MReport September 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 7 MTECH before the loan can be approved and closed. Early warning of potential problems will prevent significant delays or deals from falling through. "Over the past few years, we have experienced unprecedented natural disasters and many scientists predict that trend will continue in the years to come," said Bob Jennings, CEO of ClosingCorp. "This makes it critical for mortgage lenders to have an automated solution that can warn them about properties that could be impacted by a natural disaster. With Natural Disaster Alerts, lenders are informed not only about open loans in the affected area, but also their potential portfolio risk—allowing lenders to expedite internal quality control reviews in a more expeditious and efficient manner." Headquartered in San Diego, California, ClosingCorp owns and operates a source of intelligence for closing costs and service providers in the U.S. residential real estate industry. The company delivers solutions that help optimize closing processes and services for mortgage lenders, title and settlement companies, and real estate professionals. AI in the Real World BLACK KNIGHT COMPLETED AN INDEPENDENT ANALYSIS OF ITS AI SOLUTIONS' IMPACT. B lack Knight, Inc. recently announced the completion of an independent analysis of the real-world impact of the company's artificial intelligence (AI) solution, AIVA. Using actual findings from the operations of a top 50 lender in Q 4 2018, MarketWise Advisors, LLC—a management consulting firm focused on technology in the financial services industry—found that using AIVA can significantly drive down the cost of mortgage originations. The study identified a savings of up to $437 per originated loan, with the cost impact continuing to grow significantly as AIVA's machine learning and unique pattern recognition capabilities mature to include more skills. "Through the independent analysis of an unbiased third party, we have been able to show that lenders can expect to see significant savings by incorporating AIVA into their origination process," said Anthony Jabbour, CEO of Florida-based Black Knight. "Leveraging AIVA results in significant cost savings, provides the ability to redirect tens of thousands of man hours to items more focused on satisfying customers and produces a return on investment nearing 500%." MarketWise's approach included reviewing existing processes, as well as a time-and-motion study and on-site lender employee interviews to evaluate the time and cost reductions associated with leveraging AIVA in key areas of the origination process. MarketWise also evaluated AIVA's income, asset, insurance, and file intake review skills and found that the associated process improvements decreased the cost of origination by up to $437 per loan, with an average annual projected financial impact of $3.13 million for the top 50 lender in the study, but the results will vary for each lender. In addition to the direct cost savings, the study found that AIVA also produces significant indirect impacts, including reduced error rates and increased loan quality, consistency, and compliance. The projected average annual return on investment was 483% for this lender, meaning that for every dollar invested in the technology, the expected financial impact is a return of $4.83, a figure that will exponentially increase as AIVA's skills evolve to incorporate more complex tasks. "At Black Knight, we remain focused on bringing innovative solutions to market that help our clients increase revenue, efficiency, and compliance," Jabbour said. "AIVA checks all of these boxes. AI and machine learning represent a transformational shift for the mortgage industry, and Black Knight is proud to be leading the charge." A New Partnership LOANSCORECARD WILL POWER SPROUT MORTGAGE'S NEWLY LAUNCHED AUS. L oanScorecard recently announced that it has partnered with Sprout Mortgage to power Sprout's newly launched AUS, the ACORN System. Headquartered in East Meadow, NY, Sprout Mortgage is a rapidly growing lender that spe- cializes in non-Qualified Mortgage (non-QM) loan products that feature flexible qualifying criteria and common-sense underwriting for residential real estate investors, self-employed borrowers, and those with recent credit events. Under this partnership, LoanScorecard's Portfolio Underwriter technology powers the Sprout ACORN System. This solution allows brokers to run loan scenarios and instantly determine potential options across Sprout Mortgage's non-QM loan products—accel- erating underwriting decisions and helping brokers originate non-QM loans with greater confidence. "At Sprout, we're committed to providing our broker partners with solutions that allow them to better serve their borrowers and expand their businesses," said Michael Strauss, President of Sprout Mortgage. "By leveraging LoanScorecard's technology in our ACORN System, our broker partners can quickly and

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