AI’s Superpower: Freeing the Human User


BLOG VIEW: Artificial intelligence, or at least the idea of it, has been around for a very long time. Some reports put the first mention of AI in a college lab at Dartmouth in 1956, the same year Elvis Presley’s Heartbreak Hotel hit the top of the pop charts. Very few of the readers of this publication were there at the time, but it’s hard to find anyone who hasn’t heard of Elvis and AI.

It’s the actual applications of AI that are harder to find. But that is changing.

Sure, we have ChatGPT now, and that’s caused a media sensation, but few understand where it came from and how to use it. That’s true here in the mortgage business, as well. Lots of folks are talking about AI, but few know how to use it, where to employ it or why.

The last question is the easiest to answer.

Why We Need More AI in Our Software Now

In the months ahead, we’re going to see more uses for AI in our space across a number of different functions. There are a number of reasons mortgage originators are going to find this topic very interesting.

But perhaps the best reason our industry needs to employ more AI-powered software is because it frees up our people to focus on higher value tasks.

One of the biggest problems that lenders have is that they employ humans  throughout their loan origination process. Technology acquisition and implementation have outpaced our industry’s ability to make effective use of the solutions. Automation has helped, but more often than not, people are literally widgets in their machine because they are smart, nimble and able to adapt.

Since lenders already have great lending automation, the information comes into the LOS digitally and then the lender hires human underwriters and loan processors. These people are tasked with sitting in front of a computer each day, all day, where they must find a loan icon on a screen, click on it to bring up a document, read the document, add a piece of data to that document or take one from it to put on another document, then hit a button and repeat.

They do this all day long. Is it any wonder we have a recruiting problem in this industry?

Don’t get me wrong, what they are providing is valuable, but it’s not game changing. Great employees aren’t looking for a job where their success is based on widget production. Too many in our industry are still looking at their businesses in terms of adding technology that will let people process more widgets.

We have excess capacity in the industry right now, but it won’t always be that way. We have to reimagine mortgage loan origination from the human view, if we want to keep our best people engaged. 

The lure of AI, ML and other advanced technologies, is that they promise the possibility of liberation – freeing the user from repetitive or relatively predictable interactions, allowing the employees to focus on more valuable processes, pay attention to exceptions, and deliver value through higher ordered tasks. 

Automation That Can Think Like a Human

Freeing up people to do other things has long been the promise of automation, but what lenders have discovered over the years, especially as they began to face oversight from the newest government agency, was that automation has limits, and at the end of the day, you still need people to sign off on the work your automation is doing.

No regulator will take kindly to a lender claiming that a mistake (or more likely, a great many mistakes on loans that traveled down the same automated manufacturing process) was caused by a computer error. So, QA/QC has been staffed up to keep an eye on what the automation is doing.

But what if the computer could perform QC on its own actions? What if it was smart enough to evaluate its own work and learn from past mistakes? This is the power AI offers our industry.

The real superpower of AI is that it can take over not just the simple manual processes that were once completed by humans, but also many of the cognitive functions that only humans could do in the past.

The result is that the lenders can free up staff to focus on building stronger borrower relationships, provide better customer service, find new sources of business, and generally make their businesses stronger and more sustainable.

How will they do that, exactly? That’s the exciting part. As we roll out more AI-powered tools, lenders will have the flexibility to get strategic about how they deploy their human resources. They’ll all approach that task differently and the industry leaders are likely to surprise us with their vision and creativity.

Jim Rosen is executive vice president of services at Mortgage Cadence.

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