In its latest report, STRATMOR experts discuss artificial intelligence and its future in the mortgage business.

GREENWOOD VILLAGE, Colo., – June 28, 2023 – With artificial intelligence (AI) rocketing into use in many industries this year, many are questioning what AI can and cannot do for the mortgage industry. For answers, STRATMOR Group turned to its expert advisors and asked them to respond to questions about AI and its future in the mortgage industry. For the AI perspective, STRATMOR went to ChatGPT, the poster child for AI, and asked it the same questions. What emerges may be a best-case scenario for how we share the future with these powerful new technologies in the article, “The Rise of AI: STRATMOR Experts and ChatGPT on Artificial Intelligence in the Mortgage Industry,” featured in the June Insights Report. 

“We talk about ‘automation’ and ‘AI’ as the same thing, which it is not,” says STRATMOR Principal Jennifer Fortier. “’Automation’ means taking the human out of routine repetitive tasks and ‘AI’ means simulating human thinking. So, when we talk about AI features, my mind goes to ‘what human-like thinking is it doing?’”

While there are some who may think AI is ready to start underwriting mortgage loans, it’s unlikely any industry compliance officer will authorize the flipping of that switch, or at least not yet, according to STRATMOR.

“We still need a human to do the thinking when the system cannot accommodate situations that are not a clean pass or fail,” says Fortier. “So, today, the most practical use of AI in the mortgage process is figuring out what the data is, which is a considerable benefit for efficiency, accuracy and transaction speed.”

According to Fortier, AI can help in document and data point recognition — finding data and figuring out what it is. “Once data is identified, the system can then run a series of automated comparison checks or rules,” says Fortier. “When the rules fail, there is an exception task routed to a human user.”

And that’s where lenders are already investing in AI-powered technologies. According to data from STRATMOR’s 2022 Technology Insight^® Study, 22 percent of responding lenders are already using AI. This makes sense, according to STRATMOR Senior Partner Garth Graham, who says AI holds great promise for the industry.

“One of the biggest issues in mortgage banking is that the consumer shows up with a bunch of data and nobody believes them. There is no trust in the process,” Graham says. “We spend a ton of time and money trying to convert proof that’s typically provided in the form of images into data we can use, then hand that all off to the next person, who does not trust the data either. Ultimately, the lender packages up the loan to sell to an investor who doesn’t trust any of the data in the file, and the process starts all over again.”

Graham believes that if the industry had AI that could confirm for all parties that the data was correct, that could be changed. “To me, the major opportunity AI offers is removing all the checking, and the checking of checkers that has created an environment where the cost to originate is over $10,000,” he says.

But to get there, the industry will have to overcome some hurdles. ChatGPT lists five areas, including data quality, regulatory compliance and model bias and fairness as issues. STRATMOR’s advisors pointed out additional mortgage-focused concerns.

“The challenges I see for implementing AI in the mortgage industry are twofold,” says STRATMOR Principal Jennifer Smith. “One, having leadership who not only understand what AI can and cannot do, but who have reasonable expectations of the results it will yield, and two, having someone in the lender’s shop who understands the AI being implemented and will monitor and manage it going forward.”

Challenges aside, there is promise in AI to make it easier for lenders to focus on conversion rates as it takes over sifting through the reams of data to determine which borrowers are most likely to close, continues to improve the automated underwriting process and helps all parties in the loan process build trust.

“In light of the state of AI in the mortgage industry today, lenders would do well to make sure they educate themselves to understand AI and its capabilities so they can have informed conversations with vendors who have chosen to implement AI in their technology,” says Principal Kris van Beever. “In that way lenders can make better decisions on when and where to exploit this new technology for their benefit.” 

For more on AI in the mortgage industry, according to STRATMOR experts and ChatGPT, read the June Insights Report.

A second Insights Report article from Customer Experience Director Mike Seminari entitled “Mortgage Originators' Guide to Success in the Age of AI,” envisions an AI-powered loan officer. Seminari says the value the LO of the future will be centered around soft skills like creating rapport and building trust, not gathering borrower information, quoting a rate or even conveying periodic progress updates. In his article, Seminari outlines what originators can do to adapt and reinvent themselves by harnessing, not competing with, AI, and he shares three steps originators can take now to AI-proof their careers. Find the entire article in this month’s Insights Report.

WASHINGTON, D.C. (June 28, 2023) — Mortgage applications increased 3.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 23, 2023. This week’s results include an adjustment for Juneteenth holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 8 percent compared with the previous week. The Refinance Index increased 3 percent from the previous week and was 32 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index decreased 8 percent compared with the previous week and was 21 percent lower than the same week one year ago.

“Mortgage rate changes varied across loan types last week, with the 30-year fixed rate increasing slightly to 6.75 percent. The spread between the jumbo and conforming rates widened to 16 basis points, the third week in a row that the jumbo rate was higher than the conforming rate. To put this into perspective, from May 2022 to May 2023, the jumbo rate averaged around 30 basis points less than the conforming rate,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase applications increased for the third consecutive week to the highest level of activity since early May but remained more than 20 percent lower than year ago levels. New home sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home market. Existing-home sales continued to be held back by a lack of for-sale inventory as many potential sellers are holding on to their lower-rate mortgages.”

The refinance share of mortgage activity increased to 27.2 percent of total applications from 26.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.1 percent of total applications.

The FHA share of total applications decreased to 12.9 percent from 13.3 percent the week prior. The VA share of total applications increased to 12.2 percent from 11.9 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.75 percent from 6.73 percent, with points remaining at 0.64 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) increased to 6.91 percent from 6.80 percent, with points increasing to 0.69 from 0.49 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.63 percent from 6.74 percent, with points increasing to 1.08 from 1.03 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.23 percent from 6.26 percent, with points decreasing to 0.69 from 0.71 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 6.28 percent from 6.09 percent, with points decreasing to 1.02 from 1.40 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. 

If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visit www.mba.org/WeeklyApps, contact This email address is being protected from spambots. You need JavaScript enabled to view it. or click here.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100.

SAN FRANCISCO, Calif., June 13, 2023 – Nomis Solutions (Nomis), the leading provider of end-to-end pricing lifecycle management technology, announced that client success veteran Amy Chase has been tapped as Senior Vice President of Services. Chase will be responsible for leading implementations of Nomis Solutions and delivering ongoing services to existing clients.

“Amy is a recognized leader in software services who understands the needs of customers, employees, and investors. She is a passionate customer advocate, and we’re excited to have her as a member of our leadership team,” said Greg Demas, president of Nomis Solutions.

Chase has nearly 20 years of experience in professional services and client success. Previously, Chase was the vice president of customer success for global software company Blackbaud and software provider Frontline Education. She brings expertise in growing cloud-based software companies and transforming the client experience to ensure clients are achieving their business outcomes. As a proven leader in services, she has overseen the automation of critical processes, business process reengineering, product and service launches, sales and business development and renewal execution.  

“In this stage of Nomis’ growth, there is a tremendous opportunity to leverage our industry expertise to provide consultative guidance to our client base and bring new service offerings and capabilities to market. Client-first strategies are key to doing so effectively,” said Chase. “Throughout my career, I’ve been an internal champion for the customer's voice, and I look forward to continuing that effort at Nomis to ensure our client's needs remain at the forefront of our strategy.”