"Within the next 24 months, you're going to be able to have Yoda as your loan originator"
The rise of artificial intelligence has already had a transformative impact on the way businesses operate – and the coming year to 18 months will see an even greater revolution in the mortgage space, according to a leading broker.
Russell Petty (pictured), of Grow Mortgage, told Mortgage Professional America that with AI having evolved enormously even over the past year and a half, the role of the loan originator was set to see a significant shift down the line.
“It’s a very new technology, but it’s growing so quickly,” he said. “It’s not moving along like normal technology does. Right now, it’s an assistance to the originator – I think as we progress with it, it’s going to start replacing a lot of the things that originators do.
“I think there’s probably going to be some tech platforms or tech companies that come out with their own ‘AI originator’. I don’t know how that would work on a licensing standpoint, but I do see it going that way.”
Originators who are currently thriving will likely still find a way to continue growing their business and flourishing in the face of the AI revolution – but those currently doing many loans a month will likely find it “very, very tough” competing with that technology, according to Petty.
“Within the next 24 months, you’re going to be able to have Yoda as your loan originator,” he said. “He’s going to be available 24/7 and he’s going to know everything there is to know about loans, structuring a 1003, running finds, underwriting, processing, and all of this.
“Tom Brady is going to be your originator and you’ll be able to Zoom chat with him – it’ll be looking just like him. It’s going to be very interesting to see how an originator markets against something that knows loans and marketing better than [they do], and it doesn’t sleep.”
Enrique Braunschweiger, President and Broker-Owner at First West Financial, embraces artificial intelligence to enhance his video content creation despite not being as tech-savvy.
— Mortgage Professional America Magazine (@MPAMagazineUS) November 15, 2023
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How might lenders implement AI in the mortgage space?
Major companies on the retail side, particularly those with call centres, could gravitate towards using an AI caller that will call leads and get documents, Petty said, with borrowers also likely to increasingly structure their loans with the assistance of AI.
That may be part of the natural evolution of technology and its usage in the mortgage industry, which has already had a huge effect on how the space has operated in recent times.
“If you look over the past 10 years in especially the mortgage space and now a little bit in the real estate space, technology is coming out and making things so much easier,” he said. “We used to have to fax in submissions and credit report requests and the average turnaround time to close a loan was 40-something days, especially on wholesale.
“Now when you look around, we can close a loan in seven, eight days on average, but the margin has been cut in half because of that. So I think a lot of these tools are a help to the loan originator – but I think they’re also going to make it so much easier for the consumer to do the loan and that sort of things, [so] margins will be further compressed. But it’ll allow you to do more volume as long as that volume is in the marketplace.”
Why embracing technology is more important than ever
Uptake of artificial intelligence will be essential to the survival of loan originators looking ahead, according to Petty – with mortgage professionals set to sink or swim based on whether they fully embrace technology and the advantages it can offer.
“They’re either going to have to start using it or they’re going to have to get into a different industry, and the problem with that is most industries are going to be using AI,” he said. “It’s not a nice-to-have; it’s a necessity if they’re going to continue to do business in any relationship- or sales-based industry.”
The good news? It may seem daunting, but the technology is both simple to pick up and can be incredibly useful for originators and other mortgage professionals in their daily work, Petty said.
“I would just tell people: take a look at it, download it, use the free version to start,” he said. “It will multiply your productivity by 10 and your ability to scale within weeks if you start using it the right way. The things that it can do are incredible – and it’s insanely easy to configure on a base level.
“If you can think of it, you can probably have AI do it – and 99% of it can be done in five or 10 minutes.”
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