Mortgage Brokers Face AI Disruption—Here's Why That Matters

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1:02maybe a good chunk only because you know certain loan programs are more rigid in the sense of you know it's cookie cutter it's automated you know you kind of either fit the box and you don't and so yeah I think with with AI it's just when you I think feel out just certain fields you know for certain questions it should automatically know how to place your loan when it's kind of just typically re-five purchase you know certain FICO score range, LTV loan amount, property type, location, FICO score. After that you know you throw that out of the mix and most Fannie Freddy government type sponsored loans are now you know underwritten through what they call an AUS or an automated indirect system already. So now to simplify just the paperwork logistics that's removing the middleman typically which is the person managing all that you know people people flow if you can automate that now I mean they're redoing that with online bank can you take a picture of your check or it's very similar I think now it'll be in the hands of

2:03the borrower it eliminates certain third party fees I guess to some degree instead of like overhead processing things of that nature if it's automated and then self self serve kind of a thing that'll go the cost for bars as well because in a sense the the manual labor of scanning something or taking a picture could eliminate $500 into a processing fee or something. Yeah well we'll get more into this guy got a lot of follow-up question but I almost forgot to do the marketing field now that's okay we didn't get too deep into it so again although we're very happy for velocity mortgage capital all the ideas and topics discussed on this channel that of my own so yeah let's get another one going yeah so when I really think about because again I've been you know I've been getting mortgages as a consumer for three decades now right and I personally feel there's there's there's the conventional side which I do not play in very often obviously with you know the amount of assets that I have and then there's the DSCR side so let's go with conventional yeah yeah you try so let's go with conventional because this is where I think AI

3:08is coming fastest and quickest and will probably be the most impactful and it's kind of like byling your taxes right if you like what is it quickened like you follow your taxes online for free or some nonsense if all you have to paycheck it's kind of the same thing right if you're just a W2 employee and you're buying your first home and you don't have a complex balance sheet why couldn't you know a checklist of hey send me these seven documents why couldn't AI just take it process it throw it in the automated system get approved eligible or not and then oh by the way maybe at some point kick it to an underwriter for manual intervention if there's a no but I think what happens with AI for conventional is it takes all of the inputs it gets approved eligible if it's yes it's just completely AI and maybe what comes in are the nose or the question marks right then that's where a human comes in it goes oh we couldn't scan that document because it

4:12was too blurry or whatever right then you get human intervention agreed and even at that point your streamline you know your whole process by kind of eliminating a good majority of the people and maybe a couple of like quote-a-quote real expert sort right that didn't kind of manage those kind of hairier quirky or deals yeah you know me a little non-conforming descendant degree but not do me yeah so do me a favor let's let's go back to you know 2008 you're no what you're not at velocity right this is way before you were here so 2008 how many physical bodies would touch a brand new file like back in that day like would it be with are we thinking eight nine people are or am I crazy well I mean if you're talking about both the retail side of the originator all the through from the lender and everybody else abs everybody yeah at least that is not more because again you know back then it was a lot more physical kind of office yeah yeah yeah it was it was files like yeah files you know I mean a whole punchers with a little like

5:16two-pronged thing and yeah remember and you got a submission form you stack up with the line up and then boom boom boom everything else yeah the fires of the big blue folders with the multiple tabs in it yep yep yep so yeah we had to physically carry around files and then so again it would go from the originator to possibly their processor and from their processor they would usually have to either fax something over physically sent over the file yeah through what was that dang it there was a particular courier service yeah yeah remember yeah yeah and there would be certain drop-off areas and the color of your your your envelope would determine where I was going to get dropped off at and even certain lenders and places would have like certain colors and color codes and stuff like that so crazy um so yeah and then from there to the lender a set of person that would receive it would have to touch it and then would be assigned to you know the processor and then after the process we touched it the underhour have to touch it and then have to go back to the processor and then from there it would go to docs

6:18and then the funder and then yeah so just crazy it's so crazy but yeah I mean with things being streamlined with AI it replaces a lot of the minutia you know I mean that's just it's sometimes it takes somebody to physically do that but it's just low low IQ kind of you know kind of performance that would be needed so literally pushing paper 100% 100% and so yeah AI is going to take over that so let me ask you let's go to the other side yeah could you envision a time in in today or even in the not too distant future where Joe and you know Mary homeowner or want to be homeowner feels out of file and you know one or less people touch it could you envision that happen yes because again if it's automated right uh don't know the checklist upfront you can provide that because again there's only so many docs yes not many pieces yeah not no and so

7:21and a lot of time through the AI you can still have just a simple low nap now it'll typically automatically allow the other areas that you know whatever automated system will need and so you're almost giving them information to pre-underwrite the file to some degree and then now it's just supplying the documentation to backup what you put into the into the system it's just that simple so yeah I mean it's not if but when I mean I'm sure there's other you know some lenders are already doing that to some extent like rock and mortgage you know you know place like that where you can kind of briefly do something like that to some degree and it'll at least place you you know you start up or you do a refire purchase what profit time so so there's a you know a couple of specific automated questions in the beginning of their system that they'll kind of like lead you down the path of what you know what department to go to or this or that so it is already getting automated but I think the underwriting kind of portion of it is right behind that pretty soon yeah and I don't want to be a doomer but I mean technology is moving at light speed and you really got to figure things you know be proactive to figure out these things otherwise yeah yeah so again when I when I step back for this I went to conventional first and

8:27then there's what velocity does well and we've always at least I've called you correct me if I wrong velocity is a make sense lender which means there's exceptions right and that's where AI is not really going to play very well right the whole not just yet I would imagine I don't know the technology is there yet you know I mean the way my brain is thinking that hey somebody could write some sort of program but there's so many different nuances exactly the I think the either the there's file types and technology and then taxes once they got enough of the data but I don't know if you would be able to do so because there's so many different moving parts to where like you know even the same scenario from deal to deal might be different just from location if you like this probably better than the other other than the other mixx you know what I mean or it can just be Wall Street appetite maybe on Tuesday they like it on a Thursday they don't oh no doubt I mean it's happened before I mean the the changes in the market can be some of violent and sudden we don't change it very often because we're not like knee-jerk reaction but when it does happen

9:31it's like half a point you know up or down yeah yeah what you know in four months what in the quarter points you know up for that so it could be violent but it's just not as as frequent um but yeah agreed that it's to be Wall Street for our type of paper and it's a long way from at least my estimation with my particular position at this you know for the time yeah when you think about the low hanging fruit you're you're not the target it's the commercial side first yeah there's just too much nuance at the moment and there's so many different variables that we can utilize offset certain deficiencies that other lenders would be like no it's either you know in the box or it's not and we can kind of pull out the box a little bit you know so that's the key yeah that's that's the key yeah yeah so again I think AI is coming for lots of different jobs again what we're interesting to me is what else happens right I think I think AI is really good at kind of underwriting like a equals a b equals b c equals c it's not good at kind of variances of shades

10:33right at least not yet again you could always experience it you know this is actually where I think you know what what I was just thinking about is and I have no idea velocities doing this I guess it doesn't matter but velocity has so much history with lending velocity could almost create its own AI bot based on their on their specific files and I actually think that's going to be the most valuable thing because I think there is one of the things I don't think people get about AI is the data is going to prove valuable so the fact that velocity mortgage has been issuing loans for you know decades there's a track record there and all of that could be fed into the system then you could get performance and all of that and then velocity could have its own version of an AI bot which probably makes it more efficient at least short cuts some things but the key here is velocity can't let that get outside because that would be like given the way the secret sauce

11:35just some degree yeah because then other people build a model as well like hey we could do you know similar what they're doing my as well so yeah I don't know if velocity would ever build that portion of it because there's so many different nuances at the end of the day relationship building is another aspect about being a counting executive to nurture the account sure I would not I would personally would not deal with an AI bot no chance right right right this is not with the you know I mean like a machine to make sure you get pay versus somebody that you build a relationship with and they've always come through for you as far as performance wise you can count on them in a sense yeah and then there's also certain you know things that happen where you can't call the computers amen there's this one off I really need you to push this one up front because of this situation but with a human being you know so that human touch is always going to be you know vital for now yeah but yeah until then I mean because there's so many different things that can happen sometimes on the file you know that that you just need somebody hands on more they can kind of understand and that's just a computer so yeah I feel alluded longer

12:36a ways away I mean it's been 11 years so far I'm looking forward to maybe another 10 11 years there you go yeah being your 60s get your 60s you're good yeah and at that point hey AI to go burgers I won't it won't matter I won't matter to me at that point buddy there you go well this is always fun conversation we just we never know what we're going to talk about when we get started but if somebody wanted to reach out get a file started asking questions you know 50 40 10 you know fast 50 all the great loan products of velocity has how do they get that started well before it's too late you could still reach a human being down here at s down at velocity mortis.com you are a human being you're not AI I am a human being yep anyway yeah email down there in the subject line please put the acronym ORAAT which stands for one rental the time it makes it easier for me to find your loan or your email I should say the body of the email brief your description which you're looking for property address is going to be super helpful at least city and state maybe just to make sure I lend there mid-Fightless score and best phone number to reach out and typically 48 to 72 hours

13:39of the touch thank you buddy I appreciate you be right you too but at blinds.com it's not just about window treatments it's about you your style your space your way whether you DIY or want the pros to handle it all you'll have the confidence of knowing it's done right from free expert design help to our 100 percent satisfaction guarantee everything we do is made to fit your life and your windows because at blinds.com the only thing we treat better than windows is you visit blinds.com now for up to 45 percent off-site wide plus a professional measure at no cost rules and restrictions apply