Mortgage Brokers Face AI Disruption—Here's Why That Matters

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Already folks, you have undoubtedly heard maybe even afraid of AI causing havoc

in the white collar arena. We're actually going to go a little bit deeper and we're going to talk

about mortgage brokers and the fact that AI might be on the cusp of replacing all mortgage brokers.

Steven, you've been in the market for multiple decades. When someone comes to you and says that AI

is going to replace all mortgage brokers, what say you? I don't know about all. I would say

maybe a good chunk only because you know certain loan programs are more rigid in the sense of

you know it's cookie cutter it's automated you know you kind of either fit the box and you don't

and so yeah I think with with AI it's just when you I think feel out just certain fields you know

for certain questions it should automatically know how to place your loan when it's kind of just

typically re-five purchase you know certain FICO score range, LTV loan amount, property type,

location, FICO score. After that you know you throw that out of the mix and most

Fannie Freddy government type sponsored loans are now you know underwritten through what they

call an AUS or an automated indirect system already. So now to simplify just the paperwork

logistics that's removing the middleman typically which is the person managing all that you know

people people flow if you can automate that now I mean they're redoing that with online bank

can you take a picture of your check or it's very similar I think now it'll be in the hands of

the borrower it eliminates certain third party fees I guess to some degree instead of like overhead

processing things of that nature if it's automated and then self self serve kind of a thing

that'll go the cost for bars as well because in a sense the the manual labor of

scanning something or taking a picture could eliminate $500 into a processing fee or something.

Yeah well we'll get more into this guy got a lot of follow-up question but I almost forgot to do

the marketing field now that's okay we didn't get too deep into it so again although we're

very happy for velocity mortgage capital all the ideas and topics discussed on this channel

that of my own so yeah let's get another one going yeah so when I really think about because again

I've been you know I've been getting mortgages as a consumer for three decades now right and I

personally feel there's there's there's the conventional side which I do not play in very often

obviously with you know the amount of assets that I have and then there's the DSCR side so let's

go with conventional yeah yeah you try so let's go with conventional because this is where I think AI

is coming fastest and quickest and will probably be the most impactful and it's kind of like

byling your taxes right if you like what is it quickened like you follow your taxes online for

free or some nonsense if all you have to paycheck it's kind of the same thing right if you're just

a W2 employee and you're buying your first home and you don't have a complex balance sheet

why couldn't you know a checklist of hey send me these seven documents why couldn't AI just

take it process it throw it in the automated system get approved eligible or not and then oh by

the way maybe at some point kick it to an underwriter for manual intervention if there's a no but

I think what happens with AI for conventional is it takes all of the inputs it gets approved

eligible if it's yes it's just completely AI and maybe what comes in are the nose or the question

marks right then that's where a human comes in it goes oh we couldn't scan that document because it

was too blurry or whatever right then you get human intervention agreed and even at that point

your streamline you know your whole process by kind of eliminating a good majority of the people

and maybe a couple of like quote-a-quote real expert sort right that didn't kind of manage those

kind of hairier quirky or deals yeah you know me a little non-conforming descendant degree but

not do me yeah so do me a favor let's let's go back to you know 2008 you're no what you're not

at velocity right this is way before you were here so 2008 how many physical bodies would touch

a brand new file like back in that day like would it be with are we thinking eight nine people

are or am I crazy well I mean if you're talking about both the retail side of the

originator all the through from the lender and everybody else abs everybody yeah at least that

is not more because again you know back then it was a lot more physical kind of office yeah yeah

yeah it was it was files like yeah files you know I mean a whole punchers with a little like

two-pronged thing and yeah remember and you got a submission form you stack up with the

line up and then boom boom boom everything else yeah the fires of the big blue folders with

the multiple tabs in it yep yep yep so yeah we had to physically carry around files and then

so again it would go from the originator to possibly their processor and from their processor

they would usually have to either fax something over physically sent over the file yeah

through what was that dang it there was a particular courier service yeah yeah

remember yeah yeah and there would be certain drop-off areas and the color of your your your envelope

would determine where I was going to get dropped off at and even certain lenders and places would

have like certain colors and color codes and stuff like that so crazy um so yeah and then from

there to the lender a set of person that would receive it would have to touch it and then would

be assigned to you know the processor and then after the process we touched it the underhour

have to touch it and then have to go back to the processor and then from there it would go to docs

and then the funder and then yeah so just crazy it's so crazy but yeah I mean with things being

streamlined with AI it replaces a lot of the minutia you know I mean that's just it's sometimes

it takes somebody to physically do that but it's just low low IQ kind of you know kind of performance

that would be needed so literally pushing paper 100% 100% and so yeah AI is going to take over

that so let me ask you let's go to the other side yeah could you envision a time in in today or

even in the not too distant future where Joe and you know Mary homeowner or want to be homeowner

feels out of file and you know one or less people touch it could you envision that happen

yes because again if it's automated right uh don't know the checklist upfront you

can provide that because again there's only so many docs yes not many pieces yeah not no and so

and a lot of time through the AI you can still have just a simple low nap now it'll typically

automatically allow the other areas that you know whatever automated system will need and so

you're almost giving them information to pre-underwrite the file to some degree and then now it's

just supplying the documentation to backup what you put into the into the system it's just that simple

so yeah I mean it's not if but when I mean I'm sure there's other you know some lenders are

already doing that to some extent like rock and mortgage you know you know place like that where

you can kind of briefly do something like that to some degree and it'll at least place you you

know you start up or you do a refire purchase what profit time so so there's a you know a couple

of specific automated questions in the beginning of their system that they'll kind of like

lead you down the path of what you know what department to go to or this or that so it is

already getting automated but I think the underwriting kind of portion of it is right behind that

pretty soon yeah and I don't want to be a doomer but I mean technology is moving at

light speed and you really got to figure things you know be proactive to figure out these things

otherwise yeah yeah so again when I when I step back for this I went to conventional first and

then there's what velocity does well and we've always at least I've called you correct me if I

wrong velocity is a make sense lender which means there's exceptions right and that's where AI is

not really going to play very well right the whole not just yet I would imagine I don't know

the technology is there yet you know I mean the way my brain is thinking that hey somebody could

write some sort of program but there's so many different nuances exactly the I think the either

the there's file types and technology and then taxes once they got enough of the data but I don't

know if you would be able to do so because there's so many different moving parts to where like you

know even the same scenario from deal to deal might be different just from location if you like

this probably better than the other other than the other mixx you know what I mean or it can just

be Wall Street appetite maybe on Tuesday they like it on a Thursday they don't oh no doubt I mean

it's happened before I mean the the changes in the market can be some of violent and sudden

we don't change it very often because we're not like knee-jerk reaction but when it does happen

it's like half a point you know up or down yeah yeah what you know in four months what in the quarter

points you know up for that so it could be violent but it's just not as as frequent um but yeah

agreed that it's to be Wall Street for our type of paper and it's a long way from at least

my estimation with my particular position at this you know for the time yeah when you think about

the low hanging fruit you're you're not the target it's the commercial side first yeah there's

just too much nuance at the moment and there's so many different variables that we can utilize

offset certain deficiencies that other lenders would be like no it's either you know in the box

or it's not and we can kind of pull out the box a little bit you know so that's the key yeah that's

that's the key yeah yeah so again I think AI is coming for lots of different jobs again what

we're interesting to me is what else happens right I think I think AI is really good at kind

of underwriting like a equals a b equals b c equals c it's not good at kind of variances of shades

right at least not yet again you could always experience it you know this is actually where I think

you know what what I was just thinking about is and I have no idea velocities doing this

I guess it doesn't matter but velocity has so much history with lending velocity could almost create

its own AI bot based on their on their specific files and I actually think that's going to be the

most valuable thing because I think there is one of the things I don't think people get about AI is

the data is going to prove valuable so the fact that velocity mortgage has been issuing loans for

you know decades there's a track record there and all of that could be fed into the system then

you could get performance and all of that and then velocity could have its own version of an AI

bot which probably makes it more efficient at least short cuts some things but the key here is

velocity can't let that get outside because that would be like given the way the secret sauce

just some degree yeah because then other people build a model as well like hey we could do

you know similar what they're doing my as well so yeah I don't know if velocity would ever build

that portion of it because there's so many different nuances at the end of the day

relationship building is another aspect about being a counting executive to nurture the account

sure I would not I would personally would not deal with an AI bot no chance right right right this

is not with the you know I mean like a machine to make sure you get pay versus somebody that you

build a relationship with and they've always come through for you as far as performance wise you

can count on them in a sense yeah and then there's also certain you know things that happen where

you can't call the computers amen there's this one off I really need you to push this one up front

because of this situation but with a human being you know so that human touch is always going to be

you know vital for now yeah but yeah until then I mean because there's so many different things

that can happen sometimes on the file you know that that you just need somebody hands on more

they can kind of understand and that's just a computer so yeah I feel alluded longer

a ways away I mean it's been 11 years so far I'm looking forward to maybe another 10 11 years

there you go yeah being your 60s get your 60s you're good yeah and at that point hey AI to go

burgers I won't it won't matter I won't matter to me at that point buddy there you go well this is

always fun conversation we just we never know what we're going to talk about when we get started

but if somebody wanted to reach out get a file started asking questions you know 50 40 10 you know

fast 50 all the great loan products of velocity has how do they get that started well before it's too

late you could still reach a human being down here at s down at velocity mortis.com you are a human

being you're not AI I am a human being yep anyway yeah email down there in the subject line please

put the acronym ORAAT which stands for one rental the time it makes it easier for me to find your

loan or your email I should say the body of the email brief your description which you're looking

for property address is going to be super helpful at least city and state maybe just to make sure

I lend there mid-Fightless score and best phone number to reach out and typically 48 to 72 hours

of the touch thank you buddy I appreciate you be right you too but

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