Correspondent Lending

3 Ways Artificial Intelligence Is Changing Home Buying


Digital technology can be a prime way to elevate the convenience and quality of service lenders offer to customers, whether by accepting mortgage applications electronically or keeping in touch via social media. One of the newest technological trends in the industry is the use of artificial intelligence (AI), or simulated intelligence in a machine that is meant to mimic (though not replace) human intelligence.

AI is already starting to offer new possibilities to improve the home buying process. For example, software can review loan documents much faster than a human can, so AI has the potential to scan documents and only alert an employee when it encounters something out of the ordinary. This could expedite the underwriting process and reduce underwriting costs, says Richard Hill, vice president of industry technology at the Mortgage Bankers Association. In general, AI will be ideal for more transactional processes that don’t require a human touch, he says. Then employees will have more time to work on growing their business and focus on higher-level tasks such as exception processing and providing personalized guidance.

Here are three other ways that AI could eventually influence work in the mortgage industry:

1. Tailored Communication

Chatbots are a form of AI in which a box pops up on your screen and asks if you need assistance. This could be a valuable tool for the mortgage industry, Hill says. By using available customer information, AI can tailor the chatbot content to that customer, whether that means walking through mortgage options or locating the nearest branch. Plus, Hill adds, if someone prefers to talk to a human, AI can help an employee tailor his or her response.  

2. Customized Recommendations

Customers can sometimes be overwhelmed or confused by the many mortgage options that are available. Artificial intelligence could determine which product might be the best fit for an individual and provide a shorter, customized list of options. Like the chatbot function, this information could be communicated either directly to a customer or to a mortgage lender, who can use it to better serve the customer face-to-face.

3. Expanded Access

In certain situations, new forms of information accessed via AI could help extend credit to people who might have been denied when only using traditional information, Hill says. If someone doesn’t have a long credit history, for example, AI could access other forms of information, like their utility payment and rent payment records. “It has the potential to enhance the availability of homeownership and borrowing to larger groups,” he says.

However, because the mortgage process is highly regulated, Hill notes that you should proceed with caution about what types of data you’re processing, and make sure to involve your risk and compliance department in overseeing privacy concerns.

At the end of the day, there’s no replacement for personalized guidance from an expert. Advanced technology like AI will be most effective when working in concert with knowledgeable, personable employees.

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