With artificial intelligence in early phases of adoption in parts of the mortgage industry, those working in it are still trying to understand exactly how it works and may ultimately benefit them.
AI figured prominently at the Mortgage Bankers Association's annual conference this week in Denver both on the expo floor and on stage during several panel discussions. With the mortgage industry still
A point emphasized during a conversation with MBA Chair Laura Escobar was that while
"This is something that makes a recommendation, but, particularly at these phases where the models are still maturing, where comfort and trust is still being gained — it's important to have that other point of validation to say, 'Given these inputs, does this recommendation make sense?'"
Following are some of key areas AI can — and in some instances — already is playing a role to change how the home finance industry operates.
Climate risk modeling
A growing concern weighing on the minds of many in home lending this year is the effect of
A video narrated by Nvidia CEO Jensen Huang demonstrated the capabilities of the company's Earth-2 platform that created a digital twin of the planet. Combining weather simulations and graphics, Earth-2 employs a generative AI model to generate climate patterns and models quickly and at higher resolution than other methods in use. In turn, it allows forecasters to potentially forecast the arrival of natural disasters months ahead of when they occur.
Currently being used by Taiwan's weather administration, Nvidia expects that the tools can eventually move into highly localized forecasting down to city blocks, where the effects of infrastructure can be taken into account.
"if you're a creditor insurer, you're trying to figure out how you're going to price all of your insurance models for all the locations that you have, if you have visibility into where the hurricanes are going to head, you know where you're going to be paying and where you're you're not going to be paying," said David Tepoorten, Nvidia's director, global systems integrator partnerships.
"What would that mean to the underwriters and what would that mean to insurance carriers? It would be able to help people cover their homes while still not making themselves bankrupt by making their own beds," he said.
Fraud detection
As AI further develops, financial services industries will see regulators also focus on their investments in the technology.
"By not adopting this, we are putting ourselves at risk because it is not only the good actors who have access to this technology, there are also bad actors that have access to this technology," Peterson said.
Regulators are rapidly ramping up their fraud-detection efforts thanks to AI. In fiscal year 2024, the U.S. Department of the Treasury prevented or recovered more than $4 billion in fraudulent payments, up from almost $653 million over the prior 12 months in part due to new artificial intelligence.
Amazon AWS is "expanding that influence as well as we build out those communities in terms of understanding where there's fraud, patterns of financial crime, and actually sharing that also with the intelligence community," Peterson said.
"Together, we can bring all of those pieces together in understanding where there are threats to our system and how to mitigate those across the board," she added.
Intelligent document processing
The ability to extract information from documents is one of the use cases where AI is employed today in lending and touted as an area where artificial intelligence will benefit the mortgage industry most. Among the many things it can do is decipher handwritten answers or checkboxes on forms or take other documents, such as drivers licenses and passports, normalizing field names even when not labeled.
"All these different documents that you have no idea what these things look like, these AIs were able to go in there and grab information out there and make it usable," Tepoorten said.
"When you start this journey, you're going to take hundreds of these documents. You're not going to have one person go through each one of these documents. You're going to bring them all, and it's all going to be into your system and ready to use after this gets absorbed."
Customer experience
Even with growing adoption of technology, mortgage will remain a customer-centric business that requires frequent one-on-one interactions. AI can help alleviate customer frustration by reading signals during an interaction and providing a
Don't be surprised to see digital agents shadowing new contact center agents get up to speed on the job, while still assisting those well versed in the job.
"You can have an agent on the same telephone call with the human person, determining what the customer is asking about, what their sentiment is, what's the next steps that could be taken," Tepoorten said. "And it will give you a little mini tree on how you can work with that customer."
AI will also help read a potential new borrower's financial situation to identify products that work best for them based on past data collected.
"You really have an assistant to the human, which helps get to the highly personalized view of what that customer may be eligible for, what they may have questions or concerns about or just things that they may not be aware of like programs that you can bring to their attention," Peterson noted.
