The continuous evolution of advanced algorithms, often referred to as “artificial intelligence” (AI), is a topic of significant disruption within the technology sector. Giant multinational tech corporations like Google and Microsoft are actively exploring ways to integrate AI into their operations. Following the release of OpenAI’s conversational AI, ChatGPT, various companies are now striving to enter the AI arena either as independent entities or to enhance their existing processes.
The reverse mortgage industry, known for its cautious approach to adopting emerging technologies, is now showing signs of interest in AI integration. Bill Packer, the COO of Longbridge Financial, is set to present at an event sponsored by the Mortgage Bankers Association (MBA) on the potential applications of AI within the reverse mortgage sector.
To gain deeper insights into this development, Reverse Mortgage Tribune (RMT) engaged in a conversation with Bill Packer this week.
Exploring AI Tools in Reverse Mortgage Processes: Packer boasts a three-decade-long career in the mortgage industry, primarily focused on the forward side. His expertise led to a four-year tenure as the chairman of the MBA’s residential mortgage technology group, providing valuable contacts and setting the stage for his upcoming presentation at the MBA’s AI-focused conference.
During the event, Packer will unveil and demonstrate some of the initiatives Longbridge Financial has undertaken to incorporate AI into its operational practices.
“Longbridge has been actively pursuing various initiatives in the AI space, primarily centered around generative AI, a topic gaining substantial attention,” explained Packer. “We’ve been progressing with several generative AI projects, and I’ll be showcasing at least two of them.”
One of these initiatives involves the utilization of generative AI to provide partners and consumers with answers regarding reverse mortgage guidelines. It’s worth noting that this tool extends its benefits not only to Longbridge’s proprietary reverse mortgage loans under the “Platinum” brand but also to partners and borrowers of Home Equity Conversion Mortgage (HECM) loans.
Packer elaborated, “We’re enthusiastic about forthcoming announcements, which Adrian Prieto and the team will likely unveil, probably around the NRMLA timeframe, regarding the developments in this area. We believe these tools will greatly assist our wholesale partners in comprehending the product as they interact with this chatbot. So, I’ll be offering demonstrations of these generative AI technologies.”
The second tool in Packer’s arsenal involves AI-based optical character recognition (OCR) technology, designed to streamline the reading and interpretation of mortgage applications. These applications can often comprise a staggering 1,200 pages or more. OCR technology, by recognizing and extracting text from images of text characters, can significantly enhance the efficiency of the process.
Using AI-based OCR, Packer noted that the tool can “navigate through the extensive volume of documents, approximately 1,200 pages, or more, in a typical reverse mortgage application. It extracts key data points to streamline our processes.”
Packer will be showcasing developmental versions of these tools at the event, followed by participation in a wrap-up panel discussion.
Development and Tool Selection: At this stage, as these tools are still in the developmental phase, Longbridge Financial remains agnostic about the specific existing generative AI tool that will form the basis of the final products.
Packer explained, “We haven’t made a definitive decision regarding which ecosystem we intend to utilize.”
Privacy remains a paramount concern for the company as it progresses with these AI developments. Packer emphasized the need for robust privacy safeguards to protect customer information.
“The utmost priority for us is that, wherever we take this technology, it remains private. We cannot afford to have our customers’ information exposed to the public domain,” Packer stated. “Both of the components I’ll be demonstrating operate within environments we have direct control over, as they are within our tenancy, or we’ve collaborated with a third party to ensure segregation from other environments.”
The critical question of whether the company will undertake the entirety of this development internally or engage in partnerships remains under consideration, as decision-makers evaluate the best approach.
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