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Welcome to the Machine: AI in the Mortgage Business

Hyland digital toolTo many in the mortgage industry, the rise of artificial intelligence and machine learning—or AI/ML technology—seems inevitable. In fact, other industries that manage large amounts of data, such as health care and transportation, have already begun adopting these digital technologies with relative success. In the spirit of the times, Fannie Mae has released a survey that gauges the rise of automation among lenders, as well as their overall attitude toward the technology.

According to the survey’s results, a majority of lenders (60 percent) have some knowledge of AI/ML and its capabilities, though only a little more than a quarter (27 percent) have begun utilizing AI/ML specifically for their business. Among those who have, the majority are large and mid-sized institutions (42 and 40 percent, respectively), while 60 percent of smaller institutions have yet to tinker with the possibilities. Still, over half (58 percent) of all lenders surveyed by Fannie Mae anticipate the integration of AI/ML within the next few years.

Most of those surveyed seem evenly split about the most promising aspects of the technology, with more than half arguing for improved efficiency while the other half put the focus on enhancing the borrower’s experience. Among those lenders who have begun adopting the technology, it has been used primarily to analyze submitted borrower forms in the origination or underwriting process, as well as for the auto-indexing documents and routing tasks among employees.

Machine learning and AI also hold much promise for the servicing side of the business too, in the form of improved security tools and AI-driven customer service features such as voice-activated virtual assistants and chatbots to address customer questions.

The Fannie Mae survey suggests that the biggest hurdle to the implementation of more AI/ML technology within the industry is existing business infrastructure, followed next by the costs and a general skepticism that the technology will prove more effective. Twenty percent of lenders lack the necessary skills to utilize the technology, which presumably would require additional training.

Tracy Stephan, Director of Economic & Strategic Research with Fannie Mae, summarizes the survey’s results on their website here.

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