How AI Is Impacting Mortgage Lending Processes

ai technology disrupting mortgage lending artificial intelligence home loans

The typical mortgage lending system has become archaic until just recently. For too long, the mortgage industry has relied on manual processes, paperwork, and legacy systems. Even as new technology has emerged to disrupt adjacent sectors, most mortgage lenders continued to lag behind, reluctant to let go of their existing operations. Mortgage brokers and banks are almost always ultra-conservative and afraid of change.

Finally, the industry may be on the brink of a digital transformation. AI offers a promising solution to reduce costs, accelerate the speed at which loans can be closed, reduce (or eliminate) errors, and improve customer experience. Here is why artificial intelligence can help mortgage lenders and brokers. 

Introducing AI 

Before diving into the potential applications of AI for the mortgage industry, it is vital to clarify what the technology entails. There are three main types of AI to be aware of: RPA, AI, and machine learning. 


The simplest type of artificial intelligence is robotic process automation (RPA), which programs a machine to perform a specific function. These bots can’t act independently or make their own decisions; they can only follow the particular commands they have been given. 

You have probably come across them yourself already. Chatbots on websites are a perfect example, as are social media bots that give specific comments to certain keywords like on Reddit, Instagram, or Twitter. 


AI is a somewhat broad term that describes a machine that can perform human-like functions. Unlike RPA, it’s capable of reasoning, problem-solving, and taking different actions depending on environmental cues. This makes it one step closer to imitating humans. 

In the context of mortgages, AI can read a document and extract relevant information. 

Machine Learning 

Machine learning takes AI a step further. Not only is it capable of reasoning, but it can also analyze information, learn from it, and use that to make predictions and recommendations. In some cases, this can mean it is even more effective than humans. AI and the mortgage industry. 

As anyone who has ever taken out a mortgage will know, the process involves a lot of documentation. Mortgage servicers are responsible for handling all this paperwork manually, which takes up a lot of their time and makes the process slower for customers. Even worse, it increases the probability of human errors, which cause delays and stress. 

The use of automation means time-intensive data entry work can be performed by technology, freeing workers up to focus on more important tasks and provide customer service. 

Thanks to recent developments in AI, like machine learning, technology is now becoming smart enough to do this work with minimal human supervision and a low chance of errors. Tasks it can perform with home loans include: 

• Gathering information 
• Reviewing documents 
• Performing verification checks 

This helps to remove barriers and friction for everyone involved in the mortgage process, bringing down costs and providing a better customer experience. 

Introducing AI Powered Lending Platforms 

AI offers a promising solution to transform the industry, which is why mortgage automation platforms plan to leverage it. The mortgage origination process currently consists of various manual tasks that slow companies down and result in inefficiency and errors. Simply put, comparing the best refinance loan rates or home loans without the use of technology is troublesome. 

These modern day mortgage lenders use machine learning technologies to extract, process, understand, and classify data, allowing mortgage providers to offer better service to more customers and boost productivity. Lenders can then reduce their turn times and costs and scale their operations more quickly.

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