Jon Maddux is the Co-founder and CEO of FundLoans, a wholesale mortgage lender that specializes in Jumbo Non-QM solutions. He was once an on-staff songwriter for Warner Brothers, writing music for bands like Smash Mouth and Plain White T’s. He then transitioned to the real estate and mortgage finance industry where he has been working for more than 25 years. Jon also runs We Drink Tequila, a handcrafted tequila subscription business and is the CEO of Drop Mortgage.
In this episode of the Smart Business Revolution Podcast, John Corcoran interviews Jon Maddux, the Co-founder and CEO of FundLoans, about how he built a company to help homeowners deal with foreclosures. Jon also talks about songwriting, Non-QM lending, and starting a craft tequila subscription business. Stay tuned.
Here’s a Glimpse of What You’ll Hear:
- Jon Maddux’s musical background and how he became a songwriter for Warner Brothers
- How Jon entered the foreclosure industry during the 2008 financial crisis — and his experience helping homeowners deal with foreclosures
- Jon talks about his transition to starting a new mortgage company and differentiates it from FundLoans
- How Jon fuses his artistic and analytical skillsets
- How the idea for a craft tequila subscription business came about and the challenges Jon has faced building the company
- The peers Jon acknowledges for his success and how to get in touch with him
Resources Mentioned In This Episode
- FundLoans on Instagram
- Jon Maddux on LinkedIn
- Relativity Media
- Chad Ruyle on LinkedIn
- Mish Talk
- Drop Mortgage
- Shiloh Caffrey on LinkedIn
- We Drink Bubbles
- We Drink Tequila
- We Drink Tequila on Instagram
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Rise25 Cofounders, Dr. Jeremy Weisz and John Corcoran, have been podcasting and advising about podcasting since 2008.
Welcome to the revolution, the Smart Business Revolution Podcast, where we ask today’s most successful entrepreneurs to share the tools and strategies they use to build relationships and connections to grow their revenue. Now, your host for the revolution, John Corcoran.
John Corcoran 0:40
All right, welcome everyone. John Corcoran here, I’m the host of this show. If you are new, if you’ve not heard this show before, then go check out the archives because we got some great episodes with smart CEOs, founders and entrepreneurs of companies and organizations, organizations ranging from Netflix to Kinkos’, YPO, EO, Activision Blizzard. LendingTree, OpenTable, and many more. And I’m also the Co-founder of Rise25 where we help connect b2b business owners to their ideal prospects. And my guest here today is Jon Maddux, he’s got an interesting story. He was once a on staff songwriter for Warner Brothers, he wrote music for bands like Smash Mouth and Plain White T’s. And after a bit of a change in the industry ended up in a real estate and mortgage finance industry where he’s been for 25 plus years. He’s also started another, a couple of other interesting companies, including during the mortgage crisis, a online website that helped customers navigate the hardship of foreclosure and short sale was something that I was involved in earlier in my career. So talk about that got a lot of national media attention around that. And now also has the tequila business, which is really fun. All of those makes so much sense country music, songwriting, mortgages, tequila, I mean, that’s, you know, you can draw a straight line between the three of those. So we’re gonna get into that.
And of course, this is brought to you by Rise25 where we help b2b businesses get clients, referrals, and strategic partnerships with done for you podcasts and content marketing. You can go to rise25media.com to learn all about it. Alright, Jon, such a pleasure to have you here today. And I want to dive into first, about 2008. Were financial crisis time, the entire economy is kind of melting down. And you actually you were a songwriter for for Warner Brothers, you are Nashville. First of all, how did you end up on on that journey? That’s a fascinating journey. It’s not that every day that you hear someone has a career like that, yeah, so
Jon Maddux 2:37
music was always a passion of mine from like, younger age. So around 15, I started playing guitar. But before that, I was playing piano, like my parents made me sit in practice when I was eight years old, with, you know, an older, like a grandmother teacher, and I just hated it, you know, practicing piano. And then, when I was 15, I like really started loving guitar and hard, you know, hard rock music and, and so I got, like, you know, super into guitar. And then I started like a heavy metal band and did that through high school. And then after that just continued to be in bands and bands. And that was kind of like where my path was going. And so music was just a huge part of my life. My mom’s a singer, my dad’s kind of a saw, right, they’re both songwriters, and they were younger and creative people. So I just kind of have that in my kind of in my world, you know, when I was younger?
John Corcoran 3:28
Yeah. And so you did that for a while. And were you doing mortgages at the same time? Or do you were okay.
Jon Maddux 3:36
Yeah, I was I was I was in like, the height of the mortgage peak back in 2004. And through six, like, I was kind of had my business on autopilot and was just not making enough money to where then I could just focus some time on music. And I had a recording studio at my house and I just put my music online, and a manager that was working at a huge film company, and they did music management as well. Named Lex Lipsitz. He found me online. I think someone sent him an email, my music and he called me one night and I was like, Yeah, I was like, it’s this real and he was from Beverly Hills. And he’s like, come down on you know, I love your music complete play some songs for me. And so he ended up getting me the deal with Warner Brothers. And he I signed to his management firm and which is Relativity Media, which is a huge movie producing company. And so that was a fun ride. I mean, I get to meet a ton of people, you know, along the way, and just be in rooms with people that you know, there were fantastic artists and writers. So it was a cool journey, and I never got any top 10 hits or number ones, but you know, it was a fun time to really put my craft to work and that people hear it and can do that.
John Corcoran 4:52
And the bands that you worked with any crazy stories about working with any of these bands, you don’t have to name which one’s the crazy stories came from,
Jon Maddux 5:01
I guess the one that pops in my head was I was sitting in a room with a band that definitely had a number one hit. And it was just the singer of the band. And they, the guy was, I’m pretty sure doing a lot of drugs. And we were writing and then he would jump on the drumset and bash away on the drumset. And then he come back and sit in the in the, you know, the little seat, and then we’d write like a little bit more than he’d go in the bathroom. It’d be back and forth. Yeah, I’m sure he was doing lines. And, and I finally call my manager, we were in this really amazing studio where like, you know, Frank Sinatra recorded, The Beatles recorded it’s right in Hollywood on like, Hollywood Boulevard, we were the only ones in the studio. And I finally call my manager like, and this was before they had a number one hit. And I was like, Man, I don’t think this session is going really well. And my managers, like, just finish it out, you know? And he’s like, we won’t do another one with them again, sure enough, like six months later, you know, we never finished the song that we set out to do. Sure enough, they had a number one hit. And I was like, man, like if I could have only just, you know, if that session would have gone better, you know what? You never know. Right?
John Corcoran 6:04
Right. Right. And so you’re, you’re, this is kind of like a crazy story. Like, you’re, you’re putting your music online. And this is the movement, mid 2000s. You said, I mean, that’s early days. Do you remember what platforms you were using? And what inspired you to put your music online before a lot of people were
Jon Maddux 6:23
doing that? I you know, it was like, I think it was a bra jam or something like that. It was just like a free platform, you could put your band in might have been MySpace, you know, you can put like three or four songs on MySpace. Yeah. So I think I had songs on MySpace. And I think back then I was about 29, maybe 30 years old. And I was like, I was just still on this, like, aspirations that I was going to be in a, you know, I was going to start a band and be and make it in. So like that I was more like, around me as an artist, you know, at that point, even though it was like our priority past the age of where, you know, like, I could make it but you know, I was like, Yeah, I’ll do writing. And they offered me a pretty good contract. And it was a two, it was a three year one year with two options. And they ended up renewing one option. So I ended up doing it for two years. And then you know, when the crisis hit, like, music business took a hit to they, they cancelled a bunch of artists that they had records coming out for that I had songs that were on the records, and yeah, so it was just it was a big letdown, not only for the mortgage side, but also the my music aspirations to crash.
John Corcoran 7:25
I mean, that must have been a pretty big impact on you, since, you know, the mortgage side was crashing, and then you had the music side as well. What drew you then to go back towards mortgages is there’s a lot of people that left the industry entirely after Oh,
Jon Maddux 7:41
eight. Well, so I went into the foreclosure business then. And that, and that, because the because what happened was, it was it was so, so much of a letdown to where like, we still had borrowers that wanted loans, but there just wasn’t any loans like, or there wasn’t any lenders that would do the loans or buy the loan. So yeah, everything got shut down pretty quickly. Yeah, yeah, we were just kind of just figuring out what to do. And that’s when you know, the idea for you walk away came in mind is like, I had been in the mortgage business at that point, about 1112 years. And I had not a clue really what happens in foreclosure and like what the process was, and we never had any issues like that I came into the mortgage business in the late 90s, where there wasn’t any foreclosure crisis, there wasn’t really much. There wasn’t very many foreclosures over that span of 10 years, 11 years. So I was like, if I’m a mortgage professional, and I don’t understand the foreclosure process, and I was like, this is happening, like, like, there was these loans, these toxic loans that were be given being given out with like, two year fixed with a three year prepayment penalty, and then it adjusts, like 2%. So, you know, they couldn’t even sell their house, they couldn’t refinance, they couldn’t do anything. So I was like, this is going to be crazy. And this was like, in late 2007, when I started thinking this when I was like, there’s gotta be something to where people can get educated about what to do. You know, if they can’t sell, they can’t refinance. If they can’t, you know, have no money, they’re stuck, they have to have a place to live. So we just dug in my business partner, the time that he was my business partner at the time, we had a friend and he was a lawyer, named Chad Ruyle and we we got together and you know, put together a business plan and and it ended up literally in like, within a month of our launch. It just got all over the news. We had a blogger who was a major Finance Blog blogger, that the time he had something called it was a long name as international finance, blogspot, something like that. But Mike Shedlock is was his name and he went by Mish Talk. And he just literally had I had one interview with him. And then the next morning after he posted his blog, the phone just didn’t stop ringing. It was just nonstop like Fox News. You know, 60 minutes time magazine, you name it. They were all like The like the phone bank was lit up with click phones nonstop.
John Corcoran 10:04
And how did they generate revenue? Was it just an educational platform? Or were you actually helping people to negotiate out of these mortgages?
Jon Maddux 10:10
So that was the thing that we I think we did right is we didn’t get into the negotiation, we weren’t in a middleman and between them in the bank, because that’s where like, you got into trouble with the financial services aspect of it. A lot of people that went down and got in trouble we were, we call ourselves an advocate. And we we connected them with a lawyer for consultation and a CPA. So it was kind of like a pre prepaid legal in a way, had a little element of that.
John Corcoran 10:36
Did you get like a commission for referring them referral commission? Is that how you monetize?
Jon Maddux 10:40
No, we monetized by charging them $1,000. And that was for the lifetime so and then we broke it up into three payments of 332, or something like that. And then we ended up shifting it to monthly recurring billing, which was a lot less, it was like cheaper, and less like 100 bucks a month, something like that. And the process was like, we’re gonna give you all the information for your state of the foreclosure timeline, we’re gonna give you all the tax ramifications, we’re going to educate you. So you are completely aware of what’s going to happen if you decide like, Hey, I can’t sell I can’t refi I can’t for my house. What do I do? And so we’d also referred to we had a short sale division. And so that was lucrative. We had eventually, yeah, the the lawyers, you know, would would either we had bankruptcy lawyers that we could refer to we had modification lawyers that we could refer to so it was a it was a there’s a lot of different ancillary, you know, income streams that came into that business.
John Corcoran 11:35
And, you know, I was a bit in this space at the same time, because I was working for a real real estate law firm that had a lot of clients that had properties. And we immediately had a lot of people coming to us needing a desperate for advice. And, you know, the banks were not negotiating. And it was, it was a sad time, I felt so bad for so many people that had gotten upside down people that lost their retirement, you know, lost multiple properties and stuff like that. And then quickly, it was a backlash against anyone who was helping, you know, the, the actual borrowers. How did you avoid that? Or did that become an issue for you?
Jon Maddux 12:12
Well, we definitely had a couple inquiries from Attorney General’s and some states, a California did, Indiana, I think, Florida, and
John Corcoran 12:22
submitted a scary day.
Jon Maddux 12:26
And luckily, you know, my business partner, Chad, you know, the lawyer lawyer, he, you know, he had a really good network of lawyers to me, he’s not, you know, he’s an estate planning lawyer, state attorney. So, you know, he just had a ton of network of great lawyers that we could tap into, but we, we knew that we weren’t doing anything wrong. And we looked at the statutes of kind of what they call financial services, and we didn’t fit it, you know, we maybe were 2% of that, or 5% of that, because financial services really were like, you take money up front, and you you act on behalf of the borrower to the to the lender, or, you know, something like that, where we were just providing we call it our you walk away kit, which was like a package that get in the mail or via email. And then these consultations that they got, so it was very like customer facing, and we didn’t ever deal with the lender or anything like that. So we luckily won all our lawsuits, I think we settled one for very small amount,