The Future is Now: “An AI powered mortgage company designed to get people out of debt” with Karl Jacob, CEO of LoanSnap
Our goal is to help people make smart money decisions. Americans lost $58B in 2017 alone because they didn’t move their credit card debt at high interest rates to their home loan. If our technology can automatically help consumers visualize their financial situation and show them what their options are, including how they can consolidate debt into their mortgage, the more people can be debt free and start saving money each month.
I had the pleasure of interviewing Karl Jacob, CEO of LoanSnap, the mortgage startup that uses artificial intelligence to help people get out of debt. As a serial entrepreneur, Karl has built, advised and invested in companies for the last 20 years. Across his various tenures as a startup CEO, Karl has raised 23 rounds of financing from investors, and many of his companies have been successfully acquired.
Thank you so much for doing this with us Karl! Can you tell us a story about what brought you to this specific career path?
My friend who owns a mortgage company was interested in my opinion of the company and the industry itself. Rather than taking what my friend had told me directly about the company, I wanted to see first-hand how a mortgage is made. So, I spent time with underwriters, processors and loan officers to see how they make a mortgage for their customers. I came back disappointed with the current state of the mortgage industry.
The loan officers I observed were focused on selling as many mortgages as possible as fast as possible — a complete pressure sale, not consultative whatsoever. This was compounded by the fact that these loan officers had no technology to make this process better or more efficient. The mortgage space was a hit and run industry — hit the consumer with the lowest interest rate possible, which is often the worst option, and leave them with no support for the future. I became extremely curious as to how I could change this industry and help consumers
Can you share the most interesting story that happened to you since you began your career?
I was at a retreat for company founders on Necker Island, a beautiful spot in the British Virgin Islands owned by Sir Richard Branson, founder of Virgin Group and a major investor in bold-vision technologies.
After spending the day kiteboarding, I was walking in to grab lunch when I looked over and saw Richard Branson sitting by himself on a couch. I decided it was time to take my opportunity. I made my approach and started by talking about our shared love of kiteboarding.
Very gradually, the conversation turned to business. When I told Branson I was developing a technology that would disrupt the trillion-dollar-plus mortgage industry and would also help consumers, his ears perked up. He told me that as the owner of several mortgage businesses, mainly focused in the UK, he’d love to learn more about what I had in mind.
After subsequent conversations, Branson became an investor in my company, and I learned an important lesson from this experience. Opportunity is where you find it. And if you’re looking for investors to back your startup company, it pays to be bold.
Can you tell us about the “Bleeding edge” technological breakthroughs that you are working on? How do you think that will help people?
Our company uses AI and machine learning to analyze a person’s money situation in seconds and provide a variety of options that will help a person save money and start achieving his or her short and long-term financial goals.
Many mortgage lenders are doing home buyers a disservice by pushing low-interest rate loans without first understanding their full financial picture. Our team believes there are multiple factors to consider: income, credit card debt, future financial goals, and even external factors from the U.S. financial environment. These are considerations that often get overlooked by digital providers.
That’s why we keep our technology simple and convenient for people. Users can download our app, and our tech will pull applicable personal data either by scanning the users’ driver’s license or from just a few pieces of information. From there our technology will identify the best-matched loan options from thousands.
How do you think this might change the world?
Our goal is to help people make smart money decisions. Americans lost $58B in 2017 alone because they didn’t move their credit card debt at high interest rates to their home loan. If our technology can automatically help consumers visualize their financial situation and show them what their options are, including how they can consolidate debt into their mortgage, the more people can be debt free and start saving money each month.
Was there a “tipping point” that led you to this breakthrough? Can you tell us that story?
After determining that the mortgage industry was desperately in need of change, I recognized that the other platforms looking to make this change all had the same idea — to get mortgages faster. But what they didn’t realize is that mining consumers’ data from multiple sources, such as credit reporting agencies, and removing the administrative work off their shoulders, we could create not only a more efficient process, but a less arduous process for consumers.
This tipping point also led to an interesting after effect. By continuously mining this data, with consumers’ permission of course, we were able to keep cleaner and better data, while providing consumers with a better overall understanding of their money situation. We’re able to continuously ensure that a consumer has the best mortgage option to meet their needs now and in the future.
What do you need to lead this technology to widespread adoption?
The key to widespread adoption is a shift in mindset. Most buyers choose a lender primarily based on the lowest rate for a conventional 30-year fixed mortgage. But, what about other outstanding debt like credit cards, student loans or car payments? Instead, a shift in mindset is necessary so that consumers are open to alternative options, such as debt consolidation loans that let you combine other bills with your home loan into a single payment. This reduces monthly expenses and can save hundreds of dollars a month and thousands of dollars a year.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
Years ago, before I founded my current company LoanSnap, I was giving a presentation to venture investors about a technology I had launched. I already had a lead investor for the round I was raising, but I was meeting with others to secure additional backing.
I was pitching an investor who seemed lukewarm and hesitant. Instead of working harder to please this investor, I took the opposite tact.
“I don’t think you’re ready to invest in this space,” I said. “I’m not sure you’re ready for something as innovative and fast-moving in the consumer space as we are.”
If my goal was to stand out, I definitely accomplished it. The investor assumed our lead VC had put me up to this, trying to scare other backers away from a lucrative deal. This wasn’t the case. I had simply decided to take a bold approach to fundraising.
In this case, it paid off. That investor went on to lead my company’s Series A round. I’ll always be grateful for the way he pushed me to be bold and confident in my vision.
How have you used your success to bring goodness to the world?
My time scaling companies from start to finish has left me with plenty of knowledge and lessons in the entrepreneurial space. I use these experiences to advise other company founders and help them achieve their vision and push their ideas to the next level.
You are a person of great influence. If you could inspire a movement, that would bring the most amount of good to the most amount of people, what would that be?
Most consumers don’t realize that they are losing money to high interest rates and dumb home loans. My goal is to inspire consumers to take a closer look at their finances and use the tools available to them to strengthen their financial future.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“Never send a suit to do pirate’s job” — Steve Jobs
As the founder of an early-stage company, it can be difficult to stand out from the crowd. This is why being a pirate is so important — because in today’s funding landscape, more and more capital is being given to big players while newer, smaller startups are failing before even making it to their Series A. CEOs need to know when to take risks and when to draw back when working with investors in order to successfully raise capital.
That’s why I advise company founders to find opportunities wherever they can, and to not be afraid of being bold. The last two decades of my life would illustrate that this approach works. My company LoanSnap, for example, is mounting a challenge in the multi-trillion-dollar mortgage market, and VCs like the boldness of our mission.
How can our readers follow you on social media?
Our readers can follow us on the following channels:
Facebook: https://www.facebook.com/loansnap/
Twitter: https://twitter.com/LoanSnap
Instagram: https://www.instagram.com/loansnap/
LinkedIn: https://www.linkedin.com/company/loansnap/
Or if they’re interested in beginning a new financial journey, they can download our app and get started: https://apps.apple.com/us/app/loansnap-refi-mortgage/id1212654581
The Future is Now: “An AI powered mortgage company designed to get people out of debt” with Karl… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.
