Could a lack of regulation around AI put borrowers' data privacy at risk?
Mortgage brokers use new artificial intelligence (AI) and automation tools daily – but some in the industry are concerned that endless AI data collection could make that data vulnerable to hackers.
Phil Crescenzo Jr. (pictured top), vice president of the Southeast division at Nation One Mortgage Corporation, believes that at some point, there will be federal regulations to control the use of AI in the mortgage process.
“Right now, there aren’t any regulations,” Crescenzo Jr told Mortgage Professional America. That’s the most concerning part. What you can do, or what you can’t do. Eventually, we will see regulations. I think it’s going to take a breach of information or a complaint.”
While it is unclear how the Trump Administration will approach artificial intelligence, early indications appear to suggest that it will limit the amount of AI technology regulation.
Crescenzo notes that some AI being used may be as innocent as automated notetaking in meetings. And while existing regulations already protect most of the information collected during the mortgage process, other information could be collected by accident, outside of the consent of a loan application.
“There are more tools entering the industry, from CRM to efficiency tools,” Crescenzo said. “Even automated note takers. Could you use one of those note takers and end up having information shared that wasn’t supposed to be shared?”
According to Crescenzo, AI is now pervasive across all areas of technology, so much so that people don’t even notice it anymore. The idea that technology such as smartphones and automated home assistants are always listening, more information gets collected and is at risk.
Most people don’t even give it a second thought, he said.
“You become desensitized to it,” Crescenzo said. “Every major company and piece of software has an AI feature. It’s why at some point we’re going to have regulations to try to control it.”
Companies race to implement new technology
Mortgage companies are constantly adding new AI technology. United Wholesale Mortgage (UWM), the nation’s largest mortgage lender, announced an agreement with Google Cloud last week, hoping it will streamline underwriting and document processing while improving client-facing tools.
In December, A&D Mortgage launched an AI guideline assistant for non-QM mortgages. It provides real-time, accurate responses to queries, limiting the need for manual searches.
Crescenzo said that companies are competing to add the latest technology to the mortgage process.
“It’s an arms race, and everyone’s going to war,” Crescenzo said. “All of the bigger institutions are all-in on AI solutions for servicing and refinancing.”
AI technology is also important for targeting younger home buyers. Paul Leara, mortgage broker and owner of Mountain Mortgage LLC, told Mortgage Professional America that the key to appealing to younger borrowers was technology to make the process as smooth as possible.
“If you’re at a bank, you need to have great technology and an easy process, which is not easy to have control over at a bank,” Leara said. “I used to be at a bank, and I understand how all that works. Banks can be very rigid. Mortgages are complicated, and you can’t get rid of the steps, but you can make it easier.”
Paul Leara of Mountain Mortgage LLC notes younger buyers prefer quick, tech-driven processes. His Fast Pass service, combined with AI tools, streamlines documentation and logistics, catering to busy millennials and Gen Z.https://t.co/SK681j1sAL
— Mortgage Professional America Magazine (@MPAMagazineUS) April 8, 2025
This technology goes far beyond helping during the lending process. Crescenzo notes that one of the major uses of automation is in lead generation for brokers.
“These companies can predict when to contact a client,” Crescenzo said. “What is going to put that client at a higher percentage of being a viable customer. They’re not targeting your data, they’re targeting categories.”
Companies will be able to predict when customers might be ready to refinance a loan or sell a property they’ve been holding on to, waiting for the right moment in the market.
“They can calculate a certain period of time or a certain region that might make a buyer move to the top of their list,” Crescenzo said. “They’re not looking for private data. They’re looking for when mortgages were closed. That is all public information.
“They can scan through that data and figure out which people bought during a certain period of time. Maybe that time was a high-interest rate period. Those customers become prime candidates to target.”
Not only are those candidates targeted, but the companies leveraging AI can target them before other brokers even know the customer is making a move.
Brokers aren’t going anywhere
Crescenzo believes there will be specific circumstances where most of the process will be automated.
“For the easiest loans with the best borrowers, AI will be able to automate almost all of it,” Crescenzo said. “For borrowers with clean credit, 20% down, no variables, it could mostly be automated.”
Some people believe that eventually AI and automation will make mortgage brokers obsolete. Crescenzo said that will never happen.
“There’s a big push to automate everything,” he said. “That’s not going to happen. People are trying to make everything digital. But a consumer still wants a broker to help them through the process.
“When things don’t go as planned, that’s what you need a loan officer for.”
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