What’s next for the mortgage industry in 2025? Joseph Panebianco, CEO and President of AnnieMac Home Mortgage, Diego Sanchez, to break down key market trends, M&A activity, and growth strategies in an evolving landscape. With interest rates fluctuating and housing conditions shifting across regions, AnnieMac is making bold moves — including new acquisitions and the expansion of Cash2Keys, a program designed to give buyers a competitive edge.
Joe shares his perspective on market conditions heading into the spring, how AnnieMac is positioning itself against major servicers, and the company’s strategic approach to both buyer’s and seller’s markets.
Joe shares his perspective on market conditions heading into the spring, how AnnieMac is positioning itself against major servicers, and the company’s strategic approach to both buyer’s and seller’s markets.
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NewsTranscript
00:00We are live from the George W. Bush Institute in Dallas, Texas.
00:10I'm Diego Sanchez, president of HousingWire, and I'm joined today by Joseph Panabianco,
00:18the CEO of Animac Home Mortgage, and I'm going to call you Joe, and Joe, I would love for
00:24you to just, for those in our audience that don't know, what is Animac Home Mortgage?
00:29What's your product focus, and what's your geographic focus?
00:32Okay, so Animac Home Mortgage is a nationwide lender.
00:37Our natural habitat, as they often say, we're a distributive retail.
00:41So while we do about 30% of our business B2C, 70% of our business is really B2B.
00:48We try to look for how we can add value to our referral partners, which are real estate
00:54agents, financial advisors, et cetera.
00:57And you've been working on some M&A over the past couple of months, and are you able
01:03to share a little bit more about that right now?
01:06So it's funny.
01:07So I try to do about two acquisitions a year, and I'm actually working on two right now.
01:16But it's very difficult to share in today's market because, I would say, there is a cacophony
01:23of recruiters that, if they get a whiff of what's going on within a company, and not
01:29so much for Animac's sake, but you generally have an ownership team that is doing what
01:35they can to hold their team together, and it's hard enough to do it through a transition.
01:39But I can give you some specifics on what we're looking at.
01:45There are a number of IMBs who just have phenomenal sales organizations, and even operations staffs.
01:52But because of their size, they're either deficient in execution, they don't have the
01:57necessary agency tickets, they don't have the tech stack, or, quite frankly, they don't
02:01have the capital.
02:02A lot of folks exited 2021 and 2022 with a fair amount of capital.
02:06But let's not kid ourselves, it's been quarters of a difficult time period.
02:11So what we've been able to do is put together a really good value proposition for folks
02:16in that cohort.
02:18But again, retention is a large part of it.
02:21You hear folks like Stratmore, they do a great job.
02:25Sterling, folks that are out there, they're out and about doing it.
02:28And I think their first advice is do no harm, the Hippocratic Oath, I'd say, of M&A.
02:35Yeah, we are somewhat acquisitive of ourselves and have done four acquisitions over the past
02:42five, six years.
02:44So definitely know that motto and use it in our acquisitions.
02:50Makes a lot of sense.
02:51What are you targeting?
02:54What's your ideal mix of organic growth, growth internally versus inorganic growth, where
03:00you're going out and acquiring a company?
03:02Yeah.
03:03So can I put a third bucket in there?
03:05Yeah.
03:05That's, I think, often overlooked.
03:07So I'll start with organic growth.
03:08Yep.
03:09So organic growth, there are two primary focuses of ours.
03:14One is higher conversion rates.
03:15The other one is increased lead flow.
03:18So higher conversion rates is something that gets a lot of lip service, but I don't know
03:23that people actually align their business model to it.
03:28So for example, do you have one or two or three things within your tech stack that are
03:33specifically tracking conversion rates?
03:35There's an industry average for conversion rates.
03:38Many people likely don't know it.
03:41Some people do.
03:42But the question is, do you know every single law officer's conversion rate?
03:45And do you know where they are better?
03:46Can you bifurcate it or trifurcate it into the different buckets of loans they do?
03:51So that's one area that we look at of organic growth.
03:55Yep.
03:55And of course, there's acquisition.
03:57And you could break acquisition down into individual loan officers.
03:59You could break it down into branches.
04:01You could break it down into divisions.
04:04And you could break it down into firms.
04:06In an ideal way, firms sometimes are a lot easier to pick up and move because you've
04:12already got the buy-in of the senior leadership.
04:14You're not playing tit-for-tat with you make an offer.
04:17Then there's a counteroffer.
04:18You get through that.
04:20But that's been a very active space.
04:22But I will tell you, the folks around me know, I use the phrase, it's like kissing a lot
04:25of frogs.
04:27And I mean this sincerely in that anyone reading this, I would implore you, don't wait until
04:35you're in the throes of death before you head down the M&A path.
04:41If you see it three to six months out, you're going to serve yourself better.
04:44I would tell people out there as well, if you can make it, make it.
04:49Keep pushing.
04:51I get no great joy in seeing other companies having to fold into other.
04:55It's just a natural part of the business.
04:57In most of life, you're either eat or be eaten.
05:00But having said that, for those who can take some of the advice from today, if they were
05:04here, make sure you understand your costs.
05:06Make sure you're not spending too much on tech that's not being used.
05:09Make sure you really understand who your businesses, who your clients are, et cetera.
05:13But for those who have done all that, and it's still a tough market, and you see that
05:18the end of your capital maybe is near, or you're getting into trouble with some of
05:21your warehouse line providers, I'd really urge them to start looking.
05:24Because the benefits, it would be better for them.
05:29Then the third bucket, which I think no one really talks about, is retention.
05:33The best place to grow is to not lose your current staff.
05:38So I think the industry, and I believe this is a Stratmore number, I think the industry
05:42turnover rate is about 33%.
05:45We're very proud, although not happy enough with it.
05:48We're at 23%.
05:49And our goal is to get to 18% for this year.
05:53And so within that, you have to have strategies as well.
05:55You have to, first off, identify who really is worth saving.
05:59Because we all understand there's three broad buckets of originators.
06:02You have your top performers, your middle, and your lower.
06:05And we can even break those into individual buckets.
06:08But the reason why the industry has been so recruiting crazed is, one, production is lower,
06:17no question.
06:18And you have a fixed cost within this mortgage industry you need to maintain.
06:20But two is because your folks are getting picked off.
06:25So if you can hold on to recruiting, I would say that's our first priority,
06:31making sure we hold on to the folks we have.
06:33That makes a ton of sense.
06:35You talk about retention.
06:36And so there's retention of LOs.
06:40But there's also retention of your customers and recapture of those customers.
06:45How do you think about servicing and then opportunities down the road to do a second
06:51or a third transaction with customers that you do the first transaction with?
06:56So two questions there, I think.
06:57I'm trying to break them down for you.
06:59So first question is servicing.
07:01So I hear from some very smart people who are probably right is that get as much servicing
07:09as you can.
07:11But then when I've taken a look back at that, I say to myself, we are a distributive retail
07:15model.
07:16We like to think of ourselves as the Nordstrom of mortgages rather than maybe the Dollar Tree
07:22store.
07:24Arguably, we have a larger infrastructure.
07:27And we have maybe some higher comp plans, et cetera.
07:30So we don't really have the ability to be as price competitive as, say, a small broker
07:38or a consumer direct division, although we have one of those.
07:42So there have been times where I have been active seller of servicing and or just not
07:49retained as much.
07:49And that's simply because a year ago or so when rates were at 8%, I understand that in
07:56order for me to break even on the investment in servicing, that needs to be on my books
08:00for three and a half to four years.
08:02And at any given time, if rates were to drop precipitously, we're so purchase focused.
08:08It'd be very difficult to make that investment.
08:10But I'm selling over the long term, love servicing.
08:12So then the question you're getting to is, how do we retain that when we have it?
08:18So what we have established is more of a journey.
08:22I think what happens with a lot of mortgage companies is rates drop and the panic ensues.
08:28They start calling.
08:29So you have to be in touch with these clients and not just an email telling you what your
08:35home value is or not just an email giving you a Thanksgiving recipe.
08:39You've got to be in touch with these folks.
08:40You have to let them know specifically what their potential savings is.
08:44You've got to let them know that you're still there.
08:46I think there's a great statistic in the real estate space.
08:48And please tell me that 85% of all people love their realtor, but only 13% of them use
08:53them again.
08:54That's right.
08:54Something like that.
08:55I think it's a little higher on the mortgage side.
08:57But having said that, with all the transitions that's gone on in the mortgage space,
09:01your customer might not even have the same loan officer there.
09:03So it's about the journey.
09:05And the journey is a long, it's a multifaceted approach to making sure that these people
09:09know you're there.
09:10You're not just a strange entity to them.
09:12This way, when rates do drop and they get your call, they'll say, oh, OK, Diego.
09:17Yeah, what do you got?
09:19And you go through the process.
09:21And then, of course, you've got the, and once you pull the credit, you're going to get a
09:23flurry of calls.
09:24But this also helps keep that at bay.
09:27Yeah.
09:27Because they already know that they have a trusting relationship.
09:29You just can't do that with a phone call and rates drop.
09:32Yeah, that makes sense.
09:33So we're at the Housing Economic Summit.
09:36And I think you're a data guy.
09:38I think you like the numbers and are well aware of what's happening in the market.
09:43And it's been a tough market for a couple of years.
09:46Are you sensing anything, whether it's in your sales force or in your customer base,
09:53that tells you that there's a light at the end of the tunnel?
09:59So I would say this.
10:00So I'm a glasses half full guy.
10:03But I will tell you that the prospect of it's going to be morning again soon is a very dangerous
10:12one for salespeople because it sort of keeps them at bay.
10:14It keeps buyers at bay.
10:16So what we try to do is look at, listen, irrespective of the environment we're in,
10:20we've got one of the best markets in the world.
10:24We remember that.
10:24So we did a little over 4 million units last year as an industry.
10:30And depending on loan size, that's about $1.4 to $1.6 trillion worth of business.
10:37You can get, as I say, your unfair share of that if you just stick to the basic fundamentals
10:43of blocking and tackling in this industry.
10:45So I know your question was, do I see anything out there data-wise?
10:48Yeah, you can see some cracks.
10:49So it may be a bit too much for this discussion.
10:54But there is this sort of theoretical neutral rate, which is neither recessionary or inflationary
11:01within the economy.
11:03I believe our economy has been running hot for a long period of time.
11:08I also believe it's starting to slow.
11:10No one knows the rate of when we'll reach that critical point where it's slow enough,
11:15where rates will get back to the magical 6% we're talking about now.
11:18Do you think 6% is the magic rate?
11:20I do.
11:21When we were, we had our best month last year in October.
11:25And if you back up 60 days from that, you saw rates dip.
11:28And so it does tell you that there is a lot of pent-up demand, and not just for purchases,
11:34for refinances too.
11:35I know everyone's very fond of showing the distribution of outstanding mortgage coupons.
11:40But you have to remember that that person with a 3.5% mortgage has now spent two or
11:45three years in there.
11:46They've probably incurred some student loan debt.
11:48Maybe, maybe not.
11:48They've incurred some credit card debt.
11:50They've had to maybe go out and buy a new car.
11:53There's a confluence of circumstances that change someone's ability to afford their total
11:59payment rather than just their mortgage payment.
12:00So in more difficult markets like the one we've been in, it's not an expanding pie.
12:06And so if you want to grow, you need to take market share.
12:09You do.
12:10And so you have some programs that I think help you do that.
12:13Could you tell me a little bit more about Cash2Keys and how that enables your sales
12:18force and your team to grow?
12:21Yeah, I would love to.
12:23So we were, to best of my knowledge, the first person to come up with a cash platform in
12:27the IMB space.
12:29And the premise was, how can we elevate buyers who maybe have lower credit scores or they're
12:36not on top?
12:37Put them at the top of the hierarchy in terms of buying a house, plain and simple.
12:41And if you look, again, hierarchically, it's the cash buyer, then the well-heeled conventional
12:48buyer, and then you go down the convention.
12:50Then maybe you get to VA, and then maybe you get to FHA.
12:52Right.
12:53Right?
12:53And realtors, bless their souls, they do a great job.
12:57But I've had direct discussion with the realtors that won't even look at an FHA.
13:00Sure.
13:01They won't even look at it.
13:01So our platform, we thought, what's the problem we're solving?
13:06Right?
13:06The problem we're solving is on the real estate side, the real estate agent side, our B2B,
13:11and our B2C.
13:13Right?
13:13They just can't get in front of everyone else.
13:17So we thought, OK, what if they could come in as cash buyer?
13:19So I set up a separate company called Antimac Cash Private Equity.
13:23That's what funds this.
13:24And it has been our single biggest market share grab.
13:34And it's been great.
13:35We've been able to unlock a ton of commissions, been, I think, $20 or $30 million worth of
13:40commissions just for realtors over the last year.
13:42Right.
13:43We've done $600 or $700 million, soon to be $1 billion in just cash-to-keys deals.
13:48And the other component of it we then solved for was what we call buy now, sell later.
13:53So this enables somebody, as we all know, to buy that house before they have to sell
13:58their house.
13:58Because nobody wants to live in a hotel or a mobile home for three months.
14:02And while you're giving me the opportunity, I will plug, I understand now there's a lot
14:06of detractors.
14:07But we do an apples-to-apples comparison against all the majors and the third-party people
14:12that do this.
14:13And we're constantly trying to hone it.
14:16And we're still, I'd say, light years above our competitors in terms of that offering.
14:21Yeah, let's keep talking about it.
14:22Because we heard on stage this morning from Logan, Modashami, Mike Simonson, that it really
14:30is a tale of many different markets across the US.
14:34There are places that are still seller's markets.
14:37Sure.
14:37And there are places that are turning into buyer's markets.
14:40And so I would imagine that, particularly in the seller's markets, something like cash-to-keys
14:46can be very helpful in getting people into a home.
14:50Are you finding that cash-to-keys makes you more competitive in those markets that are
14:55still seller's markets?
14:56100%.
14:57Not only makes it more competitive, it is absolutely elevating the folks who would not
15:03even be in the market to be able to get the home they want.
15:06And that's a meaningful thing.
15:08We have a number of different stories we could share.
15:11But the one that I really love is we had a veteran who had lost out, I think, on 18 homes.
15:17Ugh.
15:18They bid on a house with 63 other borrowers.
15:20And the number's not right, but the order of magnitude is.
15:22And they won it.
15:23And we have this great.
15:24And that happens a lot.
15:25Right.
15:26I'd say the hardest part about our cash-buyer platform and our buy-now-sell-later platform,
15:31it's so different.
15:32It's very difficult to get realtors and buyers to actually understand it.
15:36And they're always looking for, excuse the expression, how am I getting screwed?
15:40Yep.
15:40And our thing is, we want the mortgage.
15:44Right?
15:44And as you were alluding to earlier with retention, we know that whether it be three or five or
15:49seven deals, we want to be on you with that entire journey.
15:52And so we're willing to make that investment up front.
15:55Some people make that investment by putting names on stadiums.
15:57Some people make that investments by doing commercials.
15:59We make that investment as a way so that our referral partners have a value-added proposition
16:05that's going to get them more loans and really make the American dream of homeownership a
16:09reality for a lot of folks who just, they're not in the game right now.
16:12Right.
16:13Well, I've loved this conversation.
16:15Really interesting company that you're building.
16:18Thank you so much for joining me today.
16:20It's been 100% my pleasure.
16:22Awesome.
16:22Thank you very much, Diego.