Joe Camerieri–Mortgage Technology in 2021: The Year of AI

Joe Camerieri is an executive vice president with Mortgage Cadence, Denver. As a mortgage industry leader, Joe has more than 33 years of experience in consumer direct and retail mortgage banking. With extensive knowledge of both operational and business development of the mortgage outsourcing segment, he has executed, managed and grown most of the top private labeled mortgage relationships in the industry today.

In the new year, how do you expect mortgage technology to change?

It seems like the industry has been talking about efficiency forever. How do we serve more borrowers? How do we close loans faster? However, most of the mortgage technology solutions created until this point have focused on borrower-facing experience, like the point of sale. While a savvy POS is helpful to loan officers and is important for a great borrower experience, it has only brought minimal efficiency gains to lenders. As mortgage technology continues to evolve, it needs to look inward, toward manufacturing loan assets to truly streamline the mortgage lending process as we know it.

Right now, processors, underwriters and closers are spending most of their time doing the exact same things they were doing 20 years ago. When they get a file, it’s all about data input, stare and compare and document management.  Its only then do they move on to deciding whether or not the loan is good to go forward, communicate a decision and notify the borrower of more requirements.

Why should lenders shift their focus to manufacturing?

The underlying driver that currently controls interest rates will likely see them increase over the course of next year, but this doesn’t necessarily mean consumers will see higher rates in the near term. With margins so high, lenders can continue to keep rates low and still continue to make profit. However, to keep enjoying these margins, lenders must keep operating costs in check. When these high margins begin to contract, smart lenders will already have made the technology investment to become truly more efficient.

People are the single largest expense in a mortgage operation, with the cost of underwriters seeing an increase of somewhere between 25% and 35% in the past 12 months. Looking at more efficient manufacturing practices can free up a lot of people, which ends up saving time and costs and allows people to do more meaningful work.

In a mostly refinance market, both your borrower and loan officer experience is critical, because you are ultimately winning or losing business based on how easy it is to work with you. It makes sense that the focus is on the POS and other borrower-facing processes. In a purchase market, however, this is not always the case. Business is based more on where real estate agents or bankers want you to go. For purchase markets, it is especially critical to streamline your manufacturing so that you can free staff up to handle more loans and remain profitable. Which is why I believe the answer to more efficient manufacturing lies in AI.

How can AI save on time and costs?

How can AI help streamline manufacturing? Let’s go back to the fact that that processors, underwriters and closers are spending most of their time reviewing loan files, inputting data, validating data and managing documents. Everything outside of decisioning can be automated and that is where the true cost and time savings lie.

With AI capabilities, production personnel no longer need to do the administrative work and basic stare and compare. AI matches up the data and compares for them in order to validate that all of the third-party information provided is correct. This saves an incredible amount of time and gives an individual all the information they need to make a decision about the loan and move on to the next one.

Simply by implementing AI technology tools and a program, lenders can do two or maybe even four times more decisions, because they are no longer spending their time and energy analyzing documents and data.

In the new year, lenders that want to stay competitive and work efficiently will begin to evaluate and implement technology that does the hard work. By streamlining manufacturing, lenders can save more, do more and ensure a more efficient and profitable 2021 and beyond.

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at msorohan@mba.org; or Michael Tucker, editorial manager, at mtucker@mba.org.)