AI Enhancing the Borrower Experience

Sofia Rossato serves as President and General Manager of Floify, and has been building B2B tech companies for more than 25 years.

Headquartered in Boulder, Colorado, and a subsidiary of Porch Group Inc., Floify is a digital mortgage automation solution that streamlines the loan process by providing a secure application, communication, and document portal between lenders, borrowers, referral partners, and other mortgage stakeholders. Loan originators use the platform to collect and verify borrower documentation, track loan progress, communicate with borrowers and real estate agents, and close loans faster.

Previously, Rossato was the Managing Director and COO of the Information Division at $17 billion fintech IHS Markit, CEO of customer chat service SnapEngage, and SVP at Wall Street on Demand, which she helped guide to an acquisition by Goldman Sachs.

MortgagePoint recently had the chance to get Rossato’s insight on tech trends in the mortgage space, and what lies ahead for the industry in 2024 and beyond.

What’s in store for the housing market as we enter 2024? What are some of the headwinds that the industry will be faced with in the coming year?
Sofia Rossato: Many lenders have battened down the hatches and adopted the mantra “Survive ‘Til ’25” due to continued market headwinds.

While 2024 will likely see volume gains, most lenders will still be digging themselves out of the steep volume declines that accompanied 20-year interest rate highs in 2023.

Despite an aggressive 33% reduction in the mortgage workforce over the last 18 months, margin compression and profitability will remain significant challenges. From report orders to GSE buybacks and everything in between, the cost of doing business continues to rise.

The recent $1.8 billion ruling against NAR will likely have an immense impact on both lenders’ long-built referral strategies and affordability for first-time homebuyers should they have to pay buyer’s agents’ commissions on top of the hefty upfront costs of homebuying.

As artificial intelligence (AI) and machine learning (ML) continue to advance and evolve as everyday tools for the industry, will we ever be able to rely 100% on these tools or will the human touch always be a necessary part of the origination process?
Sofia Rossato: Drawing from my experience as the former CEO of an AI chatbot company, it’s evident that humans will need to remain involved in the origination process even as AI and machine learning technologies become very advanced. In fact, I am skeptical of claims that the entire lending process can be automated with AI given the sheer complexity of a highly regulated transaction that relies on an ecosystem of dozens of stakeholders.

Consumers desire a blend of self-service convenience and high-touch communication at the right moments. As AI and ML advance, their integration into the origination process is not about replacing the human touch, but enhancing efficiency, accuracy, and the overall borrower experience. The goal is to enhance the strengths of human expertise with machine capabilities to improve the origination process.

Realistically, we’ll see AI integrated at various layers of the mortgage process. For instance, AI can optimize fulfillment and underwriting processes, with the addition of AI to monitor the AI on these models. AI-powered chatbots will serve as guides for consumers while AI-powered chatbots will assist the originators guiding those consumers. And the list goes on.

Are there any trends in technology you are witnessing being employed by the industry to streamline operations?
Sofia Rossato: With greater competition from direct-to-consumer lenders and uncertainty about the future of buyer’s agent referral partnerships, many lenders are curating highly customized journeys that foster deeper borrower connections. A shift to the “own the experience” mentality will increasingly grow with the help of more accessible advanced automation that enables lenders to configure loan pipeline workflow and omnichannel communication based on loan product, consumer use case, team experience level and more.