One-On-One With New Snapdocs CEO Michael Sachdev

Michael Sachdev was recently promoted from president to chief executive officer at Snapdocs and he says his secret to success is being a lifelong learner.

The California-based company powers millions of digital closings each year by combining an open platform, patented AI technology, a settlement network, and a team of industry professionals to enable lenders and title companies to automate the process, according to a press release.

In his new role, Sachdev succeeds the company’s founder, Aaron King, who is taking on the role of executive chairman. As CEO, Sachdev will oversee all company operations and business strategy, with input and oversight from the company’s board.

Sachdev recently sat down with editor Kimberley Haas to talk about the promotion and his background. He graduated with a degree from Columbia Law School and worked as an attorney before entering the business world.

Haas: There are certain ways that a law school degree can help you look at things maybe a little bit differently than your colleagues. So I’m wondering, how has that helped you in your career?

Sachdev: Lawyers are taught to break problems down to their most constituent parts so that they can find where a process breaks or where a gap in logic exists.

I feel that I learned to do that in law school and in law practice. And that really has served me and continues to serve me to this day.

Before I got on this call, I was helping someone on my executive team write a memo and the memo wasn’t clear. It was in the process of breaking down parts of the problem that we exposed that there were actually gaps in our thinking that we then had to go chase down the answers to, which you don’t get too often unless you’re taught to break problems apart. So I rely on that training every day.

People say lawyers can’t do business. I think that’s kind of right and wrong at the same time. A lot of lawyers don’t think commercially about investment outcomes or ROI, which is the kind of thinking that business people need to do. But that clear thinking, that clear organized thinking, I think is valuable just about everywhere.

Haas: So when you came on and you joined the Snapdocs team as president in 2021, what was it like to take on that role and those responsibilities?

Sachdev: Despite all of my saying that I’ve spent the last 20 years in and around consumer finance, I had a big learning curve in mortgage and I still do. It’s been two years and I have learned a lot.

Most of it has been really technical around this exact kind of lending and the sort of alphabet soup of acronyms. Every industry has their acronyms and we have ours. Really learning the lingo has been a lot of it.

Learning the loan types and learning the processes, learning the laws, I feel that I’ve got a mental structure, like a pre-existing mental model, to kind of get up to speed on those things quickly because I’ve spent time in spaces like this one. But no two spaces are the same.

Haas: How have you overcome those challenges?

Sachdev: I’m like a lifelong learner. When I want to know something, I get incredibly curious about it.

We have many people inside of Snapdocs who are 20-year mortgage veterans. And I spent many hours in the first few months with them, “Teach me this, explain this to me. Why is it this way? Why is it not this way?” Which I think is the benefit of having someone from the outside.

I subscribe to a lot of the industry materials that are circulated every day. And I read constantly. I wake up every day, usually between 5:30 and 6 a.m. Anyone on my team knows that they’re probably going to get an email or something from me about an article I read or something I’m thinking about. And I don’t expect a response at that hour. But I am reading every morning, usually for an hour.

Haas: Do you find that is helpful, to jump in that way and get that reading going early in the morning before a lot of other things start happening and before a lot of other wheels start turning?

Sachdev: You’re getting me now at 4:15 p.m., and I sat through a 90-minute presentation on HR benefits today, which is just part of the job. It’s like been a long day.

For me to sit down and read about something I don’t know or understand now, I’d probably glaze over. I’d probably start thinking about something else. The kids would come home, I might be distracted. It’s much easier to learn in the morning. And this is something that I learned about myself.

Haas: What’s it been like since you took over as CEO? That’s a pretty exciting transition for you and your family.

Sachdev: Yes, thank you. I wouldn’t say it’s been a lifelong goal, but it’s been a goal for many years.

I wasn’t the kid who in college was like, “I’m going to be a CEO.” I didn’t really know what I wanted to be. I think I was the classic person who goes to law school because they don’t know what they want to do. I think a lot of people do that. But I have followed my curiosity just wherever it has taken me. And it took me in-house, it took me out of law. It took me into business.

It also took me into leadership. It took me into a C-level role. And when I found myself owning a budget, and managing and mentoring and inspiring a hundred people, I really thrived. I felt like that was where I wanted to be. And that was one of the reasons I left that role and joined Snapdocs as president. I wanted even more of a leadership challenge.

A lot has materialized in our market and in our society. It’s been a bumpy road, I think, not just for us, but for every tech provider and certainly every lender. But it’s been really fulfilling. I love the team and the team has rallied around me, around the business, and I feel that loyalty and that support.

Haas: Tell us about what it’s like to have such a big hand in the market, what the responsibility is.

Sachdev: So we just haven’t seen a market like this in a very, very long time.

What that is doing to borrowers is a couple of things. They’re sidelined because they can’t afford the payments. Obviously, there are people who can afford anything, and there are people who will struggle. But what we’re seeing is a huge shift towards most people who can’t afford the payments, the payments that come with buying a new place at an 8% interest rate after a period of massive housing price inflation.

And then we have on the other side of that the housing stock in the United States held by people who are now in two and a half, 3% interest rate mortgages who have zero incentive to sell those homes because what are they gonna buy?

I really feel it’s the job of the technology community to help lenders become more efficient and more profitable so that they can support lower rates and better outcomes and more employment and all those things. Because this industry is really struggling right now.

Haas: So tell me a little about those goals as far as improving the origination process and driving down costs for those companies.

Sachdev: The mortgage process has, at a really high level, kind of three steps. There’s the intake step where the lender, the originator, and the borrower interact. The technology that’s used for that is referred to as the POS, point of sale.

That is really a one-to-one relationship where a borrower is interacting with a lender sharing information about themselves, like their employment and credit score, and getting information back, like, “What rate are you going to offer?”

That information is being vetted in the background, and at some point, they’re approved for a loan.

Then, the second step is the loan origination process, which is the LOS, loan origination system. That’s where the loan is effectively created. And at that point, when you’ve now got a set of loan documents and you’ve engaged with title, and you’ve done an appraisal and these sorts of things, now you can move into the closing.

That’s the third step. That’s where we’re focused.

The closing is very complicated because you go from what is a one or two-party kind of moment into a multi-party moment where the borrower, lender, and title have to coordinate.

All of a sudden you have all these emails and calls, “What about this? And what about that? And we found this thing on the title.”

There’s always these issues and they create so much complexity. And that complexity is typically resolved by a ton of checking. It’s people looking at documents, double checking, and comparing to another document. And what ends up happening is because we’re human, there are errors and errors require rework.

What we have set out to do is to automate as much of that process as possible. And so we’ve been chipping away at it. We built a notary scheduling platform. We built a lender closings platform. We’ve recently tied the two together so that you have end-to-end visibility.

If the documents need to be updated, they can be updated automatically in real-time without someone calling and saying, “I need new documents.” It’s actually just all on the platform, which makes it much more seamless. So this is the kind of automation that we’re working towards.

Recently, Snapdocs released a 2023 industry report on the state of digital closing adoption.

A survey of 100 top mortgage lenders, including banks, independent mortgage banks, and credit unions, showed that 74% of lenders have invested in eClosing technology.

But while lenders continue to prioritize eClose technology to improve the borrower experience, increase efficiency, and achieve cost savings, only 28% of lenders are realizing the full extent of these benefits, according to the report.

Sachdev said in a statement for the report that as lenders incorporate full eClose technology, the per-transaction savings increase by hundreds of dollars per loan.

Research performed by the company suggests mortgage lenders can save more than $400 per loan by using eClose technology, according to a press release.