From policy to practice: AI in the mortgage industry

"AI isn't the biggest risk to mortgage lending right now. Policy misunderstanding is. While lenders across the country are moving quickly to implement artificial intelligence responsibly, state legislators are moving just as quickly to regulate it. And when policy moves faster than the policymakers' understanding, unintended consequences follow. As former Cisco CEO John Chambers recently observed, AI is moving at five times the speed and will produce three times the outcomes of the internet age."

"Artificial intelligence is rapidly reshaping how lenders detect fraud, ensure compliance, improve accuracy and deliver faster decisions to borrowers. But while technology is moving quickly, policy is racing to keep up and not always in ways that support consumers or lenders. AI is already embedded in modern mortgage lending For mortgage professionals, artificial intelligence isn't theoretical or futuristic. It's already embedded across the lending lifecycle."

"These tools help lenders operate safely, consistently, and at scale while meeting increasingly complex regulatory expectations. They also support the very outcomes policymakers want to protect: More accurate credit decisions Stronger fair lending oversight Faster approvals Reduced operational errors Fraud prevention Removal of human bias Better consumer experiences When deployed responsibly, AI enhances compliance rather than undermines it. It allows lenders to monitor outcomes more closely, identify risk earlier and deliver greater transparency across the process."

Policy misunderstanding is creating greater near-term risk for mortgage lending than AI technology itself, as lawmakers move quickly to regulate without full understanding. AI is already integrated across the lending lifecycle, powering underwriting, fraud detection, servicing analytics and customer engagement. These systems help lenders operate safely, consistently and at scale while improving credit decision accuracy, fair lending oversight, approval speed, error reduction, fraud prevention and consumer experience. Responsible deployment of AI can enhance compliance by enabling closer monitoring, earlier risk identification and greater process transparency. Rapid policy action risks unintended consequences that may harm both consumers and lenders.

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