2019 Trend: Mortgage Software That Can Think (And Do)

Technology is only getting smarter and more ingrained into daily life. With the emergence of technologies like AI and iBots, technology does more than just help you work, it works for you. Instead of just providing a faster way to calculate, AI can think and learn while iBots can complete scheduled tasks without constant human oversight. 


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With the term “AI” and “iBots,” assistants like Amazon Alexa or Google Home come to mind. However, these technologies stretch far beyond the consumer world. Many lenders are now using these technologies in their everyday business practices. There are a host of automation and decisioning tools out there for lenders that help them keep their business running quickly and efficiently, while staying on the cutting edge of new technology innovations.

The Benefits of AI in Mortgage Lending

This new technology is changing the mortgage industry. The use of automation brings benefits across the spectrum of lending. Arguably the biggest benefit of automating the mortgage lending process, or any type of lending, is efficiency gains. With automatic decisioning tools, coupled with automated settlement services like valuation, title, and flood, lenders can work more quickly and can more easily handle a high volume of loans. These tools are invaluable in eliminating any backlog a lender might have.


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For lenders, this clearly means that their job is streamlined and less complicated. For borrowers, however, there are different benefits. When a lender is backlogged, it hurts the borrower. Lenders not being able to turn loans around means that borrowers are not able to buy, refinance, or improve their homes. This sets borrowers back and can lead to stagnation in the market. A mortgage lender’s ability to work efficiently has ripple effects throughout the housing market.


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Automation in mortgage lending also brings another important benefit: cost savings. Lenders are already struggling to stay profitable in the current state of the market. In one case, when a lender compared the costs on 334 HELOC applications, they found that they saved $113,319 with automation tools. Costs using technology were $97,101, as opposed to $210,420 without it. These significant cost savings mean that lenders stand a better chance of holding up in tough times.

AI Powering Automated Decisioning

Just as the mortgage industry is changing, the technology it uses is changing. Automation and decisioning tools are constantly being developed and improved to ensure that lenders have the best technology on hand.


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Some decisioning tools at the forefront of this innovation push are being developed in a unique way, designed to mimic a lender’s underwriting guidelines. Lenders are able to sit down with the developers of these types of software and talk them through how they do business. They are able to explain common problems they face, how they would solve them and other day-to-day decisions they would make. The support teams can then enter that information into the decisioning system so that it is able to make those decisions in the same way. 

This essentially allows the decisioning tool to “think” like the lender. But lenders don’t always have access to real-time data, systems do, by adding another layer of data intelligence in the form of suitability logic really takes “intelligence” to a level beyond what the lender has today.  A lender’s LOS can now make the same decisions that they would, meaning, even with automation, a lender does not have to sacrifice their quality of service. With suitability logic, systems can read property data at order placement and decide whether an automated valuation is better suited than a drive-by or full appraisal.  This AI element means that no one has to sacrifice customer experience, quality or accuracy in the name of productivity. Automated decisioning that can “think” like the lender creates a win-win situation for borrowers and lenders.

Another benefit of automation that can think is true efficiency gains. Many technologies allow people to work faster, but not many are able to mimic their thought process. This means that technology can know what to do when it hits certain snags along the way. Lenders do not have to take as much time intervening in situations where the technology does not know what to do, because it is programmed to do just what they would.

This is why partnership with a fintech can be so important. Their expertise in technology can expand what a regular financial institution is capable of when it comes to technology. Fintechs are the ones that can teach the software to “think.” They can stay on the cutting edge of technology innovations so that lenders can spend time doing what they do best. Partnering with a fintech can boost efficiency in both time and finances, as financial institutions do not have to spend time working on an area that is not in their expertise and they can ensure money is being spent wisely on optimized solutions that will be sure to produce results.

Technology like AI, iBots, suitability logic and automated decisioning tools began to be adopted by pioneers in 2018, but they will come of age in 2019. In the coming year, these technologies will not be optional for lenders. They will become the new standard for doing business and financial institutions must keep up if they want to remain competitive. Partnership with a fintech can help a bank or credit union easily achieve their automation and technology goals.

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