A few Points on what I’m working on and thinking about today…
HISTORY OF LENDER AI
– But seriously, how close are we to a fully digital mortgage?
– This is the title of a presentation to about 800 people I’m doing with Fannie Mae and Blend tomorrow.
– The first automated mortgage approval software launched 26 years ago.
– But it was all paper income and asset docs being keyed in.
– And we know AI is only as good as the data going in.
– Then deregulation made the data going in even worse because there was no data going in!
– No income, no asset (aka NINAs) and stated income, stated asset (aka SISAs) were all the rage.
– There used to be raging debates about how a SISA was better than a NINA
– Because at least a SISA had income figures entered into the loan approval AI machines whereas a NINA had no income or asset figures even entered.
– This actually happened.
– Then so did the crisis when all those loans made without income/asset verification turned out to be bad.
– That and the fact that derivative securities created based off the supposed strength of those loans permeated the global financial system.
– Then came “Ability To Repay” re-regulation that required lenders to use income and asset documentation to approve loans.
– Imagine that!
– Then came this most recent 6 year era where direct connections to your your payroll provider, tax returns, and bank statements ensures data going into loan approval machines is correct.
– It’s almost been 30 years in all.
– And it’ll take a few more years before this is fully mainstream.
– So by the time a mortgage is fully digital, it will have taken the time it takes to pay off a mortgage.
– Your process will be easier (already is) and the the system will be safer because of it.
WHAT’S REVOLUTIONARY IN THE AGE OF HYPE?
– Domesticated Animals by Queens of The Stone Age is in heavy rotation because of this lyric:
– “A revolution is one spin round.”
– Been mulling this since everything is a revolution in this golden age of startup/disruption hype.
– We’re starting a revolution.
– Our software is revolutionary.
– Let’s revolutionize our industry.
– Yet this lyric reminds us what the dictionary says: a revolution is one rotation.
– So it all depends on the scale of your thinking.
– One turn of the earth?
– One time around the sun?
– 26 times around the sun, like the AI journey above?
– Sticking with something for a long time is how you make a revolution.
– Bill Gates famously said people overestimate what they can do in in a year and underestimate what they can do in 10 years.
– So I listen to Queens, ponder Gates, and try to find my place in the golden age.