"Alexa, Buy a House!" (6 min read)
The Real Estate Settlement Services and Mortgage Servicing industries are some of the many sectors that are being disrupted by the ever-increasing influence of artificial intelligence (AI) platforms. Mortgage Professional America (MPA) even listed AI among the top Real Estate trends of 2023. From underwriting to servicing, AI is automating many tasks in the mortgage origination and processing space. While this can mean increased efficiency and cost savings for lenders and consumers alike, it also has the potential to change the industry as we know it. In this blog post, we'll explore the effects of AI on the settlement services industry, and what the future may hold for this critical sector.
As AI programs grow more sophisticated, they will likely continue displacing human jobs in a variety of industries. The mortgage services industry is probably no exception.
The ever-changing business conditions of the future are disrupting the way many industries fundamentally function. For years, the mortgage services industry has relied on mostly human workers to manage appraisals, process files, and conduct other important operations. But with advancements in AI, these changing opportunities create a potential for automation leading to increased efficiencies and potential cost savings. As a result, certain job losses in the mortgage services industry are indeed anticipated - but this doesn't mean that human workers will no longer be needed. Rather, this evolving landscape is encouraging companies to specialize more and to redesign important roles in order to maximize efficiencies while leveraging both machine learning and human expertise to help deliver results.
One of the benefits of AI is that it can help speed up mortgage applications and approvals.
Securing a home mortgage used to be a more time-consuming process full of excess paperwork and back and forth communication that could take weeks, if not months, to complete. However, with the continual adoptions of AI and the use of smart devices, customers are more than ever expecting nearly instant gratification. With AI's processing power and predictive modeling, applications are processed faster than ever before. Plus, smart algorithms can forecast interest rates to make sure you're getting the best deal at any given moment. Which, in theory, means no more scouring the internet for days trying to find the best mortgage rate. Essentially, AI is revolutionizing the industry by allowing for more affordable, faster mortgages that help keep providers competitive in this changing market.
Another benefit of using AI in the mortgage servicing industry is that it can help to reduce errors.
Utilizing AI in the mortgage industry has a multitude of advantages, particularly in the prevention of potential Title Insurance claims caused by errors and mistakes during loan application and approval phase. It is time consuming for humans to review applications and when it comes to consumer protection and government regulations, mistakes can sometimes result in costly legal action. As pointed out in a National Mortgage News piece, AI can help reduce lending bias and “collaboration will allow the credit union to evaluate and potentially approve more customers in underserved communities by utilizing an ML-based algorithm in its underwriting instead of relying just on FICO scores.” With the help of artificial intelligence, processes become more efficient as fewer mistakes are made and quickly detected. As such, AI is can be an invaluable tool for lenders to remain compliant with both industry standards and government regulations.
AI can also be used to provide faster customer service by answering questions and addressing concerns more quickly and efficiently than maybe a human counterpart.
Frankly, AI technology is revolutionizing the way customer service is delivered. With AI, companies are able to provide customers with shorter wait times and faster resolution when issues arise. This innovative solution helps reduce or eliminate unnecessary letters, emails, and phone calls while providing an additional layer of transparency to the process. This, in kind, enables customers to access answers or support when they need it most. AI-driven customer service technology offers an ease of use that enhances traditional methods, giving customers a faster service experience while allowing compliant firms to streamline costs long-term. Also, when an issue requires escalation, it allows experienced human customer service reps to pay more attention to said concerns.
What does the future hold? Frankly, it's difficult to say exactly how artificial intelligence will affect the industry with absolute certainty, but it's clear that it will have a significant impact.
As outlined by getsmarter.com, AI has already changed the landscape of many industries, from healthcare to transportation, and it is certain that its presence in the mortgage industry will continue to increase. Although challenging to predict exactly how, AI could create a brave new world for lenders and buyers alike as new technology opens up innovative tools to secure and service mortgages. Ultimately, AI is likely to significantly shape how we approach mortgages and real estate closings in the years ahead. The entire industry is facing a lot of change in the near future as AI grows more sophisticated and begins to replace human workers in at least some capacity. While this change may be difficult for some, it also presents a number of opportunities for those humans looking to adapt and advance in other more skilled areas. Mortgage related companies that are able to embrace AI may be able to take advantage of benefits like faster turnaround times, fewer mistakes, and more efficient customer service, all while leveraging experienced humans to add the…well, the “human touch.” Those higher level “human touch” aspects can be focused on within leadership and decision making to keep customers coming back for more. It's impossible to say exactly how the mortgage servicing industry will change in the coming years, but one thing is certain: those who are prepared for AI one way or another will likely be the ones who come out ahead.
Anderson|Biro is a full-service, Executive Search firm dedicated to the Financial Services sector around the country. We source talent to service all aspects of the Land Title Insurance, Settlement, and Appraisal industries. We offer quality solutions for clients in these primary fields and beyond. Our candidates are screened for specific industry experience, outstanding track records, and values that complement your mission and culture. We have also built successful partnerships with leading Homebuilders, iBuyers, Fintech, Servicers, Law Firms, Real Estate Brokerages, and Lenders with direct or indirect stakes around the real estate closing table.