TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1472906
24 | M R EP O RT COVER STORY Gagliano: Every digital im- provement made to the mortgage process is helping the industry collectively create what the future will look like. Regarding AI, particularly, the more data incorporated, the more functional tasks completed, the larger the knowledge base that helps train machine learning. By enabling the continual, iterative improvement of the process, we can get from the 45 days it takes to originate a loan today, down to just a couple of weeks while also driving down the cost of origination for lenders and borrowers alike. Jampedro: I believe we will evolve to a mostly AI-powered appraisal process. With the short- age of qualified appraisers and few people joining the profession, we will land here by necessity. Fannie and Freddie have been expanding their appraisal data- bases over the years and flexed their muscle during the refinance boom of 2020-2021 with a substan- tial increase in appraisal waivers. In April, lenders also got addi- tional latitude to use of appraisal reports less than 12 months old, which is another step toward data-based property evaluations. We will continue to see the use of aggregated data and AI driving the evolution of the appraisal process. Kahn: The industry always wants better, faster, cheaper. "Better" is the most relative term of the three, and it's the foundation for AI and digital processes. When AI and digital processes make "better" more tangible, then "faster" and "cheaper" usually fall next in line. Our mission is to use AI/digital technology to "better" simplify complex warranting and approval processes for condo lending. Our automation allows lenders of any size to leverage our products and services to under- write condo loans faster and at lower costs. As a result, rather than maintaining high-cost inter- nal resources, lenders can receive a high-quality, risk-free warrant within days. That's the mix of better, faster, cheaper. With this underlying concept, digital and AI processes will continue to push the industry forward. Lehnen: AI will hopefully get smarter, more complex, and better able to contextualize what it's looking at. Right now, the technology is founded on a pass/ fail system. Every loan has an individual story behind it—par- ticularly in the non-QM mort- gage segment. Ideally, AI will get closer to understanding each story, and making more accurate decisions about why a particu- lar date should or shouldn't be allowable, for example. Still, an experienced underwriter will always be necessary behind the scenes. In the future, I'm hoping the industry will offer an even better blend of self-service tech- nology and a seamless experience. The promise of faster processes, and fewer steps and touches is illusory if any "glitches" burden the borrower. Someone always needs to be in the background to preempt problems for a more seamless and positive consumer experience. McGee: The shift towards digital processes is well on its way as traditional sources of informa- tion digitize and newer sources of information are created with digital as its foundation. We've already seen the benefits of digital processes through greater interoperability between systems and an entire technology ecosys- tem devoted to analyzing data. However, the application of true "artificial intelligence" is really in its infancy, especially in the mortgage space. AI at this point is more experimental than it is practical. AI right now tends to be more analytical or used in low priority contexts. The next step is to connect AI to end users by helping them make decisions more efficiently. These types of AI-driven decisions are likely to be made in processes that are repeatable and scalable, such as "The promise of faster processes, and fewer steps and touches is illusory if any 'glitches' burden the borrower. Someone always needs to be in the background to preempt problems for a more seamless and positive consumer experience." —Matt Lehnen, CTO, Deephaven Mortgage