Tomo CEO Greg Schwartz talks market conditions, AI-driven loan production solutions

In the newest episode of the PowerHouse podcast, HousingWire CEO Clayton Collins sits down with Greg Schwartz, CEO of Tomo, to discuss market recovery indicators and Tomo’s recent investments in artificial intelligence (AI). Schwartz also shares his approach to building a mortgage company alongside tips on work-life balance, market dynamics and more.

To start the conversation, Collins and Schwartz reflect on Tomo’s past as the company was founded during the height of the COVID-19 pandemic. Schwartz points out that starting Tomo required an adaptive approach to leadership by people who maintain a “wartime“ leadership style that adjusts to industry changes. But he notes that building a successful mortgage company requires hard work and diligence, regardless of industry changes.

From there, Collins dives deeper into Tomo’s past and mentions its focus on purchase loans versus refinances and other product types. Collins points out that purchase lending is generally more stable than refinances. Schwartz agrees and shares that one of Tomo’s top priorities was to build a business model that moved away from unstable refinance markets in favor of a more stable and predictable purchase-focused strategy.

Collins asks Schwartz to share how he balanced working with real estate agents and other referral partners by leveraging AI to develop the “Costco loan origination method.“ Schwartz shares that agents prefer Tomo due to its shorter origination timelines, which allows them to deliver more value to customers. Agents prioritize accountability and quality, and Tomo helps them provide that for buyer clients.

Schwartz also shares that his priority is to help Americans build wealth through real estate, which comprises more than 70% of all wealth in the U.S. As such, Tomo’s priority goes beyond merely driving loan volume.

“It is not just about turning volume or making a buck,” Schwartz says. “The people that come to work here understand that it’s a startup. It will be a little less consistent every day because we’re inventing and changing day after day, but it’s purpose-driven, and that makes my job easier because I get to anchor to something bigger than me.”

Unlike other lenders, Tomo doesn’t use market conditions to determine production goals or other critical metrics. He urges leaders to innovate and set standards based on a shared vision for the company in the future. Collins says it is vital to understand market conditions to a certain degree when determining performance metrics. The societal views of housing wealth also influence Tomo’s product decisions. 

Schwartz shares that millennials have the same attitudes toward homeownership as older generations, despite the increased costs of housing. He also notes that many homeowners struggle to save for a down payment, a phenomenon he calls “the Pinterest effect.“

“We see a whole generation of homebuyers — and there’s a lot of research — who’ve struggled to save for a down payment, and I hear this theme repeatedly. I saved, saved and saved, and it still seemed elusive because homes became more expensive during that period,” Schwartz says.

He describes the Pinterest effect as an inflated belief that many first-time buyers have about their first home, which dissuades them from purchasing.

Next, Collins mentions the recent decline in mortgage rates and asks Schwartz for insights on how Tomo will respond. Schwartz shares that Tomo’s recruitment efforts have increased and that the company has put more effort into technological developments. His goal is to use technology to hire fewer employees, which takes the workload off Tomo’s current workforce. Collins and Schwartz agree that some mortgage companies will hire fewer employees. 

To close the conversation, Schwartz shares that he is improving his leadership skills by learning from mentors, creating and following standards, communicating more effectively and holding his team accountable for offering better mortgages.