ChatGPT in the mortgage industry

Dustan Woodhouse may have been a C+ student in high school in the ’80s, but he knows a lot about writing. He has written four books on the mortgage business in a decade, has more than 400 podcast episodes online, and maintains a lively LinkedIn presence. ChatGPT still blows it away. While the Vancouver-based broker says it can outsmart a less experienced writer, a generative AI tool now allows such writers to hold their own. “ChatGPT is a game changer,” says Woodhouse. “It’s just absolutely equal opportunity.” Artificial intelligence is infiltrating every imaginable industry, from oil and gas to financial technology, and the mortgage industry is no exception. While most publicly available AI systems like ChatGPT or Bard can’t contact a customer, reassure an anxious customer or sign a deal, some Canadian brokers are toying with AI as a way to cut back on a variety of tasks. Some brokers say they save time crafting emails, content plans, and product research to focus on customers. But the industry in general is relatively slow when it comes to AI. Woodhouse estimates that 5% of brokers surveyed say they use it, largely due to a strong mix of overwork, stressful market conditions, and some very real concerns about AI ethics and reliability. Always Be ChatGPT-ing Nolan Smith, owner of Oceanvale Mortgage & Finance, is the one who hasn’t had his head in the sand on AI. He says he was messing around with ChatGPT before it really blew up. A friend of his who works in real estate introduced his manager to the generative AI tool, and Smith began using it to help write blog posts and boost search engine optimization. With the help of Chris Johnston, an online marketing coach for Canadian mortgage brokers, Smith brings in ChatGPT to help him discover the best keywords to include in blog posts on his website. But it also serves as a general mortgage marketing research tool. “If I don’t understand a program, a method for driving lead conversion, or landing pages, I’ll just ask ChatGPT for it,” he says. Unlike Google, which actually allows you to pull up the answers to these questions, ChatGPT sifts through every possible result and compiles it all into AI-written precision—a perfect tool for a busy medium. As Woodhouse points out, a lot of what a broker like himself does on a daily basis is fix misunderstandings or misunderstandings between brokers and other clients. “Arguably, mortgage brokerage is about communicating complex financial terms, topics, and policies in simpler language,” he explains. Agents and brokers speak their own dialects, and Woodhouse and ChatGPT jokes can act as a useful translator. He’s also used it to help him put together two scripts for his podcast (all previously revealed). “The first place for AI in the mortgage brokerage world is, as I see it now, through written communications, whether that’s a blog post or text of video content,” says Woodhouse. But he has other uses for it, too. ChatGPT Woodhouse, which describes itself as “somewhat verbose,” helps debug long-running emails for complex questions from customers. And ChatGPT can do more than sort out long emails these days. Johnston says brokers can save about an hour a day by letting AI generate email responses for customers — and even adopt different tones for different situations. “At this point, you have a 100% unique connection with each person you communicate with, even though it is done by AI,” he says. Learn to Code While much of the spotlight around AI in the mortgage industry focuses on scripts, blogs, or emails, AI is also a powerful research tool. It can help brokers research all the details a customer might need to make a more informed decision about mortgage products. Jeff Willis, Newton’s president and CEO, says regulators such as the Ontario Financial Services Regulatory Authority (FSRA) are keen to get brokers more involved in the process. Mortgage research powered by AI, he says, “has the potential to accelerate the ability to deliver this content.” While programs such as ChatGPT contain knowledge gaps for events after 2021, consumers can use them to research general mortgage-related terms and regulations, rather than eavesdrop on their broker. And the involvement of AI in mortgage research doesn’t stop there. In two cases, special AI software was used to facilitate mortgage transactions. US fintech company Celligence announced in May that it had completed an end-to-end homebuying process driven by an artificial intelligence system known as MORGAN. According to a statement from Pavan Agarwal, CEO of Celligence, MORGAN secured conditional approval for an unnamed buyer in just 30 minutes, sent him daily property listings according to his criteria, and set an offer price. He also sent proof of funds to his listing agent, created offers and counter offers, and worked hand in hand with the real estate agent to close the deal. Smith happened to know the founder of Celligence. Referring to the May deal, Johnston says, “When I found out about it, I knew AI was going to change our industry.” While some brokers don’t believe AI can wipe out their profession, the idea of ​​companies using AI to get ahead in the mortgage business isn’t entirely farfetched. Too busy to care Trust is one of the biggest hurdles to AI adoption right now. Artificial intelligence is not perfect. It creates legal issues that don’t exist, violates its own ethical standards against giving advice to the gun industry, and may even be committing rampant copyright infringement. Confidence is everything in the mortgage business. Convincing a frustrated and nervous customer to sign a mortgage—possibly the most risky financial transaction of their life—takes a lot of it. Woodhouse suspects that the relatively low adoption rate (or simply the rate at which moderators say they use AI) may be due to a general mistrust of AI-generated content. But despite pro-AI brokers, like Smith, who insist that brokers will fall behind quickly if they aren’t aware of tools like ChatGPT, there may be another reason the industry is so slow to adopt AI — it’s just too busy. Between Canada’s record high home prices, lack of interest rate cuts in the near future, and mortgage stress testing, Woodhouse says it’s probably the hardest time in history to be a mortgage broker. Unless someone shows brokers an AI tool that helps them find more highly qualified clients who are able to pass today’s stringent financing requirements, AI won’t get their attention, Woodhouse says. “The majority of brokers in our industry right now are in survival mode,” he says. And AI cannot push a customer who has not reached the level of stress testing to the limit. It cannot magically lower home prices, interest rates, or down payments. But they may serve as a way for brokers to find clients who can put themselves above the line and lock in the commission. As Woodhouse said, “I don’t think anyone has completely solved this mystery yet.” Watch Part Two where we’ll dive deeper into the applications of AI in the mortgage world.

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