How Mortgage Lenders Can Harness AI & Automation in 2023


How Mortgage Lenders Can Harness AI & Automation in 2023

April 7, 2023
Certified Credit

Technology has transformed the way people do business in nearly every industry. But, while digital transformation in the mortgage industry has been slower than some, it’s quickly accelerating.

Artificial intelligence (AI) and automation, in particular, have the potential to skyrocket mortgage lenders’ productivity, profitability, and borrower experience. Even so, many lenders are unsure of how to strike the balance between technology and the human element.

In this article, we’ll explain how mortgage lenders can use technology to enhance their customer service and nurture long-lasting relationships with borrowers. We’ll also discuss how mortgage lenders can select the most valuable solutions for their tech stacks this year.

4 Benefits of Employing AI and Automation

To start, let’s review four powerful benefits you can enjoy when you employ AI and automation in your mortgage lending business:

#1 Simplify Processes & Reduce Friction in Your Origination Process

While it’s natural to resist change, embracing AI and automation can make your life a lot easier. These tools can take over tedious tasks that may be bogging down your workdays.

Here are just a few examples:

    • Verification of income and employment – Let’s face it, VOI/E is no easy task… Manually verifying applicants’ income and employment information can take a lot of time. You may have to call their employers several times before you get the information you need. For these reasons, manual VOE can be costly, time-consuming, and wrought with inconsistencies. If you use third-party vendors, you may need to keep track of multiple orders and navigate different ordering systems. This can lead to ordering unnecessary reports and additional origination fees.

      In contrast, when you use an automated VOE solution like Cascade VOE, you can let technology do this cumbersome work for you. Cascade VOE cycles through your custom selection of third-party vendors and consumer-permission partners until it returns a hit. If no hit is returned, our team at Certified Credit can complete the manual VOE process for you. By outsourcing your VOE to technology, you can streamline your workload and improve the consistency of your verification process.

    • Undisclosed debt monitoring – After you pull a borrower’s initial credit report, they enter the “quiet period.” This period lasts until the day that they close on their loan. If your borrower incurs new debt during this time, they may fall below your eligibility thresholds. Discovering this upon closing can lead to costly loan fallout or repurchase demands from secondary market investors.

      Rather than anxiously checking your borrowers’ credit manually throughout the quiet period or waiting until you pull a Refresh Credit Report, you can let automation keep an eye out on your behalf using Cascade Undisclosed Debt Monitoring (UDM). This tool monitors your borrowers’ credit reports for up to 120 days after their initial credit pull. If any noteworthy credit data is uncovered, you’ll be notified within 24 hours.

As you can see, automation can streamline your team’s workloads and free up hours of time each week.

#2 Spend More Hours on Revenue-Generating Activities

While AI and automation can take over many aspects of your lending process, they don’t eliminate the need for the human element entirely. Instead, they simply make it easier for your team to do what technology can’t—nurture valuable relationships with leads, applicants, and existing clients.

A few ways lenders can leverage AI & automation in today’s market to enhance their revenue generating efforts are:

    • Borrower retention and lead generation – While you’ll always need to allocate time to attracting applicants, you don’t have to do it all on your own. Automation can deliver qualified leads your way without you having to lift a finger.

For example, Cascade Alerts can do so by monitoring your past and present borrowers’ credit reports for mortgage inquiries. After that, it will alert you as soon as one is in the market for a new mortgage. By reaching out to these leads right away, you may be able to earn their repeat business and boost your borrower retention rate.

Better yet, Cascade Alerts makes it so you don’t need to reach out to past clients at random hoping they’re in the market for a new loan. Instead, you can simply target the clients that are clearly shopping around already.

    • Planning and marketing – ChatGPT is an AI chatbot that’s gained incredible traction in recent months. It uses deep learning techniques to produce human-like, conversational responses to search queries. It’s already altered the way many industries do business.

ChatGPT can help lenders in a variety of ways. For example, you can use it to plan out your social media campaigns, create content calendars, generate marketing email drafts, and translate your loan materials into different languages. While you’ll need to review ChatGPT’s content to ensure its accuracy and tone, it can simplify your day-to-day tasks considerably.

With automation and AI taking care of the mundane tasks, your team will have more time to:

    • Network with other mortgage professionals
    • Make a positive impression with new leads
    • Build rapport and earn trust with prospective applicants
    • Educate applicants on the mortgage lending process and housing market
    • Establish memorable connections with borrowers that garner repeat business
    • Reach out to past customers when they’re in the market for new mortgages

In other words, your team can focus on what humans do best and let robots take care of the rest.

#3  Satisfy Borrower’s Increasing Expectations

Today’s borrowers operate in a fast-paced, digital world. They’re used to online shopping, same-day delivery, instant messaging, and constant interconnectedness. Thus, when these borrowers are ready to apply for mortgages, they want to research lenders online and receive quick responses.[i]

If you want to satisfy these borrowers’ expectations, automation and AI can help. Here’s how:

    • Automation allows you to offer instant prequalification online – When borrowers shop around for lenders, they don’t want to wait days to find out which ones they prequalify with. Instead, they want instant responses. Without automation, providing instant prequalification responses is next to impossible. Luckily, when you use an automated tool like Cascade Prequal, it’s a breeze.

      Cascade Prequal uses automation to compare applicants’ submission data and soft pull credit reports with your eligibility requirements. After that, it can generate instant responses, satisfying your borrowers’ expectations from the very start.

      While technology does the hard work, you still get to customize your prequalification process. You can determine your credit thresholds and whether you use credit reports from one, two, or all three credit bureaus.

    • Automation prevents you from asking your borrowers for repeat information – Some borrowers may become frustrated if you ask them for the same information repeatedly. You can prevent this issue by using tech solutions that integrate with your LOS.

      At Certified Credit, many of our automated solutions can connect with your preferred LOS. With all of your borrower data populating in one place, you can pull it up as needed, rather than searching for it across platforms or requesting it from your borrowers multiple times.

    • Automation can help you deliver real-time answers to borrower inquiries – Many consumers lack education about credit, mortgages, and the housing market. As a result, your applicants will likely have a host of questions for you, ranging from basic FAQs to complex inquiries you need to research before you provide an answer.

      You can give leads the information they need in real-time by setting up a chatbot on your customer-facing website. AI chatbots use natural language processing to interpret questions and deliver thoughtful answers instantaneously.[ii] Featuring one on your website allows you to divert generic questions away from your team and let AI answer them instead.

      You can also use AI to assist you in real-time if an applicant asks a tough question over the phone. Rather than saying that you’ll get back to them later on, you can quickly locate the information on the spot.

#4 Save Money By Improving Efficiency

Some mortgage lenders are reluctant to update their technology due to the perceived costs involved. While adopting new technology requires an initial investment, many mortgage lending solutions pay for themselves over time. After that, automation and AI can continue to generate cost savings for years to come. According to Jen Peachman of Capacity, she’s seen these tools save mortgage lenders anywhere from $1,000 to tens of thousands of dollars a month.

If you want in on these cost savings, there’s no better time to invest in new technology than the present. This slow market gives you a unique opportunity to innovate your workflows with fewer distractions. Once business picks up again, you’ll be positioned to extract even greater profits.

How To Select The Right AI and Automation Tools For Your Mortgage Lending Business

Now that you know the benefits of AI and automation, you may be eager to adopt some new tech solutions this year. So, how can you get started?

Consider the Four P’s

As you evaluate new tech solutions, make sure to take into account the four P’s:

    1. Profitability – Will this solution drive revenue or lower expenses?
    2. Productivity – Will this solution help you accomplish more with fewer people, resources, or time?
    3. Prevention – Will this solution make it easy to stay in compliance?
    4. People – Will this solution enhance the experience of your employees and/or customers?

If a tech solution meets these four P’s, you can feel confident in your decision to invest in it.

Work With a Reliable Vendor Partner

Optimizing your tech stack is easier when you have an experienced partner guiding you through the process. Here at Certified Credit, we have nearly four decades of experience helping our clients optimize their workflows. We also know that no two mortgage lenders’ processes are the same. That’s why we study our clients’ processes from start to finish, learn about their pain points, and suggest the best solutions from there.

Grow Your Business With Certified Credit’s Automated Mortgage Lending Solutions

In summary, borrowers prefer to do business with lenders they know, like, and trust. By delegating aspects of the lending process that don’t require a human touch to technology, you can focus your attention on building relationships and delivering exceptional customer service.

If you want to upgrade your business with mortgage lending tools that leverage AI and automation, Certified Credit can help. We offer a growing suite of automated lending solutions, including Cascade Alerts, Cascade Prequal, Cascade VOE, and Cascade UDM. We also offer:

    • Affordable credit reports
    • Helpful credit score improvement tools
    • Flood zone determinations
    • Advanced fraud and risk support
    • Settlement services

You can find out more about our products and services by scheduling a credit consultation with our team today.

If you want to learn more about AI and automation in the mortgage lending space, check out our Talk Data Podcast Episode with Jen Peachman here.



[i] McKinsey & Company. Competing on customer experience in US mortgage.

[ii] TechTarget. Natural language processing (NLP).