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How to win with mortgage AI

27 Jun 2024
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Competition among homebuyers is beginning to cool off as rising housing inventory gives buyers more options. However, the same cannot be said for mortgage lenders.  

To survive, scale and win in a modern lending market where speed and personalization are key to borrowers’ decisions, lenders need to modernize operations and adopt new technologies to meet customer expectations.

We’re fortunate to work with some of the best, most forward-thinking mortgage lenders,  helping them face changes head-on, improve efficiency and strengthen risk management with intelligent back-office automation and underwriting analytics. In our experience, mortgage lenders looking to implement AI can take a few key steps to future-proof their business.

Learn from online lenders

Leading online lenders like PayPal and SoFi have set new standards for efficiency, leveraging AI and automation to meet borrowers’ growing expectations for speed, convenience and self-service. Borrowers have seen the benefits of instant or extremely fast responses in other lending markets and are beginning to expect the same in their mortgage experience. For example, Ocrolus partner Better recently became the first lender to offer a One Day Mortgage, enabling customers to get pre-approved, lock their rate, and receive a Commitment Letter within 24 hours.

While in-house development of automation tools may be tempting, mortgage lenders must weigh the pros and cons of building vs. buying AI technologies. In-house development requires significant investment in time, resources, and expertise, and it also presents the long-term challenge of maintaining and enhancing solutions with rapidly evolving technologies.

Online lenders have often turned to partnerships and vendor solutions to help them integrate AI into their document processing and underwriting workflows. Vendor solutions offer ready-made scalable products leveraging the latest AI innovations and can provide ongoing support and updates to ensure cutting-edge performance. Given the accelerated development of new AI technologies, it is extremely difficult for lenders building tech in-house to keep up with those with the flexibility to curate best-in-class partner technologies.

Find the right technology partner

Although companies of all kinds use AI, financial service providers have more stringent requirements given the level of accuracy they need to make high-stakes decisions. To make any AI system successful in financial services, the unappealing and sometimes tedious work of compiling and processing high-quality data for vertical-specific training is a prerequisite.

The complex mortgage lending workflow cannot be automated with generic, horizontal AI models. To adapt and survive in a changing market, lenders need scalable, flexible solutions with a proven efficiency and accuracy track record on standardizing information from various mortgage-specific document types. They also need solutions that seamlessly integrating with existing systems and workflows, such as Loan Origination Systems (LOS).

For example, we often see mortgage lenders shy away from potential customer opportunities due to difficulties manually calculating non-traditional income sources. As rental income, gig work and other income streams become more common, lenders need more intelligent solutions to consider various calculations based on borrowers’ unique situations. With the right technologies, lenders can reduce errors and delays while ensuring a comprehensive analysis of each applicant to extend offers to a broader audience more confidently.

Empower your team for long-term success

Even the best solution can only be rendered functional if teams are equipped and eager to use it. There is still a misconception that AI is here to replace humans when, in reality, it is a powerful technology that makes individuals vastly more efficient while enabling them to focus on the most strategic work.

In one example, Compeer Financial, a Midwest-based cooperative that provides loans, leases, risk management and other financial solutions, turned to Ocrolus for mortgage automation technology. By integrating Ocrolus within their existing workflow, Compeer’s Rural Living Solutions (RLS) business unit reduced manual paperwork and helped their team commit to stellar customer service. With meaningful automation in place, Compeer’s RLS team cut processing time for complex files in half, giving team members more time to focus on their core roles and nurture customer relationships. Intelligent document automation gave the RLS team the confidence and ability to scale with fluctuating mortgage demand and succeed regardless of application volume.   

When equipped with AI knowledge, teams can be more ultra-productive and scalable. Empowering team members with training, such as our AI-Empowered Underwriter certification, can help increase understanding and adoption of AI-driven tools. Embracing AI helps underwriters optimize their daily throughput and allows these professionals to prepare for their careers’ future confidently. 

The options are clear: mortgage lenders must adapt to the modern lending environment or risk being left behind by borrowers seeking speed and personalization.

Key takeaways:

  • Consumers expect a fast, convenient lending process, and mortgage lenders must modernize operations to meet this demand and survive in a competitive market.
  • The complexities of mortgage lending require purpose-built AI technologies to enable faster, more informed financial decisions.
  • AI can drive efficiency and accuracy in mortgage lending, but companies must ensure that teams are confident in their available tools to make the most of their investment.