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The Future of the Mortgage Industry: Ways AI will Impact the Lending Workforce

by | Jul 9, 2021

Mortgage predictions for 2021 and beyond all include the rise of artificial intelligence (AI).

AI has found its way into every facet of life. From the military to healthcare, it is used to increase efficiency and productivity. Finance is another industry that will benefit tremendously from artificial intelligence, and mortgage companies are no exception. 

AI integrations promise to make lending more efficient and streamlined than it’s ever been before, with tremendous potential to reduce closing costs. As AI integrates with more home loan tools like mortgage calculations software or underwriting systems, it will benefit lenders and borrowers. 

Here are some ways AI will impact the future of the mortgage industry.

Increase employee productivity and job satisfaction.

A key way that AI in lending will assist the lending industry is by boosting productivity. AI can do tasks that humans can’t, like processing large amounts of data and instantly retrieving information from a knowledge base. It’s difficult for a loan officer to find the time to do everything, whether they’re looking up personal information on the borrower, making sure their finances are stable enough to qualify or verifying there is no foreclosure on record; their job is never-ending.

AI saves loan officers from pulling the same data or answering the same questions again and again, freeing them to create genuine connections with loan applicants, real estate agents, and banks. For example, loan officers will have more time to interact with homebuyers and help them understand the different aspects of their loans, creating a personal connection. 

They will also be able to focus on more complex work, which is more rewarding. Increased job satisfaction leads to higher retention rates and lowers the cost of hiring and training new team members.

Reduce errors.

AI technology cuts out the factor of human error and uses machine learning to increase accuracy. This is a tremendous benefit for the mortgage industry. One of its highest costs is manual input and data entry mistakes.AI can process mortgage documents quickly without experiencing fatigue or boredom that may lead to mistakes in calculations or errors in judgment. 

Improve customer experience.

AI-powered chatbots can quickly answer any frequently asked question that a borrower has and walk them through their loan application process efficiently. AI tools also enable mortgage companies to quickly and effectively ask for information from borrowers (for example, their credit scores or student loans). In addition to starting the mortgage process, mortgage companies also offer better products tailored towards those individuals.

A company might use this data to predict which customers are at higher risk for defaulting based on their income level and credit score history, allowing them to offer different types of better loans for those individuals. 

Create less biased experiences.

It’s no secret that traditional lending models discriminate against minorities and single female homebuyers. While there have been diversity training and programs to reduce prejudice and discrimination, the problem has not been eliminated. 

AI, however, does not have human biases. Machine learning systems can approve or deny loans based on neutral and transparent criteria.

Research shows that algorithm-based mortgage solutions discriminate about 40% less than more traditional lending models. Using AI to evaluate potential homeowners results in higher approval rates for minorities and single women and lowers their loan costs.

How can mortgage lenders start using AI?

A better experience for homebuyers and increased team productivity will result in a healthier business for lenders who use AI.

Mortgage companies should begin by taking a close look at the workflows in their company and considering how  AI could be used to make them more efficient.

AI-powered workflows can help with a strategy that incorporates:

  • Predictive insights into data analytics for future business trends
  • Knowledge base system solutions 
  • A chatbot to help customers navigate their way through different mortgage processes and give them valuable information
  • Personalized solutions for homebuyers based on their credit score, other loans, and mortgages, and local home prices

Capacity is an AI-powered mortgage support automation platform that connects a company’s entire tech stack to answer questions, automate repetitive support tasks, and build solutions to any business challenge.

Mortgage professionals use Capacity to effortlessly tap into key systems like Ellie Mae, Encompass, and AllRegs to provide real-time access throughout the entire loan life cycle. Clients benefit from a superior customer experience with 24/7 tier-0 support. 

Capacity connects the apps your company uses every day. It also mines documents, captures tacit knowledge, and automates processes. Best of all, it does all this through a user-friendly chat interface.