Brokers must use caution when relying on AI for mortgage answers
Anybody who uses AI-based chatbots daily will tell you how helpful they can be, and how much time they can save you in your workflow.
They will also tell you they can be a bit unreliable. Because they are canvassing the web for answers, sometimes they simply pull the wrong answers from the internet.
Other times, the model might not have access to the latest answers, so if something has changed in the last year, it might argue with you about what is actually correct. In short, it may be stuck in 2025.
While there are countless low-importance searches every day where getting the wrong answer might not have major implications, finding accurate answers to brokers’ questions about mortgage regulations is a different story. Getting a wrong answer there could be disastrous for the borrowers, and regulators aren’t going to take ‘the AI said so’ as an excuse.
One mortgage executive said brokers must get the right answers from experts, rather than AI chatbots.
Valerie Saunders (pictured top), chief executive strategist with the National Association of Mortgage Brokers (NAMB), said brokers have to be careful with the answers they get from AI.
“I think now more than ever, because we do have AI, I think people have a tendency to just use AI as a mechanism to answer their questions,” Saunders told Mortgage Professional America. “But AI is pulling from the vast interweb, and not everything on the internet is true.”
Answers from the source
While AI can be helpful in getting answers quickly, the accuracy of the answer depends on the accuracy of the source and whether AI pulls the right source. In addition, because it’s pulling from the web, it could just grab inaccurate information that it thinks is correct.
“I kind of compare it to Wikipedia,” Saunders said. “When you go to search something, Wikipedia usually comes up first, especially if you're searching a person. But I don't know if people are aware that anybody can go in and modify and edit Wikipedia. All that stuff may not even be true. A lot of it may be true, but it may not be 100% factual. So why not go straight to the resource? It’s better to be informed correctly the first time than to find out your mistake later.”
Saunders said making sure brokers are getting the right answers is a critical mission for trade organizations like NAMB.
“Our information is validated,” she said. “You're hearing it directly from the GSEs, or you're getting information directly from people who may have worked at VA or worked at FHA or have been part of the reverse mortgage industry for a long time. You're getting the vast experience and knowledge that all of these organizations have cultivated.”
A PhD in mortgage
The mortgage industry is unique because each brokerage is its own business, while brokers are also their own small businesses, even if they work for a larger company. Saunders said that’s why trade organizations are so important to find a way to tie all of these smaller businesses together into a larger entity.
“When you're getting involved in a business like ours, it’s really made up of a bunch of little small businesses,” Saunders said. “Even if you're a mortgage broker that works for a large mortgage company, you're probably working from home. The only people that you're connecting with are either people through Zoom, or maybe you're going to local association events or networking events.
“They provide you with a resource and a lifeline to have somebody to help you, because most small businesses don't necessarily have the resources available to provide really in-depth education.”
Saunders said that while companies will give brokers the surface-level education that they need to get started, trade organizations like NAMB can provide that additional knowledge base. This can help brokers not just survive, but thrive.
“They're going to tell you the proper way to originate or process a loan,” she said. “They're going to familiarize you with their internal systems. But a lot of it is expected to be hands-on education. Look towards an association. We're very dedicated to education and to making sure that people have resources that will help them be better in their profession.
“We, as an industry, worked hard to earn the name mortgage professional. Getting your licenses is like getting your high school diploma. The educational offerings from trade associations are like your college diploma, getting your master's degree, or getting your PhD. It’s going to help you become a better originator for your client, because at the end of the day, it's what's best for consumers.”
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