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How Artificial Intelligence Can Boost Efficiency, Productivity, and Convenience in a Mortgage Lending Cycle





Artificial Intelligence has been a part of the lending industry for a while, but mortgage loan originators have been slower to adopt the technology than other businesses. They are integrating it into certain parts of the lending cycle, but it's still rare to see companies using automation through the whole mortgage loan process.


What Happened to the Paperless Office?

The 1980's prediction of a paperless office never came to fruition. In this industry, the opposite is true. Since mortgage lending is complicated and involves stacks of paper (sometimes hundreds of sheets deep) and huge amounts of data, it makes sense for all stakeholders to implement AI.


No matter where in the lending cycle it is used, AI can:

  • reduce data processing time
  • tame workload
  • reduce costs
  • increase productivity
  • increase security


AI also makes securing a mortgage simpler and more convenient for consumers.


The Mortgage Lending Cycle

In every stage of the lending cycle, AI has the power to simplify the process. Just think of the cost savings in paper and ink alone!


Mortgage Loan Origination

Lenders are already using chatbots and digital applications to collect information and advise clients. Using AI, borrowers can find rates, determine affordability, and apply for mortgages online. Digital advisors can approve or decline loans and help borrowers plan for the future.


Document Management and Processing

AI can help you handle document management issues with ease.


Automated application systems prompt clients to upload their information through secure, encrypted portals, request documents tailored toward the recommended products, and send reminders when necessary.


Systems sort, split, categorize, and consistently name documents, converting images and objects to text. Brokers and underwriters can retrieve searchable documents to find info quickly. No more lost documents or multiple requests for the same thing.

With client banking integration, AI can compare historical records with data points found on the internet to validate employment, income level, and credit history. While document specialists might take hours to sort through pay stubs, bank statements, and tax records, automated systems can efficiently verify the same information and use it to make projections in seconds.


Since AI can pick up errors or inconsistencies across documents that a person may miss, it is also useful in fraud prevention.


Underwriting, Property Valuation, and Structuring Best-Fitting Deals

AI-powered systems can easily keep up with changing lender guidelines to identify the best products and rates for applicants while offering lenders better risk management. Machine learning means systems can be trained by exceptions made by humans for specific clients or those in a similar cohort.


While a home appraiser could take several days to schedule, view, and report to the lender, an AI-powered home appraisal can analyze the property, its history, and the neighborhood to come up with a valuation almost instantly.


Closing and Beyond

E-signatures on applications, commitments, and solicitor documents have become commonplace, especially during the onset of the pandemic when in-person visits were limited.


After funding, borrowers may use chatbots to get support when high call-volume is an issue. With AI, lenders can monitor clients, identify borrowers at risk of default, and pursue strategies such as loan restructuring and payment deferral to keep clients in their homes.


AI helps brokerages and lenders maintain compliance, ensuring documents are always available upon request.


Customer Relationship Management (CRM)

Online CRMs bring the process full circle. Using AI, CRMs can be integrated with deal management systems to help manage workflow, keep client communication flowing, recommend new products, and keep your company top of mind at renewal time.



Looking Ahead

In Canada, there are a limited number of Fintech companies, and only 20% of those are in the mortgages industry, so there is great potential and a lot of room for development in this area. The areas covered here only scratch the surface of AI in the mortgage industry.


Will artificial intelligence replace brokers and brick and mortar banks with fully digitized, end-to-end mortgage solutions? These options are available for those who want them, but for now, many people still want the advice and reassurance of a human to help them through the process.


While artificial intelligence and human intelligence are both necessary in today's mortgage industry, technology is set to take on a larger role. AI is transforming every stage of the mortgage cycle, from loan origination through to closing and follow-up, and can perform the entire process with speed, accuracy, and convenience.


Are you ready for more AI integration in your business? See how FundMore's AI-based underwriting and document management tools can help boost your business.