Charlie Robinson (00:01.67)
I'm glad to have Michael Lush here from Replace Your Mortgage because we have to talk about, well, first of all, I never get a chance to geek out with anybody about real estate. You know, I have 30 years experience here and I never get to talk to anybody about it. And I think it's so important. know, home, housing is a huge component of the economy. And for those of us who have been in real estate for a while, we've seen

you know, the good side and the bad side. And it's funny because I think about my journey towards getting me to the place where I am now, reading, writing books and doing podcasts and all of that. And honestly, it came down to the thing that really kind of shook me out of all of this was, was being in Las Vegas, selling new homes during the boom and bust 2003 to 2012, you know, that whole time being in it. And I knew it was a hot market and I knew things were

kind of weird with mortgages and you know, we'd have mortgage programs that were here one day and then they'd go away the next day. And I just thought things would settle down. And it was a real lesson to me that I could be in the industry, working in there every day and still not really see the full picture of what was actually happening. And it's so funny because you would assume that I would have had a hardcore background in finance or mortgage to understand this. And what I realized was that I had to learn everything kind of on the fly.

especially when it came to the mortgage industry. And when the mortgage industry started to crack in 2007, I saw it on the front line when mortgage programs started going away and we were having people qualify it and it's like, well, we'll have to move them to another program. And then that program went away and I was like, what's happening here? So I learned that, and my point is that I learned that in this scam of money per,

Michael Lush (01:33.55)
Yeah.

Charlie Robinson (01:51.718)
creation the banks will loan money into existence so that you can buy tangible assets like a house and then when you fall behind they will take back a Tangible asset even though they loaned you fake money to buy it and in it I had this revelation I read read John Perkins book confessions of an economic hitman in 2007 the light bulb went off I realized that the banks were the problem and now here we are like, you know 15 20 years later and I come across you

Michael Lush (02:06.016)
Mm-hmm.

Charlie Robinson (02:21.604)
I come across your program and I was like, okay, all right. This is something, first of all, this is something I wish I had had back then. It would have changed my life. But I realized that it's not just the mortgage industry that is broken, but it is the mortgages themselves, which are death instruments, right? And they keep you tied forever.

And once you get clear on this, it's like the light bulb goes off. So I'm excited to talk to you about this. What is your background? How did you get into mortgages? Did you see the same things 20 years ago that I was seeing? Or like, what's your journey?

Michael Lush (03:03.95)
Absolutely not. And I'll go ahead and say this too. It's not like we're pioneers in this industry. And I'll talk about financial history because what we do is actually going back to basics. know, everything changed for this country financially in 1913, you know, the creation of the Federal Reserve. And I'll get into that here in a little bit. But as far as my background.

I was a college athlete and ironically the school I went to was heavy on finance. It was Queens College at the time, now it's Queens University. And the business portion of it is called McCall School of Business, which is named after Hugh McCall, who was the founder of Bank of America. So it was almost like this indoctrination camp to pump out really good employees for Bank of America. Not hating on it, I think it's brilliant for them to do, but that's essentially what it was. So I went to finance school.

And, you know, honestly, I started off saying I'm going to be a doctor. And after the first semester, I'm like, yeah, that's not happening. So I'm like, I'll go into business. And I'm glad I did because I had no idea. You know, 18, 19 years old, I had no idea what I wanted to do and really didn't know until probably 12 years ago, to be honest with you. But it was after I graduated, had a buddy that graduated ahead of me.

And he went to work for this mortgage company. And at the time they were eighth or ninth largest lender in the country. And he said, man, I think you'd be really good. You know, I can get you an interview. I was like, I'm not really interested. Then another night he came over and he's like, man, I'm telling you, I think you would, you would crush if you would just take an interview. And I was like, dude, I don't know anything about it. And he showed me the commission checks. had like this one sheeter of who the top gun was of that month or whatnot. And I looked at the commission checks.

And I was like, yeah, I'm interested. Cause that's the time I'm making like two grand a month, know, bar back and bouncing at bars and stuff. And I knew I was wise enough to know like, yeah, this is not a healthy environment for me to be in. So I need to get out as quick as possible. So I said, yeah, let's, let's do it. And the way I landed the interview, I was reminded of almost a year later because, know, I was just like, Hey, poor college kid. I just want to make money. So I got to land this interview.

Michael Lush (05:19.342)
And during the interview, I was talking to the senior vice president. said, who's your top person last year? And he named the person. I said, okay, well, I can guarantee you this. If you hire me, I will beat that person. And he's like, really? said, guaranteed. Now, did I truly believe that? Absolutely not. I'm just trying to win and get hired, right? And so luckily he called me up that night and said, yeah, you you're hired.

So kind of started out of the gates doing pretty good, had a couple bad months and then some really great months. And it was in October of that same year, this was in 2001.

You know, we had this is like the epitome of subprime mortgage company, right? Where it's call center environment. We were fed leads. We're not out on the street getting our own leads. So, you know, you have this big, huge training room where a hundred loan officers would sit in there and a senior vice president every morning would walk around and just throw objections at people. And you got to overcome the objection. So he did with me and threw an objection out and I think overcame it. And they did another one.

I was like, me again? He's like, yeah. Normally he's like takes turns with a bunch of other people and he did me again. Then he did me again. I'm like, all right, he's picking on me or something. And so he used it as an announcement and said, normally we don't, you know, disclose this until December, until the end of the year, because we have this,

big meeting up in Manhattan for all the winners that qualify to go to the headquarters and whatnot and have dinner. He said, we don't typically announce it this early, but he's so far ahead. Michael Lush is the newcomer of the year. Nobody's going to be able to catch him. And then he reminded me of what I said almost a year ago. I like, I totally forgot about it. I was just trying to win an interview. And then, you know, I just graduated up the ladder of becoming an assistant manager, then a manager, then a senior manager.

Michael Lush (07:12.014)
And it was, as you mentioned before, 2007, you just kind of saw the writing on the wall. You we're in Charlotte, North Carolina, and we've got a pretty decent size operation, anywhere from 100 to 150 loan officers. And I think it was like July of that year in 2007. We would go from like 450 to 550 units to like 60. And I'm like, oh man, this is not good. So long story short, that year in 2007, they filed bankruptcy.

And as everybody's running out of the burning building of real estate, guess what I did with my pocket change that I'd saved up in my 401Ks? I go into real estate. That was terrible. But anyway, I ended up coming out of that unscathed to a certain degree. But terrible decision. anyway, they filed bankruptcy. And it was about a year later. I took that opportunity to move back home. Home for me is Nashville, Tennessee.

Charlie Robinson (07:48.55)
Please.

Michael Lush (08:08.558)
And my mom and dad owned a kind of the farm life ever since I was a little kid, whether it's my grandparents or my parents. And I said, you know what, this is an opportunity for me to move back home. And they had a vacant house on the farm that they'd just renovated. And I'm so broke at this point. like, I can't even afford utilities or cable, which looking back, me and my wife look at that as such a blessing, because we couldn't afford TV.

couldn't afford internet. So what did we do? We played board games, built a stronger relationship. I read books on finance and it really kind of cultivated what I would eventually come to be. And that company, I went to work for another mortgage company. Again, subprime is completely dead at this point. All you've got is FHA, VA, USDA, Fannie and Freddie. So I went to work for this mortgage company just as a loan officer. They had no idea what I had achieved in my previous life with

that previous company. And I knew it was kind of a dead end job. I'm looking at management and the owners of it. And most of them weren't even in the mortgage industry. They were in healthcare and just the way they were running it. I was telling myself if they would just give me the reins, this could be something special. But again, they had no idea who I was. But it was a short stint there.

And the CEO of the previous company had called me up and said, hey, we're resurrecting and we hear you're in Nashville and we'd like to bring you back and have you as director of operations. And I said, absolutely. I'm kind of in a dead end job anyways. And so they got their money from a hedge fund out of Connecticut to resurrect. At the time, I think it was $25 million.

And the reason why I bring this up is that hedge fund owner, he lived in Connecticut, but his parents lived in Nashville. And I remember when he was coming into town to visit me, he told the CEO, he's like, I'm going to go meet my parents, but I want to stop by and meet this Michael Lush guy, you know, who's kind of somewhat responsible for my money. And so me and the CEO have multiple conversations. He's like, please don't embarrass us. You you got to understand this guy's worth like 600 or $700 million. And I said, okay, I'll just, I'll be myself.

Michael Lush (10:19.557)
And that was one of the things I'll go back to kind of backtrack a little bit. It was such a blessing is that really changed who I was as a person too.

you know who I am today versus who I was in my early 20s and making that kind of money, you know, between me and my wife, you know, $500,000, which, know, to some people even today is a lot of money, but you know, to some people it's not a lot of money, but for us it was a lot and we just thought that gravy train was not going to end. And so, you know, I, I was greedy. I was prideful and you know, just, I was stupid at 2008. I was not a victim of 2008.

I made myself a victim of 2008 because, buying big houses, nice cars, four-wheelers, motorcycles. Yeah, I did it all. And so when that company went bankrupt and those paychecks stopped and I was dumping all of my savings into real estate, which was a terrible idea, I eventually went bankrupt too in 2008, filed bankruptcy. But, you know, that really, that person, it made me wake up and be like,

Charlie Robinson (11:02.106)
Interesting, yeah.

Charlie Robinson (11:07.212)
in it.

Michael Lush (11:28.824)
You know, I kind of put this image on of somebody that I'm not or somebody that I want to be. And it's not becoming, you know, I was just egotistical and everything was about money. And honestly, God kind of taught me a life lesson. And I was listening like, look, you know, just be yourself. And that's what I did. I was like, you know what? Moving forward, I'm not going to try to put on this image. I'm just going to be me. And if my sphere and my friend circle gets smaller, so be.

So anyways, I did that and I just, you know, kind of made a commitment. I'm just going to be myself. And if people like it, they like it. If they don't like it, well. I can only be the best version of me. I can't be the best version of somebody else. And so anyways, we have the multiple conversations leading up to the hedge fund manager coming in.

And he came in multiple times, and mainly it was about just managing the funds, how's it growing, blah, blah. But another meeting that he came in, because he would frequently come into Nashville to visit his parents, I finally said, you know what, he's where I would like to be someday, especially financially, but also from a knowledge standpoint.

very, very bright individual. And I took one of those meetings as an opportunity to try to get his business. was like, look, birds of a feather flock together. I would love to get in your sphere of influence. That way I can learn, I can grow. And here's another idea. If you can introduce me to your sphere of influence, they're doing mortgages, they're doing big mortgages, and that's big paychecks and big commissions, and you also get your money paid back faster. And that's when he hit me with it. He said, I'll be honest with you,

are financial crack to middle America. The poor can't afford them and the rich don't use them. And that stuck with me. It'll stick with me forever. And essentially he was calling me a financial dope dealer. And my entire career is built on the mortgage industry. anyways, I...

Michael Lush (13:35.83)
I was like, man, this doesn't feel good. I said, let me guess, you when you say the rich don't use them. Cause I knew I wasn't getting poor people qualified. This is post subprime industry. So, you know, subprime, you fog up a mirror, you get a home. Hey, we'll give you two or three. And we've seen the movie, the big short, and that's exactly the way it was. And anyways.

Charlie Robinson (13:44.167)
.

Charlie Robinson (13:53.928)
I was living that movie. I tell people all the time about that. The scene where it's like the stripper who's like, I'll also do your mortgage and everything. I had that exact situation happen. I had a guy roll in, an old man roll in with his real estate agent who I'm sure he met last night at Cheetah's or someplace. And she's like, I'll also do his mortgage. I was like, how convenient.

Michael Lush (14:16.974)
Peace out.

Yeah, but I was more focused on the rich portion. I was like, let me guess you pay cash for everything. He's like, think about what I do for a living. I use other people's money for a living. I run a hedge fund, so I'm not going to do anything different in my personal life. He said, but we just don't use mortgages. We still use bank money. And I was like, well, explain that to me. Because I thought the only option to finance real estate was a mortgage. And he said, no, we use simple interest lines of credit, whether that's a business line of credit

commercial line of credit or personal line of credit or he said one of the best options for a real estate is a home equity line of credit. I was like in everything I've been told in the mortgage industry

And the way we were trained to sell was to consolidate home equity lines of credit. Because if you consolidate as much debt as possible, your loan amount goes up. And at the time, we're fee based. So if we charge five points on the front, we get two points on the back. So that's 7%. So if you're doing a $500,000 mortgage, you got $35,000 in fees that you then split with the company as much as we got 60%, 65 % of the fees. So it's big.

paychecks and you know we would we would tell people look a home equity line of credit on your house is no different than having a credit card which is true

Michael Lush (15:40.438)
But you know, because everybody had a negative combination of credit cards, right? And still do to this day. And for right reasons, you know, a lot of people don't know how to use them strategically. And most people don't use them strategically. It's whatever they can't pay cash, they put it on the credit card. So I get that. But that's the way we were trained was to consolidate as much debt as humanly possible. And I just took it as gospel. Like, yeah, HELOCs are bad.

So when he tells me home equity line of credit, I'm like, no way. And so after that meeting, it just.

was like a little bomb that went off in my head. And I was like, I've got to understand this. I'm going to try to disprove this guy. So hired a CPA and actuary and actually one of my good friends who's my business partners today, Matt Workman at the time he was managing a couple of billion dollar portfolio for Wells Fargo. And so, you know, one of the brightest people I've ever met. And I was like, this is what he just told me. And my goal is to disprove him. So we go down this rabbit hole and the more we try to prove him wrong, we ended up proving him right. And so I didn't,

immediately jump on that bandwagon. You know, I'm sitting there researching it to death. Is there any companies out there? And at the time, I think there was like a couple that I had saw, two, one was selling like a software package, another one was a consulting firm.

But there was like no one knew about this. But yet the elite and the wealthy, this is what they're doing. And long story short, I come to find out that that's actually how businesses finance. That's how we finance our business. We don't use installment loans. We use lines of credit to finance, whether it's media, bulk traffic, or our everyday expenses. We use business lines of credit instead of just taking cash out of the bank account, pay cash for everything. This is gonna make Dave Ramsey crawl up a

Michael Lush (17:30.144)
wall for sure. But anyways, that's how businesses operate. Any decent sized business, it'd be tough for you to find one that doesn't operate that way. Why? Because businesses are very intentional with their money.

Charlie Robinson (17:30.727)
That's alright.

Michael Lush (17:45.036)
And they're looking for strategies to accelerate paying off debt or leverage debt to grow their business and scale their business. So no one ever connected the dots of like, okay, if it's good enough for businesses, then why isn't it good enough for personal finances?

And it is. But anyways, go down this rabbit hole, prove him wrong or prove him right, I should say. And then it was in 2011, me and my wife, you know, now we're three years post bankruptcy and we can qualify to buy a house again. This time we have kids. So the first time we didn't have kids. So now we buy another house. And I did close on a mortgage because I didn't know that you could purchase a home.

Charlie Robinson (18:20.584)
Mm-hmm.

Michael Lush (18:28.14)
right out of the gates with a home equity line of credit. I thought you had to refinance to a home equity line of credit. So I closed on a mortgage and told her, here's what I'm going to do. We're going to get about six months in. And then if we've got 10 % equity in the home, I'm going to refinance the entire mortgage to what's called a first lien position home equity line of credit. That was like pulling teeth any time I would call banks or credit unions. And

All of them would do it, but the banker on the front end had no idea. It's like, you can't do that. You only got 10 % equity. How are you going to take 10 % to pay off a 90 % balance? I was like, I'm just going to refinance. they just get, so I'd have to run it up the flagpole. And eventually you get like a chief risk officer or somebody, you know, higher up with the bank. It's like, oh yeah, we would do that. We actually would prefer to do that because we have.

guaranteed collateral rights. If we're in second lien position, we have no guaranteed collateral rights. So absolutely we would do that. So I interviewed like 10 banks and credit unions and finally found one in Idaho.

And I'm in Tennessee, but all that mattered to me was that they would lend in Tennessee. So found them. They had good terms and conditions. like, all right, I'm going to rock with you. And then six months into owning that home, we refinanced our mortgage to a home equity line of credit. So no closing costs, no mortgage insurance, and now we've got this line of credit. And what I did for 3 and 1 years, and I'm still in the mortgage industry, by the way.

is I'm dumping all of my cash flow into this home equity line of credit. And then we would pay our bills out of the home equity line of credit. Well, if you fast forward three and a half years later, we paid it off.

Michael Lush (20:06.222)
And my wife was super nervous through this time. She's like, please don't do this. We have kids now. Don't lose this house as well. so it got to the point where every phone call I'm on, because I'm still in the, at this point I became a senior vice president for a federally chartered bank. And I'm offering mortgages. I'm not offering home equity loans credit because home equity loans credit don't pay anything. We had one, but it's like over here, I could get 2 % of the loan volume. So if it's 500,000 loan.

want to make 10 grand, but if I do a $500,000 home equity line of credit, I get $250. I'm like, I can't support a family off of $250. But it felt dirty. I kept going back to what the hedge fund manager said is, you know, you're basically a financial dope dealer. It's financial crack to middle America. The poor can't afford them and the rich don't use them.

So I was being interviewed for, I forget the name of the magazine, but it was some kind of mortgage magazine. And the guy calls me up and we're doing this interview. And it's very monotonous. Essentially the topic was how do you grow and scale branches? Because that's what I was doing was trying to recruit people, have a branch here, grow that branch, et cetera, which is what I did for that previous company that if I bankruptcy and it was resurrected.

Anyways, we're doing that and it's very monotonous and boring. And then he hit me with the last question. He's like, there may be nothing new under the sun in the mortgage industry, but what's out there that nobody knows about, but everybody should? And I'm like, this is not self-serving, but what the heck? I was like, I don't consume mortgages. And he's like, what, what are you talking about? I was like, no, me and my wife, we hadn't paid it off yet, but we're well on our way of paying our house off pretty quickly because this is actually what we do.

And he called me after the fact, after the interview. It's like, I noticed a couple of things. The first 30 minutes of it, he's like, boring, no energy. He said, I could tell your energy that you didn't have any interest in it. He said, but that last 15 minutes when you go off on this rant of what you personally do, your energy picked up. And that is a topic and something that everybody should know about. And he's like, and I think you should build a business around that.

Michael Lush (22:24.302)
So I did, I started in 2014, I created a business.

And God had my back. I was literally working out of the house and I was in a closet and I know there's going to be all kinds of jokes on this. It's like, when did you ever come out of the closet? But I'm working in a closet and this isn't even a walk-in closet. This is like we had a small house and then at the time my sister was pregnant and not married and now single. So she needed a place to live. So she takes my office and then I go into the guest bedroom and it's just, you know, your standard accordion door closet. So she bought me this little desk.

Charlie Robinson (22:35.154)
You

Michael Lush (22:58.468)
that I could fit in there. My printer's over here, back when you printed paper and whatnot. So everything fit in there. So that way if we did have guests to come over and you just closed the closet, it doesn't look like an office. So that's what I did. And I had a little sticky note that I would just put on the back of the closet wall. And it was something to kind of keep me motivated because as I'm trying to build this, I'm getting up at six o'clock in the morning, starting the nine to five as a senior vice president.

president for this other bank and.

having to not only do that, but on the side of building this business. So the really only time I got to spend with my family was dinner and probably 30 minutes to an hour before they would go to bed. And then I would just work until two or three o'clock in the morning. And so I needed something to kind of keep me motivated. So I just wrote on a sticky note, put it on the back wall of this closet, simple words says they are worth it. Meaning my wife and my kids.

five kids at the time we only had two. So I did that. I just had the side hustle where I would promote it and I had my milk route of how I was trained in the mortgage industry. I'd go around to realtors, I'd go to CPA offices, I'd go to financial planners and whatnot to generate leads because I didn't have any money to spend money for leads like you do to this day like Facebook ads and TikTok and all that. So very low budget business. so I was working around the clock to the point my mom and

dad came over one time and looked at me, like, you know, need to get checked out. Like, you're not looking good. Because I was sleep deprived. I'd work until three o'clock in the morning and get up at six. I was running on three hours of sleep. And so I wasn't sick, I was just tired. But it took about three to four months for that little side hustle to be more, bringing in more revenue than what I was making in the mortgage industry. And I said, that's it, I'm out.

Charlie Robinson (24:38.728)
Yeah.

Michael Lush (25:02.026)
So I forgot making more over here than I am over here. And I'm only devoting five, six hours a night on this business. So imagine what I could do if I devoted 12 to 14 hours a day on this business. So I completely resign.

and do that and it took off and it resonated well with people. would have house parties where I'd invite people over, have snacks and stuff, kind of like your MLM type stuff where I'd never really been in one, but just visioning this is what they do. Because again, I wouldn't broke, I couldn't afford to pay for leads. So I'd invite neighbors in and then have a house party and then do a presentation on my TV and whatnot. But it took off.

Charlie Robinson (25:26.504)
You

Michael Lush (25:45.926)
I just started reading books and hiring mentors and other more. I started delegating throughout the process. And then, you know, here we are today, you 2026. And I just learned about this actually last month that we are now in the top point three percent of all American businesses based on revenue and longevity. And it just hit me like a ton of bricks. I was like.

You know, I'm still in the grind mode and the hustle mode. So I hardly ever come up for air to be grateful for, you know, God's blessings. But, you know, when my partner put that on the dry erase board and was like, that's what does this number represent? Like no clue. He's like, that's where we stand in all businesses in the U S I was like, oh my goodness. So it's obviously paid off and we've helped a lot of people, thousands and thousands of families across the country. And, um, yeah, it doesn't feel like work. And that's something else I would tell people.

as well as like find what you're passionate about. Because if you're passionate about it, you won't feel the grind. You'll just work on it until the sun goes down, until the sun comes up because it doesn't feel like work. It's kind of sports. The reason why I excelled in basketball is when my buddies wanted to have a field party or go chase girls, I wanted to have a pickup game.

And you know, it was just that was my definition of fun. And so, yeah, if you find something that you're passionate about, money will follow. You won't have to chase it because you'll be so good that you can't be ignored. Excuse me. But.

Charlie Robinson (27:18.332)
I think that athletes that have, people that come out, athletes that go into business typically have a, I think they have an advantage because they drag a lot of those skills, a lot of the mentality of practice, the grind. You get to a certain, especially if you're somebody who's like an endurance sports, like you love the grind. The grind is what you're looking for. So while everyone else is sleeping,

You're like, I'm just going to outwork everybody. So they go into business. I know a lot of people when I worked in, in new home sales, you could kind of tell some of the people like who would be good and who would be bad. And I would just think these P some of these people are miscast. Like that guy should be in accounting because he doesn't talk to anybody. That dude in, in construction, who's chatty with everybody, that guy should be in sales. He didn't, know, so, so sometimes you got people in the wrong place. And, and, and it's so funny because I, I go through, hearing your story. I kind of have.

so many similarities because it was like, got walloped in 2008 when the market turned and I couldn't understand what was going on. And I didn't have, I kind of threw my hands up and said, all right, you got me. But I wanna know how the game works. I felt like I was playing three card Monte and in some street, in some.

the alley somewhere and I'm going, okay, I keep losing. Show me, I don't want to play anymore, but just let me go around the back of the table and you guys show me how this thing works. And once I kind of understood how it works, I was like, okay, there's a bit of a scam here. So mortgages in general, I saw, I didn't work in mortgages. I worked in new home sales, but we were coordinating with mortgages and I can confirm every single thing that you said. I would fax over.

I would fax over an application to people and they would call me and you know, the lender would call me a half hour later and say, yeah, this guy's good. And I'd say, this guy makes $10 an hour. Are you sure he's good? He's like, we're good. And then I would talk to the mortgage guys later and I'd say, I find it hard to believe. I mean, you say we're good, we're good, but I find it hard to believe that this mortgage is going to make it all the way. And then they explained to me, look, it doesn't matter.

Charlie Robinson (29:35.624)
if the mortgage makes it all the way. We're gonna sit on this thing for about 72 hours before we sell it to Wall Street. And then it's their problem. If it's a time bomb, it's gonna blow up on somebody else in some fund or some, know, But it's not gonna be our problem. And I thought, oh, I get it. Now it still didn't make me feel any better. You know, I knew it was gonna be somebody's problem and it was a bomb that was gonna go off. And I just had...

Michael Lush (29:37.23)
Thank

Michael Lush (29:59.64)
Yeah.

Charlie Robinson (30:03.835)
I just had an underst- in the aftermath of that I just realized how little I knew. You know, I knew just enough to do the job, like George Carlin said, just enough to work the machines, but I did not understand the whole, I didn't understand the math behind it. And then, and so now I do, and I understand where things are, and, and how they work, and then I get connected to you guys, and I start to, you know, and I watch the 23 minute video that I send people to, anyone who's interested can go to.

Wipeoutyourmortgagenow.com is the website that's specific to our show that people can find the video talking, you know, with you talking about it. After I watched that, just, I was like, this is, first of all, I feel kind of dumb for not knowing, for not recognizing this sooner, you know, it's like, the light bulb goes on, you go, it was in front of my face all along, I just didn't see it. But much like you, I thought that Helox were...

you know, something else. I thought they were, you get a mortgage and then you get a home equity line of credit and you use that for some things. Maybe you want to buy a car, maybe, maybe the value's gone up a bunch and you want to treat it like an ATM. saw a lot of people getting into trouble with HELOCs. So in my mind, it was like, that's great if you need it. Like if you're doing a renovation on your house and you have equity and you want to dip into it and use it for some things, but boy, is that a trap. If you're like, I have to maintain this lifestyle. I need to pull.

money out because I'm running at a deficit every month. Like that is a strategy that isn't gonna work. So let's talk about this because there's a line in your presentation that is perfect. It's not magic, it's just math, right? And I think people expect that, if anything actually existed out here that could take your mortgage from 30 years down to between five and seven, A, I would know about it.

B, it would be illegal. C, the banks would make sure that this never happened, right? That this would never exist. And all those things aren't actually true. Those are assumptions. This does exist. It can take your mortgage from 30 years down to between five and seven. And the way it does that is because you treat the interest differently. Can we talk a little bit about compound interest or how you tackle it when you tackle the interest in the early years of say,

Charlie Robinson (32:27.45)
a 30 year mortgage where when you're making payments, you're really not touching the principle at all. You're really only making, it's almost like an interest only loan, whether you signed up for one or not. Can we talk about the math behind mortgages a little bit?

Michael Lush (32:42.626)
Yeah, if you got time, would love to give just a quick history lesson on mortgages too.

you know, earlier before we started recording, we were talking about Jekyll Island, 1913 and the creation of the Federal Reserve. So mortgages, the term mortgage, as you've adequately explained, is death pledge. It's old French for death pledge, mort being a mortality gauge, being a contract. So it literally translates to death pledge. So the term has been around for a long time. However, the way a mortgage worked prior to 1913, especially 1930s when the banks got ahold of this,

was like a line of credit. I love this scene. I don't know if you're a fan of Yellowstone, but there's an offshoot of Yellowstone called 1923 where Harrison Ford goes into the bank. And again, it's 1923. He's got this big ranch out in Montana and he's wanting to get some equity out.

And the banker said, we've got this new product and it's a mortgage and it gives you the luxury of time. And he hits him with he's like only a banker would consider a mortgage a luxury. So, you know, prior to 1913, if we just could go back to our forefathers, our great grandfather, grandfather, however old you are, you know, you hear these stories back in my day. We'd buy a house or ranch or whatever, and we paid off in 10 years. There's a couple of reasons for it. One, I think they were more disciplined. You know, you had fireside chats.

and you didn't have Netflix and Hulu and Disney Plus and ESPN and iPhones and all that. So you read books. So I think they were a little bit more educated. They were definitely more disciplined. They were definitely more intentional with their money, especially at that time. So that was one reason. But the other reason is a mortgage worked.

Michael Lush (34:25.166)
opposite of the way it works today. It was essentially a line of credit. So if you had a $200,000 home and you owed $100,000, you could go take the horse and buggy, go down to the bank that day and say, I need $10,000. And they're like, yeah, we know it's worth $200,000. We know you owe $100,000. So yeah, we have no issue with it. We'll give you $10,000. And the farmer would then take that $10,000, buy equipment to cultivate more crop, make $20,000, go back and deposit it into the mortgage because it was a two-way street. Money could flow in and out freely, 24-7.

And so now he takes that 20 grand, dumps it into the mortgage because they didn't trust the banks at that time. You know, we've seen it's a wonderful life and that was, you know, not necessarily a true story, but that time run on banks and people just didn't trust the bank, but they didn't hide it under the mattress in the house either. So they needed a safe place to store their funds. And what they did is they stored it in a mortgage because they knew they could get access to it anytime they wanted. So in that little math equation, you take a hundred grand, goes up to $100,000.

10 because he took out more of a loan, but then he cultivated the crop, got 20 grand, now he owes 90. So you continuously repeat that process. They were able to pay their homes off extremely fast compared to Americans today. Fast forward, the Federal Reserve and what's important about the Federal Reserve is they allow banks to execute what's called fractional reserve lending, which means for every dollar you put in a bank account, they can lend out 10 times that amount. So the banks got a hold of it and said, okay, now we need to figure out where America

Americans are storing their cash or they're storing it in a mortgage. Because if we could get more deposits, we have more money to lend out than we actually have in our deposits. And so therefore we make arbitrage and we just make more money. So we got to figure out how to create more deposits. So they got together and created what I call the modern day mortgage. So ever since the 30s, the mortgage stopped being an open in line and became an installment loan that's closed in, meaning money goes in freely.

everybody knows this and feels this in their own.

Michael Lush (36:27.854)
community today. It goes in freely, but when you need access to it, when you need it the most, you got to go back and refinance or get an additional loan on top of it. So what it does is it forces the average American to execute what's called segregation of income, meaning you got your income coming in, then it goes to the checking account. Maybe some goes to the savings account. Then we segregated further where some of the money in the checking account goes to bills, car loans, house payment, etc. And then even in the savings

account, we're segregating that too, where some's going towards future retirement, some's going towards a vacation or emergency fund, et cetera. And we all should know that you lose power when you segregate your income that way, where if you have more of a streamlined income approach and get to utilize every single penny you make, it's going to have more power. So that's what the banks did in order to get more deposits, is to separate you from your cash.

And in a home equity line of credit, it's a two-way street. It's an open-end line of credit, meaning money can move in and out freely 24-7. Heck, there are some banks and credit unions out there today that they literally give you all the tools just like you would have in a checking account. And, you know, let's also talk about what you get in your checking and savings account. You know, although rates have gone up, what they're actually paying for those deposits is next to zero. The national average is 0.07%.

So it's not even worth the same 0.07%. We might as well just say zero. So your money is going into a check in our savings account and it's not even keeping up with the cost of inflation. Historical inflation is an average of 3.3%. So if you put money in a bank account at that rate of return,

but yet inflation is going up 3.3%. Guess what your negative rate of return is? It's negative 1,841%.

Michael Lush (38:27.04)
So if we think we're being good stewards of our money and we actually do invest, would you ever invest in anything that gets you a negative return of 1,841 %? But that's essentially what we do, like it's second nature is open up these checking and savings accounts that don't even cover the cost of inflation. So a home equity line of credit being an open in two way street where money can go in freely and come out freely, you get check rating capabilities, ATM withdrawals, online bill pay.

routing number, stuff like that, where you can literally treat that home equity line of credit just like your checking account. So now it gives you the confidence to actually deposit all of your cash flow into that home equity line of credit. And the way the interest works is when you put money into a line of credit, money first goes to principal, then interest is calculated.

On a mortgage is the opposite, as you were alluding to. You've got a 30-year mortgage, the first five years is basically interest-only payments. And the reason why banks and mortgage lenders front load a mortgage is they know that the average American is going to refinance or sell every three to five years. So it's this mad rush to hurry up and get their profits first. And on a 30-year mortgage, because it's front loaded with interest, you're not actually paying more principal than interest until roughly 18 to 19 years in.

Charlie Robinson (39:19.944)
Hmm.

Michael Lush (39:47.936)
That's when it starts to flip where if you're paying a thousand dollars a month

Charlie Robinson (39:48.136)
you

Michael Lush (39:52.62)
You got to wait 19 years before that thousand is actually paying more towards the principal than it is the interest. So again, on a HELOC, it's entirely different. It's what I call recasting automatically every single day for free. Mortgage companies will recast your mortgage, but they limit how many times you do it and they charge you fees almost similar to a refinance in order to recast that loan. So it's highly protected because they know it benefits who? The consumer, not them.

Charlie Robinson (40:05.534)
Yeah.

Michael Lush (40:22.594)
a HELOC does that automatically every single day for free. So if you put 10 grand in and you had a hundred thousand dollar balance, guess what you have the next day? You're paying interest on 90,000. It's called per diem. It's Latin for daily interest, right?

So if we use it like a checking account, here's the crux of this too, you have to be cashflow positive, meaning you make more money than you spend. If you don't and you're living paycheck to paycheck, then you can just hop off right now. It doesn't benefit you at all. You might as well stick with your mortgage because at least it's going to mandate that you pay down the principal because this is an interest only loan. And some people look at this and see the attractiveness of the payment being significantly smaller than a mortgage and think that that's a win. That's not. That's a treadmill.

Charlie Robinson (40:53.235)
Mm-hmm.

Michael Lush (41:07.928)
all you're doing is just making the minimum payment. This has no benefit whatsoever. I shouldn't say that. You'll always have access to your equity. But anyways, you're not building any equity. You're not paying it off. So by dumping your money in, the next day you owe 90 grand, your per diem daily interest charges are now less, and then you can also mechanize to automatically pay your bills out of it. And if that cashflow margin stays in there and it continues to suppress the principal. So if you run the math, and we've got

Charlie Robinson (41:16.361)
Right.

Michael Lush (41:37.83)
calculators on website, the website that you mentioned you sent folks go to that, you can put in your own numbers and see how much interest you would actually pay on a home equity line of credit versus a mortgage. Historically here's what we see. Now well over 10,000 families served in all 50 states. Our average client will pay their home off in five to seven years. Some faster, some slower.

But what we focus on is called TIP, Total Interest Percentage. So before the government got involved in 2010 and Dodd-Frank bill and all that, we would ask the question of, what is your rate of interest? And every time I ask that question even to this day, people tell me, 3.5%. Like, no, that's your interest rate. Your interest rate dictates your payment. But it doesn't dictate how much interest you pay. And they're like, what?

No, interest rate directly dictates how much interest I pay. No, no, no. Time and balance dictate how much interest you pay. So when I ask, what is the rate of interest? Most folks don't know. But the government, when you close on your mortgage, you have an disclosure called a loan estimate. Back in the day, it was called the good faith estimate, where it was one page. the government's infinite wisdom said, we need to make this more consumer friendly. So they made it three pages of garbage. So on the third page of the loan estimate is, you'll see at the top,

Charlie Robinson (42:50.963)
Great.

Michael Lush (42:56.432)
It's this tip, total interest percentage. And most folks never look at it. They don't even look at it at the closing table. The loan officer's not going to tell them about it. The closer, typically a notary, doesn't even know what that number means. So we just sign away. And the average tip for a mortgage is anywhere from 50 to 100%. So why isn't that talked about? Well, think about it from a marketing and sales perspective.

Hey, I got a mortgage. Now got really good tip. It's around 65%. Are you interested? Heck no. Every billboard, every commercial, we just watch the Super Bowl. It's filled with commercials, especially from lenders. What are they advertising? Interest rate, because it's the easiest number to sell. It's the lowest number, but it doesn't dictate how much interest you pay. Time and balance do. So you got essentially what you're doing with a mortgage, especially a 30-year mortgage. And in my opinion, even 10 are inefficient compared to this strategy.

You're 50 to over 100 % tip. What that means is you're buying, you're really buying two homes, especially on a 30-year mortgage. You're buying one home from the bank.

in one home for yourself in that particular order. You don't actually start attacking paying off your home until you've already bought the bank a home. So when we look at a house to buy and it's $500,000, about the time you actually pay it off, and most folks don't, what did they do in 2021? They refinanced the low rates. So they start that clock all over again. So the average American doesn't pay off one home in years because of refinancing and chasing rates, right?

Charlie Robinson (44:21.481)
and

Michael Lush (44:28.878)
So you've got 50 to over 100 % in the HELOC world. What we show people is to focus on what it's actually costing you. So instead of that $500,000 house becoming a million dollar liability, now it's not interest free, but maybe you pay $500,000 and a little bit of interest above it. So maybe it's $50,000 in interest. So now you're paying $550,000 for that house instead of over a million for that house. So it's being super intentional and being a good steward of our finances and what

God's given us and saying, okay, here's the way that I can mechanize this and actually pay 550 for this house instead of over a million dollars for this house. So that's essentially what we do. And there's a lot of ninja tricks inside of that to speed it up. But yeah, that's the crux of what we do.

Charlie Robinson (45:11.763)
Yeah.

Charlie Robinson (45:15.495)
think it's tempting for somebody to say, well, this all sounds good, but I have a 3.5 % mortgage from 2021. I'm not giving that thing up. I'm never gonna see that rate again. We all know that. I'm not giving that up. I could maybe do this, but why would I trade this sure thing, low mortgage that's locked in for this maybe system that sounds kind of dangerous to

Michael Lush (45:21.827)
Mm-hmm.

Michael Lush (45:44.334)
Yeah. Yeah. So we can actually.

work with them as well. And sometimes mathematically it does make sense to keep the mortgage for a little bit. So in that scenario, we would do what's called a second lien position home equity line of credit, which is the traditional way that people use them or get them is it's based on the equity that you have between the value of the home and what you owe. So then we get a second lien position home equity line of credit because they're not yet believers. And we show them the chunking strategy of how to use that HELOC just like a checking account. So you pay that down, you take that limit,

and you dump it onto the mortgage. So you still keep your three and half percent mortgage. And then now this one goes up and you pay it down and you keep chunking. that way, you know, a lot of times I would say a lot of times it just depends on everybody's specific cash flow. Some people are so cashflow positive, you know, let's say somebody owes 300,000 on a home and they make 12 grand a month and four or $5,000 of expenses. You know, they've done a really good job budgeting. It doesn't matter if they do first lien or second lien.

because they're what we would call interest rate immune. Even if the HELOC rate was higher, which we'll get into that here in a little bit, that's a myth too. They don't have to be higher than mortgages. They could be substantially lower. But anyways, they're so cashflow positive that they're interest rate immune that it doesn't matter. They're paying their home off in 24 months. It doesn't matter what the interest rate is, right? I'll give my specific scenario. That's the way it is with me. I could pay my house off every 17 months if I wanted to. It doesn't matter if it's a 3 % or a

It's still going to be 17 months. It might be 17 months and four days at a higher rate than 17 months right on the dot, but it's interest rate immunity. Again, we got to focus on what the total cost is, not what the interest rate is. But in that scenario, yeah, we use the chunking strategy. Then they're like, holy crap, this makes sense. And then they will eventually flip the whole thing to a first lien position home equity line of credit and also maintain their equity. That was important during COVID too.

Michael Lush (47:47.84)
because we're only talking about thriving right now, right? So, hey, it's good times, we're making money, we're paying this thing down, but what happens when the paycheck stop? Let's say during the pandemic, you get furloughed or laid off or whatever, the job, the business doesn't even exist anymore. We can actually be a saving grace. And here's what I learned, especially in 2015.

I had a joint venture with a small community bank here in Franklin, Tennessee. And they were about a three, $4 billion bank, which sounds like a big number, and it is, but in the banking world, that is tiny. A lot of banks will work off of hundreds of billions, if not into the trillions, like a JP Morgan and some of the bigger banks. So that's a small bank. And so I was working on a joint venture with them, helped them create a very consumer-friendly home equity line of credit. And they're like, yeah, let's go. And we start sending them business. And next thing you know,

they've got a short runway, right? Because again, you've got that 10 to one ratio. If you only got X amount of deposits, you can't go above 10. If you do, you've got to rectify it pretty quick according to the SEC, OTC and all that. So we got to the point where we're sending them so much business, they're like, hey, we got to cut the credit card off. We can't keep taking in more clients. We're like, okay, well, what's the work around? So they start interviewing hedge funds to take that paper and sell them to. So I'm not on the board of the bank, but I'm on the board of this joint venture.

allowed to be in the meetings. And so these hedge funds are coming in one company at a time to buy this paper. And I couldn't help but notice that they're somewhat salivating over this. Like, yeah, yeah, we really want this. Like, terrible poker face. And finally, I just asked a question. Why do you want this so much?

And if you're that six-year-old and you just keep asking why, I think that's a great trait and habit to have because good questions lead to powerful answers, right? So I ask, why do you want this so much? And they're like, well, we kind of learned our lesson in 2008. In 2008, a lot of people foreclosed. However, folks, especially with the first-ling position, home equity line of credit, they did not.

Michael Lush (49:51.951)
And I said, so share the data with me. What does that look like? We're like, basically we have all this paper that we already bought from 2008 that was on HELOCs. And we had literally close to zero defaults, not completely, but like a handful of defaults people that were in a first lien position on my equity line of credit versus folks that had a mortgage. So the default rate is 115 times lower when you're on the first lien position on my equity line of credit than it is on a mortgage, right?

So, here's why, because let's say you start off with a $400,000 line limit or balance, I should say, and you're executing the strategy. And let's say over the course of two or three years, you've got that thing knocked down to 250. Well, your line limit is 400. So you've got access to 150,000 anytime you want, especially in digital world where they got cards with it now online, bill pay, all this. So what they found was that what folks were doing in 2008 that lost

their income, they were actually treating their HELOC as income, just like seniors do with a reverse mortgage. In fact, reverse mortgage, it's coded as HECM, home equity conversion mortgage. Well, there's only one tool inside of that entire instrument that makes it run. It's called a home equity line of credit. So what folks were doing in 2008 is saying, hey, I don't have any income, so I'm going to take

Charlie Robinson (50:58.302)
Mm-hmm.

Michael Lush (51:17.09)
four grand or whatever from the home equity line of credit, send it to my checking account, then take the minimum payment and send it back to the HELOC. Well, what the banks do is they record that as an on-time payment. So they're essentially using the same tool to cannibalize itself. And the reason is they didn't default.

They didn't miss any payments. And I fast forward to the pandemic. You know, we've at that point, you know, probably had four or 5,000 clients and we got about a handful of clients calling us kind of panicking like, now what do I do? I'm like, well, where's the balance versus what your limit is? Like, here's all you got to do. And I couldn't tell you even to this day, we still get calls from them eternally grateful of like, I got to keep my house.

And I didn't starve. You know, if I was in a mortgage, you got 120 days, four months, you don't make payments for 120 days. Guess what? Time to start packing. They take the house. But those folks, when their income stopped, they were able to utilize it to actually make payments to itself. Therefore, they didn't default. And then you get back on your feet, start making money again. It's a blip on the radar when you talk about timeline. So yeah, interest rate scares a lot of people away because one, they make the assumption that home equity lines of credit are eight, nine,

10%, but me personally, not this year, but the previous years, I was on 1.99 % for four years in a row. Because banks, and what I also learned over the years is banks love HELOCs because guess what they get when they give you a HELOC? They get a depositor as well. There's nothing more the banks love than depositors.

Charlie Robinson (52:48.087)
Michael Lush (52:51.31)
Right? So you open up a HELOC with them, especially with this strategy, you also got to have a checking and savings account with them as well. So they not only get a loan, but they also get a depositor. They look at it from a marketing standpoint, like a tripwire. Let's get them in the door. Then we'll cross sell them, maybe insurance, a CD, a money market, all these other things they make money on. So there's a lot of banks, even to this day, that do what's called promo rates. And that's what I was doing. I was doing what we call promo rate stacking. So I'd have 1.99 %

for 12 months and then at the end of the 12 months, because here's the other thing, HELOCs typically not all, but most of them don't have closing costs. Now, if you did this in a mortgage, it'd be terrible because you know, the closing costs would just eat up all of your equity over time, right? But in the HELOC with no closing costs, I was just on the 11th month, you got to stay organized and keep your financials. So I had my tax returns and all that stuff, my bank statements, I just have in a file. And at the 11 month mark, I'd either call that bank and say, hey, you're still offering at 1.99.

Charlie Robinson (53:30.419)
Interesting.

Michael Lush (53:51.136)
I want to do it again so you can either renew or I'll refinance in the first year They allowed that they allowed me to renew so like yeah, you're good customer You just keep that 1.99 for another 12 months as long as we have that promo going on Well, eventually they kind of caught on to my games like we're not making any money off of you So yeah, we can't offer this to you anymore

Technically, you're violating some fair lending laws, but whatever. I'll just take my business elsewhere. So I found another bank that was doing 1.99. And again, this isn't eating up my equity because the closing costs are nonexistent. So I was able to keep 1.99 % for four years. And promo rates still exist today.

So yeah, you want to have a low rate, you can. Some have really cool promos, especially some banks in Hawaii where it's like 3.75 for five years. They treat it like an arm. So that myth that I don't want to do that, I want to take my 3.5 and substitute it for a 9%. One, you don't understand how interest is calculated so differently with this strategy versus in a traditional mortgage, but you don't have to get a higher rate if you don't want one.

Charlie Robinson (55:00.456)
Let's wrap up with this. One final question. Somebody wants to do this. Do they have to go out and search for the bank that will do this for them? Can they use their existing banks? Do you guys have a list, a network of banks that can shave some of the learning curve off of this? How would people that go to wipeoutyourmortgagenow.com, they watch the video, they wanna connect with you, but in the back of their mind, they're thinking,

How am gonna even get this loan? I live in the middle of, I don't know, nowhere. do I have to go to my local bank or can I do this through you guys?

Michael Lush (55:39.229)
They can.

You know, because the meat of the bones is the strategy. And like I said, there's some ninja tricks to not only utilize the HELOC, but the best ways to utilize it so you can speed up that process and get more benefit out of it. But the other benefit of our consulting package is we do have a list. We don't care. We don't care what bank does it as long as it's a good product to use for the strategy. And so we have an entire department. That's what they do. Eight hours a day, Monday through Fridays, they call and investigate banks and credit unions.

We've been getting investigated thousands of banks and credit unions. Bad news is, is we've disqualified 93 % of them. They're either redundant or just not good terms and conditions that is consumer friendly when there's options out there. So it doesn't have to be local. Some people like that. They want to stay local because they still old school or they want to walk in and talk to the banker if they want to. Me personally, I don't care. Like I said, back in 2011, I used a credit union in Idaho. I'd never been to Idaho at the time.

All I cared was do they lend in my state so but to answer your question. Yes We've got a curated list where it's like hey if you're in Alaska or you're in Florida or New York You know some banks don't want to cross state lines or they have this footprint that they only would stay in so you know that was the hard part of You know when I first started this is like not only my educating but I have to market I have to sell but now I got to do the back-end service to where I've got a call around all these banks as I just picked up a client in California and I don't know

any of the banks in California. So let me figure out and research which ones make sense for this person-specific situation. But yes, we do. So you come on board. Not only do we map everything out and design it and say, this is what you do every single month, but here are a couple banks that make the most sense for your situation. You can use your own. We don't care. The banks don't pay us. I wish they did. I'm working on it. But yeah, they don't pay us. So I don't care what bank you use, but some make sense and some don't make sense.

Charlie Robinson (57:37.407)
Well, I'm really glad that people are finding out about this. This is sort of a gateway drug and it's replace your mortgage, but it's not just that, it's replace your university. There's a whole other host of areas that you guys are getting into, starting with mortgages, but not limited to that. So for those who are interested, go to wipeoutyourmortgagenow.com. I'm telling you right now, you watch this 20 minute video and then you decide.

You know, you'll never get a hard sell from me. know that this is a very personal decision for people. You mentioned talking to your wife about, we're gonna do this mortgage. And she's just like, please don't lose our house. We can't do this. That is the right thing to say. That is the right thing to come into this and let's be careful. Let's make sure that we're doing this the right way. That's why I feel very comfortable sending people over to you that they say, listen, you guys talk to these guys.

If it's right for you, pull the trigger. If it's not, that's okay. You're not going to get a hard sell, no hard feelings. It's cool. This is not for everybody. As you said, you got to have good credit. You've got to have some equity. You've got to be disciplined. You've got to have a mindset for tackling this. But if you do, this is life changing, right? This will change your life. So I'm so glad you came in here, Michael. Thank you for what you're doing. You're allowing people to stay in their homes.

Michael Lush (58:51.723)
It is.

Charlie Robinson (59:00.35)
battling the banks though they don't know it yet. We won't tell anybody, don't worry. And of course we have no love for the bank. So thanks for coming on, we appreciate it. For those who are interested, yeah, go to wipeoutyourmortgagenow.com and check it out. Watch the video, find out what's going on over there. And if you want to connect with me, macroaggressions.io is the website to check out. Thanks everybody. We'll talk to you again soon.

Michael Lush (59:04.322)
Yes.

Michael Lush (59:25.272)
Thanks, Charlie.