Is AI Being Used in the Mortgage Industry? Yes, But Not Like You Might Think!

Unless you’ve been living under a rock, you’ve likely noticed a surge in discussions about artificial intelligence (AI) in the media. From generating images to solving complex mathematical problems, AI’s capabilities are vast, and constantly growing. Originating in the 1950s, AI has evolved significantly and is now a staple in our everyday lives.

But with AI becoming more accessible commercially, many businesses are adopting it to enhance efficiency in routine tasks. At Luminate, our team leverages AI to optimize workflows, organize data, and much more. But what about the rest of the mortgage industry?

AI Uses in Mortgage

Fun fact – AI has been used in the mortgage industry since approximately the early 2000s when Frannie Mae and Freddie Mac implemented automated underwriting systems. As AI has grown and improved, its use in the industry has expanded in several impactful ways:

Data Extraction

Ask any seasoned loan officer about originating mortgages in the past, and they’ll likely highlight the cumbersome amount of paperwork involved. Think about it – one mortgage transaction can contain hundreds of pages of paperwork, documents, reports, etc.

For example, if one person had five loans to process and each loan had 100 pages of paperwork to manually review, that could take over 24 hours to get through all of those pages. This is just an exaggerated example, but you get the idea. Now, AI simplifies these mundane tasks, allowing what once took hours to be completed in just a few clicks, significantly speeding up the workflow.

Compliance & Risk Management

A big part of the mortgage industry is risk management – or, more simply, verifying how much of a risk or non-risk an applicant is. This process used to be painstakingly manual and could leave room for error, missed documents, or even unintentional bias.

With AI enhancements, lenders can now look at multiple data points like credit scores, income details, employment history, etc. much more quickly and easily. This helps lenders make more accurate and unbiased lending decisions which is something we are very passionate about here at Luminate.

Improved Customer Experiences

It’s no secret that in today’s fast-paced world, most of us want information immediately or as quickly as possible (thanks Google). Thanks to AI, lenders are able to implement more technology that helps make the mortgage process more accessible for the general public.

For example, by using AI for automations, loan applicants can get information about their loan almost instantly instead of waiting around for a human response. Now when you apply for a mortgage, you get instant automated updates on the status of your application, when documents are verified, and so much more.

The Future of AI in Mortgage & What it Could Mean for You

AI is a topic of considerable debate, but when used appropriately, it’s simply another tool to streamline processes. In the mortgage industry, AI is not replacing human workers; it’s enhancing their efficiency and effectiveness. The future is here, and the intersection of AI and mortgage continues to evolve.

At Luminate, we hold the conviction that the mortgage process will always benefit from a human touch. While AI can expedite procedural aspects, it cannot fully grasp the emotional nuances of making such a significant purchase. Our team is committed to ensuring that home ownership is attainable for everyone, combining AI with a human-first approach to deliver optimal, unbiased outcomes.

So, let’s build the future together, where AI supports and enhances our efforts to provide exceptional service and solutions.

Let’s Chat.

I’m sure you have questions and thoughts about real estate. I’d love to talk with you about what you’ve read here and help you on the path to buying your new home.

Michelle Oddo
Mortgage Wealth Advisor, The Oddo Group
(303) 961-6906

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