Podcasts

Inside Lower’s landmark year: Dan Snyder reflects on 2024

January 16, 2025

This week on Power House, Diego sits down with Dan Snyder, the CEO of Lower. This past year was a busy year for Lower amid their acquisition of both Neat Labs and Thrive Mortgage.

Back in July of 2024, we welcomed Lower’s Chief Strategy officer, Craig Montgomery, to give us the low-down on Lower’s plan to become a top-five mortgage lender. Today, Dan continues that strategy conversation with Diego by discussing how the acquisition of Neat Labs is bringing Lower toward their 2025 goal of developing an end-to-end proprietary tech platform. He also reflects on the success of their Thrive Mortgage acquisition and discusses the challenge of integrating teams while also supporting your producers.

Here’s what you’ll learn:

The acquisition of Neat Labs is a strategic move to enhance Lower’s technology stack.
Lower aims to develop a proprietary tech stack rather than becoming a software provider.
Cost efficiency is a key focus, and they expect to see significant reductions post-acquisition.
Transparent leadership integration is essential for successful acquisitions and team cohesion.
Effective communication can alleviate fears at all levels during the acquisition process.
Coaching and support for producers are central to Lower’s growth strategy.

Related to this episode:

This episode transcript below has been edited for length and clarity purposes:

Sanchez: You broke the story of your latest acquisition with HousingWire earlier today. Could you tell us more about the Neat Labs purchase?

Snyder: Today we were in the news for some of the mortgage company purchases we did last year. But, we’re really excited about this. It goes back to just trying to differentiate and redefine how to do a home purchase or refi faster, better, and cheaper for the customer and the originator.

We have some really good tech on the front end. But the guts of it — the LOS, the pricing engine, etc — were so reliant on the third parties, we kept thinking, “Is there a better way?”

And there really are not very many options out there. I had been kind of thinking about it while talking to people that were in the know, and I found Neat Labs. I didn’t really know that much about them. But they had a pretty good story and a longer journey than I had thought of.

They started in 2015 with the idea of really disrupting an industry that was mired in old tech. So, they started with building out point-of-sale. Then, they built out the whole LOS. Then, they built out a whole pricing engine. They were licensed, had originators, and the whole shooting match. Then, rates spiked up and they pivoted. Neat Labs was looking for an acquirer, and we made it happen.

We’re really excited about the future. It’s not like we’re going to be able to hit a button and start using it overnight. It’s going to be a gradual introduction into our existing environment. We’re hoping by the end of the year, 90% of our loans are going through that system. Maybe some of the niche stuff is still in our legacy, but it at least moves us forward with controlling our own destiny, which is really what we were hoping to do.

Sanchez: That’s a lot of the tech guts at a lender right there, in one acquisition. And, it’s interesting because as a company that has been built through several acquisitions, I imagine there’s a debate each time you make an acquisition.

How do you think about that maybe as you make more acquisitions in the future, or even dealing with your previous acquisitions?

Snyder: I think it should. We really were built organically — same store sales growth for years. Then, we just sit with a pretty unique value prop. It’s my co-founder — Mike and I. We’re still owner-led. It’s just that we have pretty big partners behind us that are, while they’re a minority, deep pockets, and they really want to see us change the industry. SoFi is an investor. Veritex Community Bank is an investor. They’re publicly traded on the NASDAQ. And then there’s Excel, which is a big Silicon Valley venture capital firm. When we’re doing our plan, we had never really acquired anybody until like last year toward the end of 2023 into 2024.

It started to make sense because you had retiring owners that did a really good job, like the Joneses at Thrive Mortgage. We said, “Hey look, maybe we can roll in what you’ve built and we’ll take good care of it. And, we were able to do that.

Now, how do you integrate it successfully? There’s a people side, an operational flow side, and then there’s the tech side. It’s not even if you. Everyone uses, say, Encompass. We think Lower LOS, which will be our own proprietary end-to-end tech, and it’s not tech over top of Encompass. It’ll be its own native cloud-based, task-based system. It’s pretty incredible, honestly.

Everyone will kind of move into that in our existing environment, alongside future acquisitions, echo hires — you name it.

Sanchez: How do you think about CRM with respect to the rest of that tech stack, which you’re going to now have in-house? Do you continue to partner around CRM, or are you potentially acquisitive in that area as well?

Snyder: We’ll probably partner, but I think what you’ll find is that our goal is to make it so seamless. And right now, a lot of these systems do well with connecting. But the more connections it includes, you get some level of disruption. If it’s your CRM is connected to the point-of-sale of Encompass, Optimal Blue, the pricing engine, your servicing platform, post-closing, and then if you introduce multiple CRMs and point-of-sales, it’s hard to have a lot of data integrity like knowing where that customer is in their journey.

That’s something we’re really passionate about. If we’re doing all these home purchases, their customers should come back to the originator for a refi and with our own end-to-end stack and maybe the best in class CRM. We should be able to do it at a higher efficiency rate than our competitors — or at least get into the level of what Rocket can do. That is going to be important for whether you’re coming to us online, or you’re working through one of our local offices.

Sanchez: We’ve seen other lenders that have built proprietary tech stacks that aren’t layered over something else. We’ve seen some of those lenders go to market and sell that tech stack to other lenders. Is that something that you’re thinking about?

Snyder: It’s gonna be a tech stack for us. We’re really gonna be committed to making sure we’re deploying first principles. We actually need to manufacture the loan as quickly, compliantly, and secure as possible and nothing more.

Encompass or SimpleNexus — they’re meant to be used by hundreds of companies. So, it’s hard to tailor it specifically. We’re not trying to become a software provider. That’s for sure. How do we make it more efficient?

I’ll never forget I was golfing at an industry event. And, one of the people was a technologist at Rocket. He had heard that Lower’s guys are doing some cool stuff. Two other big lenders were with me. And, this guy from Rocket was like, “you’ll never compete with us.” And we’re like, “why?” He’s said, “With Encompass, it’s a one-to-one. You can only get one person in a file. We can get, you know, 89 people in every single file — and it’s just by that sheer nature of efficiency.”

It’s part of the industry quagmire. You’ve got Encompass, and we’ll probably continue to use it for some loans because it can serve every single type. But, if you really want to think about what you do in 10 days, how do you crunch down on that cost?

We will be able to manufacture alone, better, faster, and cheaper because we’ll be able to deploy AI within the system. We’ll be able to have multiple people in the system. We’ll be able to have it web-based and task-based. The pricing engines connected into that. So, those are things we’re really excited about. It should help with our existing production and being a tractor to those that are a bit frustrated with the tech that they’re working off of.

Sanchez: The way I think about it is, yeah, you’re not beholden to Encompass or another one of the LOS providers. But you do need to build up that internal tech team — and engineers are expensive. So, where do you see those costs dropping as you build out this tech stack internally?

Snyder: Yeah, hopefully more, honestly. If you’re going to be a lender of size, most that use Encompass still have software developers that are working to make it better or connect the systems or try to do some level of innovation. Everyone’s doing that, plus you’re having to pay $140, $150, or whatever the price is per loan. Plus, you’ve got a point-of-sale that needs to make money.

Plus, you’ve got other connectors inside the system. There’s a lot of really good vendors out there that provide a solution within that tech that is either a user-based or loan-based — and it just keeps adding up. Then you take the credit cost. That keeps going up.

And so all of a sudden, we’re not far away from most lenders having to pay a thousand dollars to fund alone just with systems cost and credit, right? Yes. Are we going to have to have more software developers? Yes. We’re going to have to have vendors to support it for compliance and otherwise. But we are doing the math at scale, and it’s far cheaper to own it yourself.

Sanchez: You did the Thrive Mortgage acquisition about a year ago. And I want to talk more about that in a moment. Now that you are building what sounds like a pretty amazing internal tech stack, are you looking at other lenders that you can buy and attach to this neat tech stack?

Snyder: We’ve learned a lot after every one of the acquisitions we’ve done. We’ve done them all pretty well. But, it’s likely that the next one will do better. And not to say there is a next one, it’s just like the market hasn’t gotten any easier. Maybe you were contemplating last year “I could take some money off the table. Maybe my team would be better off with a larger company.” That’s the same for us. You’re certainly going to entertain that more than ever right now with the 10-year skyrocketing rates. It’s just a tough environment. So, we’re going to be opportunistic and keep leaning forward.

I also think that the number one question that I get outside of “Is it a good culture fit” is “How’s your tech?” “Is it going to help us do more loans?” “Is it going to help us differentiate and redefine?” Now, we’ll be able to say, “Yeah, we always have had a best-in-class front end.”

We’ve designed our own point of sale and our own document management for the bar experience, because that’s very lacking with some of the providers, in our opinion. Now, we blend that into our full end-to-end solution.

Then, we get a great, talented CTO as part of this. And Steve, who was the head of product at Maxwell, was also the CTO of Neat Labs. He is just a really talented person that probably needs more industry attention. When I got to meet him and our engineering team toured their system, I was just waiting for them to not like it. It was the exact opposite.

Sanchez: What do you think is the product roadmap or timeline for being in a place where it is a somewhat cohesive experience going from POS to LOS and integrating the capital markets engine into that?

Snyder: We think that it’ll be stood up. You know enough testing and piloting will be right. We’ll be ready by Q4 to start testing it. I’m saying 90% of our loans are going through it. So, that would be great. Maybe it’s a little bit longer. By the purchase season of 2026, we should be full-go.

Sanchez: That’s just really neat. Congratulations on that deal. I wanna talk a little bit about your last acquisition of Thrive Mortgage. From your perspective, now that you’re about a year into that one, what are some of the highlights and some of the lowlights of that experience? Pretty sizable deal.

Snyder: I think we did a good job at it. The hardest part has been the integration of people. For better or worse, we think better. Thrive had their CEO. Celine became our chief operating officer out of the gates. And that wasn’t part of the deal. It was just that she’s super talented. And we really thought it was a great move. And it’s been a phenomenal move. The list kind of goes on.

We approached it like the best person wins. And there’s a lot of folks from Thrive that are running big corporate roles with us — whether it’s from production to operations and in between. A lot of our talent at Lower is running things, and we’re all one company now. That’s how we’re really approaching it. That’s why I say it’s difficult because there’s a fear. Here, I underestimated the fear on our side. Like, here we are acquiring this company, and I felt like for sure that Thrive was going to be scared. How are we going to treat them? Who’s going to get let go? All that stuff. I didn’t think our team would be scared.

But it was kind of a fear of uncertainty, even if we did a lot of messaging and probably overly communicated. It all worked out really well. We’re so much better off. Every single originator joined, and it was a very meaningful move. I think we got territory that we weren’t a part of. We got leadership that’s fantastic. We got a ton of individual contributors that are just doing so well and brought a lot of shared best practices to the table to make us better. That’s what you really hope for instead of over only doing this for the production. It’s staying open minded and just trying to calm the fears down. That was probably the hardest part.

Sanchez: From the outside, I had a lot of admiration for this blending of the leadership team. HousingWire is fairly acquisitive as well. And, I know how challenging that can be. People develop their own ways of leading and doing things. And to mesh two things together, even if there is a good cultural fit, sometimes at the leadership level can still be difficult.

Do you have any tips for how to do that? How did your team gel together? Was it messy at times?

Snyder: Amir said this to me once: You have this messy middle. Luckily, it’s when you have really smart people that come together and there is a level of messiness, eventually. People don’t love chaos. Then, you start getting in this level of like: Let’s come up with a really good solid path forward. Even on small things, whether it’s branding, marketing, or recruiting strategy.

I tried as a leader to not be so prescriptive and let it gel. We’re adults. Everyone wants the best for themselves, their family, and the company in the end. Therefore, just take a deep breath and it’ll all work out. It didn’t work out in the first week. But, within 60 or 90 days, people were settled down.

All of sudden, Celine wasn’t the outsider anymore. They saw her work and put points on the board. And, what we focused on was points on the board. My advice is it’s no different than if Thrive would have remained Thrive, and Lower, can you be the best at the role? And, then everything else will fall into place, no different than in sports.

No different than at HousingWire. You guys acquire somebody, like a great prolific writer, Well, it’s not let’s just talk a big game and not put up points. So, that’s really what happened. Within the first 90 days, not even the first month, long-time team members of mine, and my partner Mike were like “this person’s the real deal.”

I’ve learned more in the last three weeks than I have in the last three years from Celine or someone like that. Then it’s like, okay, good.

Sanchez: Now, you mentioned Amir Sayed, your chief growth officer. You also recently hired Dustin Owen as your SVP of growth. What should these hires that you’ve made over the past year tell me about your growth strategy for Lower?

Snyder: You name two that are really, really well-known influencers in the industry. I think the way we’re shaping our leadership structure is very flat. We don’t have a ton of layers in between.

How do we support our producers? Well, it’s not going to be something no one needs to manage. If you’re in this industry, you’re pretty good. Let’s just be honest. So, you need support. What does that mean? Value created. And you bring in Amir, you bring in Dustin.

Dustin puts on a weekly coaching call that’s very prescriptive with our incoming LOs. And not new LOs, but those that are doing five deals a month that wanna get to 10. It’s very prescriptive. He just rolled out a 12-week challenge, and he’s doing these things. That, to me, is exactly what we’re trying to do — deploy the modern value that we can provide to our sales teams across the country.

Amir does the exact same thing, trying to get the $30 million producer to a $100 million producer. What’s the elevated level? Instead of having a Wells Fargo style of management structure, we’re anti that. We’re going to have producers in markets that can get them the tools and tech to let them cook. And then, let’s bring in strategic hires in growth to help create value that they may not have otherwise, or they may have to go outside to get it somewhere else.

Sanchez: You’ve built an internal team of really amazing coaches for your producers. That’s a lot of value.

Snyder: That was a big initiative. The second big initiative for 2025, which we’ll have some announcements here. It is going to be really like we’re delivering online and offline from a lead and marketing perspective. We’re providing value through coaching and how to get more referral partners, but also how to become a personal brand and influencer in your market. We feel like that’s super important.

The flip side is, do we help you become just a marketing juggernaut? And so, we have some stuff happening on that side of the fence that I can’t talk about yet, but pretty soon.

The Power House podcast brings the biggest names in housing to answer hard-hitting questions about industry trends, operational and growth strategy, and leadership. Join HousingWire president Diego Sanchez every Thursday morning for candid conversations with industry leaders to learn how they’re differentiating themselves from the competition. Hosted and produced by the HousingWire Content Studio.