A New Era: How AI is Transforming the Mortgage Lending and Real Estate Sectors
Artificial intelligence has been around for decades, but the recent launch of ChatGPT by OpenAI, a San Francisco-based AI research and deployment company, hit the news media like a tsunami. Now, the whole world is trying to figure out how to use it and, more important, how to tame it.
Businesses are dedicating a significant amount of money and resources to determine how AI can save them time and operating costs. We decided to take a close look at the impact AI is having on the mortgage and real estate industries in the U.S. — and what will the future look like?
The Mortgage Application
The digitization of the mortgage application has taken much of the pain out of applying for a mortgage, but AI algorithms have further streamlined the data collection and verification process resulting in faster approvals and a better customer experience.
Automating the Underwriting Process
The mortgage underwriting process is complex. Underwriters are tasked with collecting, organizing, and assessing a plethora of information, much of which is manual, time-consuming, and subject to human error. AI automation has eliminated a good portion of data entry and processing while making sure all the compliance boxes are checked.
AI algorithms can quickly examine vast amounts of borrower data — like credit reports and financial records — enabling underwriters to make more informed lending decisions in a shorter amount of time.
In an interview with Jane Hood, head of marketing at FoxyAI, a leading B2B proptech enterprise, we discussed how AI technology is helping businesses process data in seconds rather than days, while also increasing accuracy and operating efficiency.
FoxyAI serves many business markets, but this conversation focused on the lending and real estate communities. With FoxyAI’s Condition Score model, mortgage underwriters and property inspectors can assess and score a property’s condition by quickly analyzing photos that can easily be uploaded via API.
To take photo analysis one step further, FoxyAI’s models can make an impartial and detailed assessment of a property’s condition, location and design, removing potential bias and discriminatory redlining practices that can emerge from human inspection reports. AI’s ability to analyze property photos and media at a granular level can quickly spot trends in loan approvals versus denials for a specified geographical region or other property characteristics.
Valuations
FoxyAI also helps appraisal companies improve their appraisal process by automating time-consuming administrative tasks like matching photos with inspection criteria in an instant. Searching comparables in specific neighborhoods with similar characteristics no longer takes hours to complete. Photos can be tagged and labeled by room type, specific building materials and design finishes. Then this data can be integrated into proprietary databases for future analytics and research.
Real Estate Investors
FoxyAI’s models are helping investors quickly sort listed properties to identify those that meet specific investment thresholds and requirements. Enhanced AVMs can include cost estimates for repair and renovation projects, offering investors an extra level of confidence in their decision-making.
The Future for Real Estate Agents
FoxyAI just released FoxyAI-GPT — an AI-enhanced research tool that goes well beyond information available in the Multiple Listing Service database. Detailed analysis of interior and exterior photos can provide information not available in the MLS. Looking for a single-family home with mid-century cabinetry and a Koi Pond in the back? This model can search for the exact features being sought by buyers.
Jane commented, “Our unveiling of FoxyAI-GPT marks a pivotal moment for real estate professionals. With its advanced AI capabilities, we’re ushering in an era where property searches transcend the limitations of conventional databases. Now, real estate professionals can tap into a treasure trove of insights, enabling them to cater to the most nuanced preferences of their clients. It’s not just about listings; it’s about finding the perfect match for investors of all kinds. The power of AI is opening new doors in real estate, and it’s an exciting journey to be part of. And let’s remember, this is just the beginning of generative AI’s profound impact on the real estate industry.”
So, it’s safe to say Artificial Intelligence is making a significant impact on the mortgage lending and real estate industries. Tasks that once took hours or days to complete are now being accomplished within seconds, and accuracy is a welcomed byproduct of this non-human technology. It seems everything AI touches is faster, better, cheaper, and more detailed. Now, it’s up to business owners and decision makers to get on board and take advantage of this new tech frontier.