Impact of Automation on Mortgage Operations

I just showed my financials to a mortgage tech executive. He couldn't believe what he was seeing. Our all-in manufacturing costs cost per loan: 34 basis points. • Opening (no employees - fully automated) • Processing • Underwriting • Closing • Funding • Post-Closing • QC Industry average: 64 bps per loan. His reaction: "How is that even possible?" We were at 64 bps. Then I heard a podcast from Stan Middleman saying Freedom was at 30 bps. It drove me insane - once I know something is possible, I’m a dog with a bone about it. Many companies have zero idea what their real costs are. That’s the first step. They know they have a problem. But they don’t know what to do about it. We spent 3 years rebuilding our entire cost structure: • Tracked every minute of every employee's time • Connected time tracking to payroll data • Built dashboards showing cost per funded loan • Identified exactly where money was being wasted What we discovered: Absolute chaos. Go spend a day with a closer or processor. It’s incredible that they accomplish anything. The difference isn't talent. It's systems. It’s data. It’s aligned incentives. It’s ruthless prioritization. Example of broken mortgage operations: Processor gets a file. Needs to order title work. • Opens an email • Manually enters borrower information • Sends email to title company • Calls title company to confirm order • Emails loan officer to update status • Updates file notes in 3 different systems • Sets manual calendar reminder to follow up Our system: API call automatically orders title work when file hits processing using AI to extract the data from the Purchase Contract. Borrower gets automated text with timeline. Loan officer gets automated status update. No manual work required. The result: What used to take 30 minutes now takes 30 seconds. Multiply this by every task in the mortgage process. That's how you get from 64 per loan to 34 basis points.

This lender went from 7-day clear-to-close to a 7-day close using agentic process automation. Most "AI solutions" in mortgage are just rebranded BPO operations with fancy interfaces. But one of the largest wholesale lenders just proved AI can actually transform lending operations. Here's what they did: They implemented agentic process automation in their closing department. The results? • Went from 7-day clear-to-close to 7-day total close time • Reduced closing staff from 14 people to just 3 • Maintained compliance and quality standards • Scaled operations while cutting costs Here's why this matters: Most lenders are rushing to implement chatbots and "AI assistants" with: • No clear strategy • No compliance guardrails • No real value proposition But this lender focused on applied AI - automating existing processes with measurable ROI. The key difference? Applied AI takes work you're already doing and makes it more efficient. Like using AI to process closing packages in seconds instead of days. That's real value.

I'm excited to share the latest insights from our joint study with HFS Research, "Reinventing the Non-Bank Mortgage Lending Journey in the Age of AI," which was recently featured in an article by HousingWire. This report highlights how 2025 is set to be a transformative year for non-bank mortgage lenders, as technology redefines experience, operations, and value across the mortgage lifecycle.   Key findings include: 74% of non-bank lenders are betting on innovation to drive differentiation, yet only 21% believe they are leading the pack. Agentic AI is emerging as the next big play, merging GenAI’s cognitive reasoning with automation’s precision. Compliance risk remains a challenge, with some lenders receiving up to 1,700 regulatory alerts in 2024. Intelligent Document Processing (IDP) is proving its worth with fast returns, especially in paper-heavy workflows. Outsourcing partnerships are being redefined, with full-service partnerships expected to rise from 30% to 42% by 2026. Automation will reach 68% of mortgage operations by 2026, blending technology, human expertise, and continuous improvement.   As we navigate through operational fatigue, regulatory pressures, and technological disruptions, it is imperative that we embrace purposeful innovation and redefine our strategies. By prioritizing technology with measurable outcomes and leveraging full-service partnerships, we can transform the mortgage lending journey and lead the industry into a new era of efficiency and value creation.   Read the HousingWire article: https://lnkd.in/e4XDJkC4   Download the full report: https://lnkd.in/eRtFhrBV   Read the release: https://lnkd.in/eEwTEHJq   #CognizantBFSI

AI is reshaping how mortgage brokers work Not in theory. In real business workflows. I recently interviewed Richard Wang - A true mortgage industry expert ↳ JD, MBA, CPA, lifelong loan originator, ultra athlete, true wine connoisseur, master networker, giver... Honestly, the list could fill a page ↳ Combines legal and finance background with deep lending expertise ↳ Runs Veridian Mortgage LLC with an awesome team operating across 6 states Here are some sharp insights from Richard: ↳ AI tools now extract data from tax returns and loan documents in minutes ↳ Brokers can upload a competitor’s loan estimate and instantly generate smarter client options ↳ Some lenders, like United Wholesale Mortgage, have launched ChatGPT-style tools for loan guidance ↳ AI assistants are now handling client calls, scheduling, follow-ups and routine queries Key takeaway AI is no longer optional in residential finance It is becoming core to how brokers compete and deliver better service The next 12 to 18 months will separate those who adopt early from those who fall behind 🔔 Follow Gaurav (Rav) Mendiratta for weekly updates on how AI is transforming real-world businesses #AI #Mortgage #RealEstateTech #SmallBusiness #Innovation #DigitalTransformation

This post is about the future of the mortgage industry with AI & technology. The majority of the people I spoke with have seen some level of AI involved at their company. Some companies are using it upfront from the digital mortgage application process all the way through servicing. My company is using AI for same day underwriting. The originators love it because of the speed. On the tech side, the originators have a system that allows them to access our LOS & OB on their phones anywhere in the world. All of our systems talk to one another as well. No multiple inputs needed. There are positives and negatives in regards to AI that must be addressed. Positives: Speed. Efficiency. Cost savings. Fraud detection. Routine tasks such as data entry & document processing can be automated. You can enhance the customer experience. Mistakes can be reduced. AI does not sleep. Much of the AI improves decision making & accuracy. The technology allows humans to focus on high level decisions. ChatGPT is very helpful to people branding on social media. Negatives/risks. Most of the clean files would go to AI; processors won't like that. The input is important. Who develops the algorithms & what information are they using? The loss of human engagement is a client retention risk. How do you build the AI into your platform? If you sign up for using AI, are you comfortable cutting the people because jobs will be lost? You could have some reputational risk. 97% of the people I spoke with believe that AI & Fintech are the waves of the future. It is happening right now at most companies. The companies that use the tech well, will reduce the cost of producing a loan. That will give their sales force a competitive advantage as some companies will give the LO's a better price out of the gates. The companies that don't embrace AI & fintech will have to find another way to reduce the cost of producing a loan. I know that several companies are leading the charge with AI & fintech. I would love for some of you experts to comment. Thanks in advance. #AI #Fintech #mortgage #thefuture #risk #rewards