial services business in the digital era.
What is the void or opportunity that inspired the idea behind Griffin Funding?
Bill Lyons: I started Griffin Funding in 2013, just as the housing market began to recover and gain momentum. At the time, mortgages were still dominated by the big banks, but brokers were beginning to make a comeback. Consumers want more choices. I started out as a loan officer, writing loans personally. When my pipeline got big enough and I established a formula that worked, I then decided to start a company and scale it. I established a niche, got signed up with a few lenders and starting hiring talent.
What have been some of the challenges you’ve faced breaking into the industry and establishing yourself in the space?
Bill Lyons: In the beginning, we had to offer the best price and best service. We had to out-work and out-price the competition. We established a niche. We printed the VA handbook and read the guidelines until we fell asleep every night. We wanted to know everything there was to know about helping veterans finance and refinance their homes. In 2015, we decided to go from brokering loans to other lenders to a direct lender. We did this so that we could underwrite VA loans directly off of the VA handbook without any rules or overlays. Less restrictions allows us to provide loans that big banks and big credit unions aren’t interested in.
What sets Griffin Funding apart from other competitors in the space and how does your approach shift the current trend?
Bill Lyons: Historically, most veterans used big military credit unions to do their mortgages because they also do their banking, car loans, credit cards and insurance there. We, however, offer an alternative on the mortgage side of things. We focus on five-star reviews, and when potential clients see those it instills confidence. They choose us because they know we are going to fund their loan on time and at the terms we promised, otherwise we won’t have five-star service embedded into the DNA of our culture. Mortgage tech is the convenience of handling the entire mortgage on their mobile device or desktop through our digital mortgage platform. Realtors and homebuyers are busy and they don’t have time for headaches; they want convenience.
What have been some of the biggest blind spots or pitfalls plaguing real estate space and how does your company aim to solve for them?
Bill Lyons: Talent is hard to come by. Loan Officers and support staff are in high-demand. How do you maintain a five-star service culture when talent is limited and you are growing so fast? We are solving this problem by hiring inexperienced people and teaching them the business from the ground up. We hire very slow and fire fast. Get a couple of bad reviews online and you can pretty much count yourself out. New hires learn as they go in entry level positions. We invest heavily in training, mentors and marketing to get them up the ladder quickly. We believe 95% of a team member’s success is character and hunger — the rest can be taught. Technology is disrupting the real estate and mortgage space and it is important we are on the forefront so we can adapt and embrace the changes to come.
Describe the specific tech solutions your company offers and how do they work to advance the industry?
Bill Lyons: As a mortgage tech company, our digital mortgage platform provides a secure mobile-friendly loan application, centralized document collection hub, and bank account syncing for next to instant pre-approvals and streamlined loan closings. In the first quarter of 2018, we will also give our clients the ability to run their own credit and choose their loan program and interest rate within the system. Empowering consumers with more information and data to make better decisions is what disruption in this space is all about.
Describe your business model and what are the core components that drive what you do?
Bill Lyons: As a mortgage tech company, we focus on a consumer direct model. We also have a small traditional retail channel, but our core focus is consumer direct and leveraging tech as much as possible. We are currently licensed in six states and are expanding our geographic footprint across the country. I’m obsessed with improving the process through tech and constantly innovating in order to make it easier for consumers to achieve and maintain homeownership. I’m satiated when team members achieve and grow within the organization. I’m driven by giving back. One of the causes that I’m most passionate about is our partnership with Shelter to Soldier. A portion of the proceeds go to help rescue dogs and train them to be therapy dogs for veterans in need. Contributing to Shelter to Soldier is what gets me up in the morning, because it is a mission that is bigger than just us.
What is the mission driving Griffin Funding and what primary goals are you looking to accomplish?
Bill Lyons: Financially, I’d like to grow Griffin to a $100 million-dollar company that funds over $6 billion per year in loan volume, while maintaining a 20% profit margin. We are raising capital in order to grow out a national brand with regional consumer direct centers while maintaining our five-star service culture. VA loans are roughly 12% of the $1.7 trillion-dollar market. A 3% market share is within reach with the right human capital and financial capital. Contribution wise, we can improve a lot of veteran’s lives through the American dream of homeownership with that kind of volume.
What are the keys to your company being both successful and sustainable?
Bill Lyons: The mortgage business has a lot of external forces that are out of our control, from regulatory hurdles, tax reform, global economy and interest rates. Housing is roughly 25% of the GDP. Interest rates have been artificially low for some time and are headed up. Moving forward, home purchase will be where the growth is. Interest rates need to go higher, but we can’t let them get out of control and kill the momentum housing has right now. On top of that, we have a proposed tax plan to limit mortgage interest deduction (MID). The only three reasons someone buys a home is first mortgage interest deduction, next is the potential for gaining equity through appreciation and lastly the capital gain exemption. Otherwise, you are better off just renting. The current tax reform proposal threatens to severely limit two of the three. People don’t use MID to buy bigger homes, they use it as the reason to buy a home. Our legislators are so out of touch on this issue.
How do you see your company evolving in the next 3-5 years and what impact do you hope to make on the industry?
Bill Lyons: We want to be ahead of the trend, but not the pioneers. Pioneers get arrows. We are in a commodity, service-based business. The only way to differentiate yourself is doing more for the client than anyone else is willing to do, adding more value, education, expertise, and outstanding service. This creates confidence by providing tech that makes things convenient. We want to change this industry by bringing in confidence and convenience.