WASHINGTON—How might mortgage lenders leverage AI? A new report from Fannie Mae shares some insights.
“As part of a recent Fannie Mae Mortgage Lender Sentiment Survey (MLSS) special topic analysis, our economists once again asked mortgage lenders about their institutions’ views on artificial intelligence (AI) and machine learning (ML), including adoption interests and barriers,” Fannie Mae explained.
Overall, Fannie Made said the survey results showed a clear shift in AI priorities and paint a more grounded picture of how AI might be leveraged among mortgage origination firms in the near and intermediate term.
The Findings
Among the findings:
- “Surprisingly, mortgage lenders’ familiarity with AI/ML in 2023 (65%) was largely consistent with 2018 (63%), with significantly fewer lenders indicating in 2023 (7%) that they’ve deployed the technology than in 2018 (14%). Notably, a significantly greater share in 2023 (22%) did indicate that they’ve started deploying AI/ML on a limited or trial basis compared to 2018 (13%),” Fannie Mae said.
- Among lenders who have not used AI/ML technology, the biggest barriers to adoption in 2023 remained the same. These include integration complexity with current infrastructure, lack of proven record of success, and high costs. Mortgage banks were more likely than depository institutions to cite integration complexity as a serious challenge. Data security and privacy concerns have also grown significantly since 2018, Fannie Mae said.
- “This year, lenders overwhelmingly cited improving operational efficiency as the primary motivation behind adopting AI/ML (73% in 2023 vs. 42% in 2018). The use case of enhancing the consumer/borrower experience faded significantly as a top reason (7% in 2023 vs. 41% in 2018),” Fannie Mae said.
- When asked to recommend AI application ideas for the GSEs to develop for the mortgage industry, lenders pointed to appraisal automation, borrower income/employment verification, data/documentation reconciliation and standardization, and compliance management, Fannie Mae said.
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