[00:00:00] Vince Passione: Welcome to 22 Minutes in Lending. I’m your host, Vince Passione. Today, I’m joined by Omar Jordan, founder and CEO of Coviance. Omar has over 2 decades of experience in the financial services industry and has built companies focused on improving the lending process for community banks and credit unions. His latest venture, Coviance, formerly LenderClose, is helping over 450 financial institutions modernize home equity lending through automation and data-driven solutions. Let’s start by learning more about Omar’s journey and what brought him here. Omar, welcome to the show.

[00:00:41] Omar Jordan: Well, thank you for having me. You make me, uh, look good with that intro.

[00:00:44] Vince Passione: There you go. Well, we- Your kids might disagree. Awesome. Well, listen, I always like to hear the founder’s story in the beginning. So tell me all about Coviance. Like you launched. You started, you launched n- uh, national le- loan closing during- Yeah. Great Recession. Yeah. So tough time to launch a new business. Yeah. What were you thinking of and why then?

[00:01:04] Omar Jordan: It’s funny. Yeah, I think I, uh, read a quote sometime, and I don’t know if it was Warren Buffett or, or, or some big investor, and they’ve always said, you know, “When, when you see people running out, it’s the best time to go in.”Yeah. Run to the fire, right? Right. And I just thought, boy, there was such a need around then because the recession would happen and, you know, title companies and what we called national signing services would close down due to volume and the staffing they had. I thought, “There’s an opening there where we can come in and really be strategic partner for a lot of the national title brands. “And then, uh, we did a lot of, uh, what loan closings, facilitate the closing of real estate loans, uh, and it was successful. We, we Uh, at some point, we were doing over 12,000 transactions, uh, a month, uh, just helping national lenders, uh, close their loans, uh, nationally. That was, uh that was a lot of fun.

[00:02:01] Vince Passione: What did you learn from your experience with national loan closings that helped shape what Co- Coviance is today?

[00:02:04] Omar Jordan: Uh, you know, I, I, I love our number one focus, which is our customer, and just continue to solve problems differently for them. Uh, you know, when I, when I launched in 2005 or 2015, LenderClose, now Coviance, uh, there was a gap in the market that we wanted to tackle. And I think, uh, for us, just focusing on the number one problem, uh, our customers face, uh, which is growth, continues to be the case, and navigating compliance. Um, but it’s, it’s been a fun journey to be on.

[00:02:40] Vince Passione: So when you, you said the number one challenge they face is growth, but are you helping them also acquire customers or you’re just automating the origination process for them? Oh, no question.

[00:02:54] Omar Jordan: Uh, no question, grow-A member acquisition, as credit unions would call it, and, uh, customer acquisition as banks would call it is a number one priority for our customers and therefore it becomes ours. So the way we think about the lending experience, um, w- we, we, we sort of think about how do we have and we have actual customers or members who actually brought on other members because they had such a pleasant home equity HELOC lending experience with our customer that happens to be a credit union, and they’re like, “Check this out,” right? And so, uh, if you provide this fintech-like experience, uh, for your members or prospective members, there’s no question you’re gonna continue to grow. Uh, people talk about, uh, their experiences, and that’s the number one thing. And I think one of the challenges that credit unions face today, outside of liquidity and compliance and risk and fraud, uh, the biggest challenge that we seem to forget about is how viral, um, your member experience has become. They’re talking about you. Whether it’s good or bad, they’re gonna share that information.

[00:04:03] Vince Passione: You said, “We built Coviance to resilient. Lending slows and rates rise, but that’s when the operational efficiencies we bring become essential, not optional.”So tell us what that kind of means in practice when you look at your business.

[00:04:13] Omar Jordan: Well, from a business perspective, uh, you know, as far as Coviance goes, we are our technology is fluid in, in such a way that can allow a credit union to shift from maybe a home equity loan growth strategy to a refinance or purchase, uh, mortgage type strategy. So, the resilience comes whether rates go up or down. And if you think about it, uh, historically, interest rates go up, what happens? People don’t refinance, don’t stop buying homes, they start to invest in the current homes that they have. So home equity loan growth goes up. When interest rates go up, what also happens is credit card interest rates go up, auto loans critic- uh, interest rates go up. And so your credit card that was $10,000 that had a $300 payment on a monthly basis as a borrower or an individual now went to $400, $500, $600.So that allows you to or forces you to think about, “How can I consolidate that debt?” And so home equity loans becomes the number one and is the number one consumer-requested loan product today. Uh, that said, demand goes up. What happens to credit union business?

[00:05:43] Omar Jordan: Their turnaround time goes from, you know, 30 days, 45 days, 60 days. You have members exodus, you have fintechs coming into the space, and so, uh, efficiency is n- is really not an option. And it’s not. It doesn’t just help you have an better ROI and a faster path to revenue and growth, but, uh, as I said, it’s that member experience is so impactful to really the growth strategy for the credit union, any credit union, any bank, any fintech. If you don’t have a member, a great member experience or onboarding or borrower experience, forget about it. You’re irrelevant.

[00:05:54] Vince Passione: So let’s go back to the product.

[00:05:55] Omar Jordan: Yeah.

[00:05:57] Vince Passione: B- Break it down. Where does it start?’ Cause we talked about customer member acquisition, and where does it stop in the process for a typical typical credit un- or bank that you’re- that you’re doing business with?

[00:06:08] Omar Jordan: Yeah. I love that question. Uh, to simplify it, really, our- our engagement approach, uh, Vince, is very consultative, so it starts with identifying and aligning with the credit unions on their key business objectives. What is it that you’re trying to accomplish? Don’t tell me what you wanna do. Tell me what you wanna accomplish. Mm-hmm. And from there, because we’ve done it so many times and beautifully, uh, with our customers and had a lot of success with some of the largest credit unions and the smallest credit unions, from there we help design a process, and in some cases, really challenge their policy and rebuild the policies, uh, with the number one focus to significantly reduce friction and cycle time. Um, and- and- and that being the number one focus helps us drive, uh, the number one, you know, KPI for success, which is member experience.

[00:07:02] Vince Passione: I gotta imagine that the number one KPI is speed, isn’t it?

[00:07:04] Omar Jordan: No, it’s- it’s beyond speed. It’s confidence. It’s, uh, uh you know, member experience is- is- is beyond how fast do you move. It’s how do you interact with your member? How much information are you giving them? Do they have to call you and inquire about, “What’s the status of my loan?” Uh, you know, those are 1995 problems that we’re trying to solve with our- with our customers. So being relevant isn’t necessarily about speed. It’s about trust and confidence and just the ability to respect the member’s time, too. Mm-hmm. It’s as- as simple as, uh, you’re- are you asking me to fax or email documents, and who does that? Who- nobody has a scanner, right? And so what- what capabilities do you have as a credit union to make my life easy? If I wanna apply for a HELOC or home equity loan, Vince, and I’m on their online application, uh, that most of ’em have basically what most credit unions have done is taken their mortgage process, copied and pasted it into a HELOC and home equity loan process. And so if that loan application is gonna take me a half hour, I’m done. For a HELOC loan, it should be, “What’s your name? What’s your address? Okay, great. Here’s your offers. “It’s that simple. So why are we complicating it? So speed isn’t necessarily the- the number one factor. It’s- it’s- it’s a comprehensive approach to, what is the problem we’re trying to solve?

[00:08:19] Vince Passione: When you look at- at Coviance, are you more of a tech firm? Are you more a financial firm? Are you a hybrid? Are you a tech-enabled services provider? How do you define Coviance when you’re talking to an investor?

[00:08:29] Omar Jordan: Our focus is to provide the technology and the business outcome that our customers desire. And with that, there’s a heavy focus on technology. So we’re- we’re absolutely a tech firm, uh, first. We’re a fintech, right? Um, we’ve got about 68 employees, and, uh, most of them, or, you know, you think about it, it’s- it’s split in half, most of them are focused on product, innovation, solutions, integration, implementation. And we’ve got the other half of the business, which is sales, marketing, and, you know, customer success. I think we’re one of the few fintechs around that have a tremendous amount of investment made for post-transaction. So we onboard a customer. We, uh, bring ’em on.W- it’s not sign and, you know, set it and forget it. No, it’s- it’s a constantly consultative relationship approach, where we are handholding them throughout the entire journey of, um, you know, their relationship.

[00:09:29] Vince Passione: So let’s- let’s switch. Let’s talk about the land- the market landscape and some trends, so- Yeah. Researching for the call, w- I took a look at this stat and said, I think it was- it was CoreLogic said that April housing starts hit about 1.36 1000000, which is up about 4.5% from last year, and I think some of that’s multifamily. Mm-hmm. Um, but also, I thought the part that probably had a bigger impact on your business and the credit union’s business is that most homeowners gained an average of about $28,000 in equity over that 12-month period. So that seems like a big lending opportunity. Is that driving do you see that driving the business in 2025?

[00:10:04] Omar Jordan: Yes and no. I think there’s a massive opportunity our customers, uh, you know, or prospective customers, banks and credit unions specifically, are- are missing out on, and so I’ll touch on that in a minute. But you’re right. It’s, uh I think they’re the average home buyer going into or the average homeowner going into 2025 had about $313,000 worth of lendable equity. Uh, the challenge that these buyers have or these homeowners have, uh, is that there’s $1.2 trillion in what we call unsecured debt. So typical, you know, your credit card revolving credit, that interest rate is a 22% revolving interest rate on, on a, on a credit card. That’s never gonna get paid off, right? And so the, the, the easiest path for these borrowers, for these members or prospective member, is to do a debt consolidation loan via home equity. So the demand for home equity is on the rise. What we’re seeing is, um, s- some of these homeowners are not choosing credit unions, um, as their primary, um, financial institution or primary lender. They’re going to fintechs to do a lot of these loans. Why? Because they have more flexible ways to interact with. They have, um, better user experiences, and they’re able to give them maybe, um, a stronger or higher loan-to-value, uh, that allows them to consolidate a lot of things rather than conservative credit unions. So the answer to your question is yes and no.

[00:11:34] Omar Jordan: I mean, we’re seeing some credit unions, and I’m really doing a general brush here, a wide brush. Uh, but generally, credit unions and community banks are slow to react. Their culture is more reactive than proactive. And so, but our mission is really to help our customers divorce the mindset that they are in the business of managing risk. And I want credit unions and community banks to start to think about we are in the financial intelligence business. And so what does that mean? That means we’re no longer gonna be transactional. We wanna be relationship based. We wanna leverage advanced data analytics to really make decisions for personalized offers. So, uh, that’s what I wanna see out of credit unions. The good news is there are fintechs and partners out there, like Coviance, like a lot that we know of including, uh, LendKey that are really great partners and wanna help you do this. They can’t do it alone. No one can. Right. You’ve gotta figure out a way to partner with fintechs in order to move that needle forward.

[00:12:38] Vince Passione: What do you think of, of things like Stablecoin? There’s a lot of discussion, especially in the credit union space. Like, I saw Nick Evans, right? He did a post on LinkedIn about, about Stablecoin, right? Nick from Circle, there have been a couple of runs at this. Even the chairman of the NCUA seems to be interested in Stablecoin. There’s not a lot happening yet, but is that something that’s on your radar when you think about technology and where you take Coviance?

[00:13:03] Omar Jordan: Uh, potentially, if you think about what’s the fastest way to disperse and fund a transaction, right?Um, how do we move money faster once the, the loan is signed and then now it’s time for funding. And, you know, and, ’cause wires are expensive, right? And so how do you get, how do you make a payoff transaction a lot faster so that you’re, it’s, you’re not accruing interest on a daily basis? How do you get the borrower the money faster so that they can, uh, get the contractor, you know, starting on the pool or pay off their debt a lot sooner? So, there’s, um, there’s a lot of ways that could be very, very helpful. And I think I’ve been kind of keeping an eye on that for quite some time, even before, you know, I think, uh, when XRP was, was a thing, which was, uh, sort of like almost as stable as, uh, as the dollar. But that changed later on in life. But, uh, that’s, that’s, that’s gonna be really fun to, to watch for. And I can see a lot of payment technology platforms really starting to adopt some of that so we can move a lot faster.

[00:14:03] Vince Passione: Going back to just the general product. So, you know, there’ve been a couple of products out there, like Symmetry created this piggyback or they, they popularized it. I’m not sure if they created this- Yeah. Piggyback HELOC. Um, there’s hybrids now that people are talking about. Can you talk a little bit about just, not the technology, but product innovation for the consumer in this space? We have seen a lot.

[00:14:24] Omar Jordan: We have seen a lot. And, uh, you know, some I have a strong opinion on. It’s, uh, you know, I keep going back to would I ever do that as a borrower? And some yes, some no. But there are some really cool of an innovation happening in the HELOC space. You’ve got companies that are coming out with, uh, a debit card or credit cards attached to the home equities. One of the, one of the number one problems that credit unions face post-transaction is utilization- Mm-hmm. right? And money movement from the line of credit to their checking account, to the borrower’s checking account. And so, uh, it’s been kind of fun to see a lot of, uh, companies pop out. And some credit unions have done this, and I don’t know if it’s been successful or not, where they actually attach the HELOC. So you’re at Home Depot, you’re doing your deck, boom, swipe. Here’s utilization. Starts to go up. The other part of it, I’ve seen a lot of home equity HELOC programs with fintechs coming into the space that’s, uh, that come in, you know, without you having to have a monthly payment per se. So an innovative product that just attaches a, a loan on a property, interest rates accumulates.

[00:15:28] Omar Jordan: Uh, and, and then some of them come in with, uh, that, that’s sort of like an unsecure debt type where they don’t actually put a lien on a property. But when you sell your home, you owe them a certain percentage of the transaction. So, uh, you know, I don’t know what consumer demand is for a lot of that. I think your typical consumer is gonna just n- early on in the process is kind of like adopt the old way of transacting. Um, and understanding there’s a second lien and things. But they, they, there’s some borrowers out there that li- like to dabble as long as they understand the legal terms of, uh, of XYZ. Um, but it’s, it’s fun to watch the interest and the market in this home equity HELOC space, and it’s not going away anytime soon. As long as rates stay where they’re at or maybe drop- That’s right. A little bit, there’s still gonna be that high demand for years to come.

[00:16:22] Vince Passione: No, I agree. I think the rate environment is gonna drive a lot of basic- Yeah. product innovation to, to find ways to really help the consumer really use their home as an asset and use it correctly. Let’s switch back to tech. So I can’t, can never get off these podcasts without talking about AI. Yeah. Uh, so, so, you know, how, how do you view AI i- in your business, br- a- and, and how is it gonna change Coviance?

[00:16:49] Omar Jordan: I think, so there’s, there’s a lot of well, it’s, it, it became a buzzword, and, uh, and I feel like some of it is misused. Um, and, you know, it, it’s AI should never be about If you’re looking to implement AI for efficiency reasons, more power to you, but it’s not necessarily entirely about that.It should be about your, your, your level of confidence to be able to really understand the data that’s coming back and the data that’s being deployed out. Um, and, and here, I can maybe elaborate a little bit more on that. Uh, so, t- to me, the emphasis is beyond efficiency. It’s more strategic, and the value it brings to speeding up task isn’t necessarily about speed or cutting cost. Um, I feel like it’s, like I said, the, the, the multiple, the, the multiple is in, in sort of the confidence of it. So, uh, think about making better decisions, uh, making faster decisions- Mm-hmm.uh, more informed decisions with greater confidence. And from a lender perspective, you use AI to assess risk more accurately.

[00:18:03] Omar Jordan: And we’ve seen folks like ZestAI come into this space, you know, reduce uncertainty for loan approvals. From an underwriting perspective, you’re looking at it for consistency. Uh, from an executive perspective, you’re looking at it from an analytics, uh, strategic, how do we move certain investments here to there? And if I’m a customer, um, I’ve got a, you know, I’ve got personalized offers in front of me by leveraging AI. Uh, so, so that’s the multiple that we get out of the efficiency model for AI. So, you know, act faster, make, take smarter risks, and just trust the process to ultimately drive growth, innovation, and customer loyalty.

[00:18:44] Vince Passione: As you look ahead, what’s next for Coviance in 2025, 2026?

[00:18:52] Omar Jordan: Yeah. Well, growth is the number one thing for us, and, uh, you know, we, we, we wanna focus on how can we bring on as many customers as we can and provide the most amount of value for those customers? Um, and historically, you know, we don’t have a churn problem. Uh, it’s, uh, less than 1%.Uh, and so once we, uh, get in with our customers, or, or and that’s what I love about the industry. It’s, it’s, it’s very relationship, and it’s, as long as you continue to provide value for your customers, um, there’s not a lot of churn. And so, cultivating relationship, building relationship, identifying problems for our customers and helping them solve it is our focus. And so, that’s gonna continue to drive our growth, and I think this year, we’re gonna experience 30 to 40% year-over-year growth. Next year, we project the same. Uh, and as I said, you know, being EBITDA neutral and positive, uh, we’ll continue to be focused. So in terms of innovation, we’ve got a lot of cool things happening behind the scenes, so more integrations happening, uh, more product, more innovation, investments into AI, as I mentioned. Uh, it, it just continues to be a fun time, man. There’s never a dull moment in here. Um, and just, uh, it’s fun to get up.Yes, it is.And, uh, and IBeing, being, uh, being EBITDA positive makes it easy to get up in the morning.

[00:20:05] Vince Passione: Yeah. Yeah. I’m sure. So final thought, what’s one trend in lending you think people are underestimating right now?

[00:20:19] Omar Jordan: I think credit unions and community banks specifically, they are underestimating the amount of FinTechs that are non-banks and non-credit unions that are coming into this space. Mm-hmm. Uh, it really should freak you out. Uh, if, if you’re an executive at a credit union, uh, you should really start to pay attention to what’s happening in that space and the amount of volume and customer engagement that’s happening outside of that credit union. It’s been happening, it’s been talked about, but we’re seeing it a lot more now, uh, e- especially with private equity, uh, and venture capital really having a massive interest in lending. And so, uh, it comes down to, uh, a lot of things, but the number one thing to drive the organization forward, it’s decisioning. It’s just making a leadership decision to drive stage, or change. And I think that’s what you and I face every day. It’s, uh, credit unions have a lot of problems-but the number one issue they’ll continue to have is remaining relevant. And if you’re not making those decisions to drive technology-you’re gonna be irrelevant.

[00:21:38] Vince Passione: No, I think the number is, is like 10,000 FinTechs, and I think last count, there’s probably like 4,700 credit unions. Yeah. Um, and, and not all of those FinTechs are partners. Uh, some of those- Oh, yeah, competing Fin- Absolutely. Absolutely. Yeah. Yeah. I’d add the other is, understand the difference between someone who’s your partner and someone who, who’s your competitor, ’cause we, we, you covered that earlier, right? You know, how do you buy loans from someone that has a balance sheet that goes after your customer after you buy the loan? So- Yeah. uh, makes sense.

[00:22:00] Vince Passione: Well, listen, Omar, that’s great. Uh, that’s all the time we have for today, so thank you so much for joining us, and I really do appreciate you sharing your insights both on the industry and about Coviance. For our listeners, make sure to subscribe so you don’t miss the next episode of 22 Minutes and Lending, and we will see you next time. Omar, thank you so much.

[00:22:15] Omar Jordan: Thank you for having me.

[00:22:17] Narrator: Thank you for listening to the 22 Minutes in Lending podcast. We hope you enjoyed today’s episode. You’ll find links to any resources mentioned in the show notes. If you’re enjoying our show, be sure to subscribe and leave us a 5star review.