Are Humans Part of the High-Tech Future of the Mortgage Industry?


As early as the mid 1990s, it was predicted that automation and digitization would sweep the mortgage industry within the coming decade, making human brokers obsolete and signatures on physical paper a thing of the past. The decade came and the decade went, and little change befell the mortgage industry. The same happened again with the next decade. Now, into the 3rd decade after those bold predictions, changes are finally starting to materialize, but in significantly different ways than originally predicted.


The mortgage industry is not like other industries, such as online shopping. You can replace malls with Amazon because most people don’t need or want human assistance in buying a pair of jeans or a new table. However, when it comes to buying a home, the single greatest investment most people will ever make in their lives, they’re usually not comfortable going at it alone. Most people want a trained expert advising them, making sure they get the best deal, and more often than not, just telling them what they’re doing is okay. Indeed, the facts bear this out: in 2015, each of the top 64 loan officers in the United States closed more deals than Lenda, one of the largest online mortgage companies, did as an entire business. If 64 separate individuals can do more business than one of the largest companies in a sector, that does not bode well for that sector.


Instead of computers and the internet replacing human brokers, the mortgage industry is likely heading in a different direction in the coming years, with a focus on every-improving AI and machine learning assisting humans rather than replacing them. The fear, of course, is that AI will replace human beings, but as has proven the case with online mortgages, humans will always be integral to the mortgage industry due to the magnitude of the purchasing decisions involved. Instead, AI will do things that humans would do, if they had the time and the processing power of supercomputers.


For instance, a database may have several thousand leads for whom a bank has credit scores. As those scores change, people who previously did not qualify for a mortgage will, and a machine-learning AI could constantly scour those leads for any changes, and alert brokers when old leads become applicable. Alternatively, AI could alert loan officers of increasing or decreasing home prices in any given area, or of new homes put on the market, or any countless other possibilities. The point here is that AI will not replace loan officers for the foreseeable future, but rather will assist them in doing the work that actual humans could do, but would find too tedious and time-consuming.


More interestingly, AI could also analyze interactions and phone conversations with clients and make suggestions that humans missed. For instance, if a loan officer has an extended phone conversation with a potential client that ends without a deal, the AI could analyze the conversation and find things the customer said that the officer didn’t pick up on, indicating a potential new angle from which to approach the sale.


In general, AI and machine learning will offer many new opportunities to aid and assist humans, but don’t expect them to replace people anytime soon, if ever in the mortgage industry. Humans will always be necessary to sell homes and property and help people along in the biggest financial decisions in their lives. In the near future, though, those human lenders and brokers will have the assistance of smart machines to make their jobs easier and more efficient without having to worry about those machines replacing them.

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