How AI is moving loan officers forward

The lending and banking industry over the last several decades has experienced an unprecedented change.

Lending is such a vast industry, and it impacts directly and indirectly almost every part of the economy. The days when people used to complete their transactions in person at a bank or maintaining all personal finance records as paper documents are far much behind us. Today, we see an upward trajectory of electronic document management systems. Third-party credit reporting and rating systems rise each day, allowing banks to quickly process the loan applications and other consumer inquiries without the need of much human effort and interaction.

Tens of millions of Americans hold loans that are worth trillions of dollars, as such, any technological move that can make even a small improvement in the company’s returns on the investments they hold, or that can improve their share of the market, would be worth a lot. While it is true that the banking industry has grown so much over the years, there are still leaps and bounds of improvements that need to be adopted and maintained across the board. New technologies today are looking at the ways through which to reduce the human effort required in the analysis of different algorithms to establish a pattern in the consumer behaviors and also to extract data from documents to answer questions that are required to complete a range of banking transactions.

Rather than focusing on form completion and transferring data, the mortgage underwriters will be available to spend more time examining the loan applications and credit assessment at a higher level. To achieve this, it would mean that decisions to extend credit will involve fewer risks and will be made available to more worthy borrowers.

This is why both the established banks in America and throughout the world and startups in the lending industry feel the need to look for new ways to innovate constantly. To fill that gap is artificial intelligence. According to the AI, Opportunity Landscape research by Emerj shows that approximately 15% of the venture funding raised for the AI vendors in the banking industry is for lending solutions. At its most basic, the lending industry is a big data problem. This means, to fill the gaps therein in the industry, it has to adopt big data and machine learning. To process the value of the loan, the creditworthiness of a person is vital. The more data you have about a person, the better chances you have to assess their creditworthiness. Also, machine learning and AI allows mortgage underwriters to focus more on examining the loan applications and credit assessment at a higher level. Ultimately, this means that the decisions to extend credit will be less risky and available to more worthy borrowers.

The high producing loan officers understand this simple logic that AI is the next phase in lending. It is an opportunity that offers multiple potential benefits for the industry. However, that potential is yet to materialize fully. According to National Mortgage News’ 2020 Top Producers, which answered how Artificial Intelligence affects the way they do or have been doing business right now. In last years’ survey, AI stood among the most listed responses on the initiatives bound to make waves. With the COVID-19 crisis expected to worsen into the spring, the urgency may intensify around mortgage companies’ intent to become digitalized, automated, and more informed on the opportunity AI represents. AI represents a risk for most jobs, but most advocates argue that tech is the most likely and should be used as an adjunct to workers. The longer it is used in the industry, the more systems learn, the higher the chances of the technology absorbing more mundane tasks, circumventing human error, yielding a faster and easier lending process over time.

While AI adoption and utilization in the lending industry sits in the nascent stage of use, sentiments towards the technology split into two, according to the Survey by National Mortgage News. About 59% of the loan officers in both the Midwest and South said they don’t use AI technology, and they don’t believe

“I have not been impacted very much by the AI movement. My referrals and customers do business with me because of the service I provide them,” said Joel Van Asch, loan originator at Homebridge in Lawrenceville, Ga. “At the end of the day, this is the biggest purchase a person is going to make. I strongly believe that due to this being such a big decision in someone’s life that they want to deal with a live person and have the assurance that the loan officer is going to get the deal closed. This is the way I operate my business.”

The banks have created a system where people have been forced to rely only on credit scores to determine the applicant’s creditworthiness. For instance, you will find that applicants will be denied loans by financial institutions simply because they do not have a lengthy credit history. However, a number of these applicants are less likely to default on their loans given the alternative which means, sectors of the economy such as real estate, automotive, sales, and constructions are likewise unable to capitalize on new businesses. Even with perfect information, it might be challenging to determine the likelihood of a person defaulting on a loan. Individuals and companies will sometimes lie which presents an excellent time for AI to step in and do a risk assessment. Awhile back, companies used to look at the credit scores to determine the creditworthiness of an applicant, today, companies are looking at an individual’s entire life and even their vast digital footprint in the determination of their likelihood to default on loan. This is what is referred to as “Alternative Data.” The logic behind it is that extra data provides not just more insights into people with established credit scores.

Holding as many human touch points as possible is relevant and understandable. Some of the loan originators even reach out to people using their phones to keep in touch with their clients. Some believe that software can’t replace their skills, and the prospective borrowers do not fit into the computer approved

boxes for decision making. This is where most go wrong. The algorithms used in machine learning are used to help in the assessment of the nonnumerical factors in the applicant’s creditworthiness evaluation, for instance, consumer behavior and other industries and social media activity. AI offers an excellent opportunity to learn more insights into an applicant’s willingness to pay their debt. This results in the extension of credit to deserving applicants who might otherwise have been denied a loan.

“We are in the people business. In this business, AI may supplement operations by streamlining processes to improve efficiency. Still, it will never replace the human element of the mortgage process,” said Tammy Saul, owner and loan originator at Federal Hill Mortgage in Baltimore. “As a retired attorney, my approach to every client and mortgage consultation is unique and customized. AI, automation, technology, or the like cannot replace that.”

According to the Survey by NMN, the majority of the LOs in the Northeast and West showed a more progressive AI stance. They see technology as a benefit to their businesses. Which translates and embodies the mantra “work smarter, not harder.” If AI is used correctly in the system, it can start a chain reaction of benefits, enhancing the interactions chances with their clients.

The integration of AI into the loan origination process helps in the reduction of human errors in the processing of a loan application or even overlooking critical factors in the assessment of whether a borrower will default a loan or not. AI plays a central role in the lenders’ loan management system, helping in the determination and identification of the patterns of behavior that will indicate a consumer may be close to default. Having such a system that can be able to track and reduce those risks will stem costly losses hence preserving credit availability for the worthy borrowers.

“I believe that technology is extremely important to the efficiency of the loan process. By being more efficient, a lender can save time and drive down the cost to produce a loan, therefore being able to offer a good pay to employees and low rates/costs to customers,” said Michelle Bruto da Costa, loan originator and branch manager at Homebridge in Everett, Wash.

https://www.nationalmortgagenews. com/news/how-ai-pushes-loanofficers-forward https://emerj.com/ai-sectoroverviews/artificial-intelligenceapplications-lending-loanmanagement/ https://www.bobsguide.com/guide/ news/2019/Aug/23/how-artificialintelligence-is-disrupting-the-lendingindustry/ l 35

Globally, one of the most common questions that people are asking is; how will the coronavirus affect the property market? On March 11, the World Health Organization officially designated the COVID-19 as a pandemic, about 114 countries have been hit by the virus, which has resulted in over 120, 000 infected people and more than 100,000 deaths. Furthermore, while the statistics and the way that the virus is affecting people’s lives are rapidly changing by the day, simply examining the way the outbreak is impacting the real estate industry in the united states will show you some varied outcomes. More markets have been left more vulnerable than others.

Dow Jones Industrial Average suffered the most substantial single-day dip in history on February 27, 2020.

Despite what the situation looks like, there is no direct connection between the stock market performance and the real estate value. The connection only exists between them as both industries are affected by economic performance. For as long as consumers feel confident about their job security, they will continue to spend, and that

Ever since the virus was declared a pandemic, major stock indices around the world have dropped an average of more than 9percent. The

includes the real estate investment. Among an array of other things, the real estate market is affected by the treasury bond prices, which in turn correlates with the mortgage rates. What happens is that, when investors see much volatility with the stock market, they move their cash investments into more stable assets such as bonds. As the demand for the treasury bonds increases, the bond prices go up, and their yields fall, which pulls the mortgage rates down.

With that simple understanding, it is safe to say that investment in the real estate market is quite safe. Also, note that the catalyst for today’s economic situation is very different from what was happening in the 2008 financial crisis. Remember, the last crisis was being fueled by the sub-prime lending market, which is very different from today’s crisis. In the financial crisis, sub-prime mortgages were bundled up and sold at a relatively higher price than they were worth. Ultimately, the real estate speculators let the home financed by these loans go into default, and these bundles of mortgages lost their value, which bankrupted large investors, starting a domino effect that could be felt in all aspects of the economy.

The volatility in the stock market today is not a result of the real estate market doing. It is as a result of uncertainty caused by the corona pandemic. Right now, it is unclear what all this means, especially for the real estate industry, and while it remains to be seen, the real estate industry is somewhat insulated mainly because of the tight residential inventory, higher buyer demand, low mortgage rates and lower prices for lumber and oil. Nonetheless, investors in the real estate market might be worried seeing that big companies like Zillow have temporarily suspended buying homes through its Zillow Offers arm in a bid to comply with the public health orders intended to prevent the spread of the virus. While that is so, it may also be coming from the and purchased 1,787 more. The year closed with an inventory of 2,707 homes across the nation. Therefore, this means if you get a chance to, this might be the ideal time for investors to get a piece of the real estate market finally.

It is safe to invest in the real estate, and if there is a place you should be turning your eyes towards is Corona, CA. with a strong population and so much to do, undoubtedly, the Corona market is the place to put all your bets on. There are a lot of comfortable properties, which means that it all up to you to provide your buyers and renters with available properties.

When looking to invest in a particular area, not just in Corona, CA, you should look for experts to work with. People with actual connections when it comes to commercial real estate for investment and what a better place to stop by than The Power Is Now Media. With agents scattered all across the country, you can be sure to be connected with the right agent every time. Speaking of agents, in Corona, speak to Kamesha Keesee, one of the most talented VIP agents we have in Corona County. If you want to find out more about property values in Corona County, CA, this is the person to speak to.

Find out more about Kamesha Keesee at https:// thepowerisnow.com/vipagentsservices/kameshakeesee/. Additionally, learn more about the Power Is Now Media VIP Agents program here; https:// thepowerisnow.com/real-estate-professionaladvertising-program/. Also, find out the agents near you for professional guidance at https:// thepowerisnow.com/vipagentsservices/

desire to preserve cash, which by the way the company has admitted to.

Zillow Offers has been buying homes directly from sellers in over 20 US markets, including from the Bay Area, Inland Empire, Orange County, and San Diego. During the last quarter of 2019, Zillow Offers had sold about 1,902 homes all across the nation

https://www.biggerpockets.com/blog/ impact-coronavirus-real-estate-markets https://theconversation.com/how-will-coronavirus-affectproperty-prices-133761