AI is Coming, but it’s Not What You Think

To many consumers, it appears that AI just screamed onto the scene with the release of GPT-3. In truth, these technologies have been under development for a long time.

Now that GPT-4 is in the headlines, some people are starting to wonder how close we are to living through H.G. Wells’ War of the Worlds. That’s not something we should be worrying about, and not just because H.G. Wells was writing about Martians and not AI-powered robots.

Many are assuming that now that we have smart chatbots, they’ll begin running our businesses. While that’s not likely at all for the foreseeable future, we will be using AI to make running our businesses easier, on ourselves and those we serve.

In fact, it’s already happening all around us.

Take your local dentist, for example. In the old days (like last year), creating a new crown was a difficult process for the dentist and often a painful one for the patient. A little metal harness is often used to surround the tooth while a cast is made, which is then shipped off to the lab where the crown is created.

That’s the old way. AI has transformed that for some dentists.

Today, a tiny camera on the tip of a pen is inserted into the patient’s mouth. After taking pictures from various angles, the AI combines them into a 3D model. From this digital image, a new mold is created and a perfect crown is the result.

Advanced technology delivering real efficiencies and improvement in experience for consumers and those delivering the service.

When AI can make decisions for humans

One of the biggest fears we hear from consumers and even some professionals in our industry is that AI will one day be permitted to make decisions about a person’s ability to get credit without the intervention or input of any human.

Could the machine lock us out of homeownership?

Or even worse, from the industry’s perspective, could the machine make mistakes that approve bad loans that return to the lender in the form of buyback requests?

Two points here are worth considering.

First, our industry has been relying on the machine, at least in part, since the days that Fannie Mae and Freddie Mac introduced their automated underwriting tools. Our work since then has been largely about complying with the requirements coming back from these computer systems.

In one respect, the decision has already been made about approving the loan, now it’s just about providing the documentation to back it up.

And that’s the second thing. If there is one place where AI has been shown to really shine, it’s in identifying and indexing complex documents and then pulling data from those forms. That’s really what our human underwriters have spent most of their time on in the past.

Today, those human underwriters are beginning to age out. The exceptional employees are more expensive than ever.

And our AI tools just keep getting better at this job.

AI is coming for our industry, not like the Martians, but rather like the smoothly efficient software we’ve been using in our industry for decades, only now applied to different tasks for the benefit of both lenders and the borrowers they serve.

By Jim Rosen, EVP, Services at Mortgage Cadence 

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Mortgage Cadence: 
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