Are You Being Declined by AI

Watch Out For AI and Automation

Mortgage lenders rely on AI and preset automations to weed out mortgage applications from their queues, which allows them to allocate resources to the applicants most likely to be approved. Carefully written programs and systems are intentionally designed to return a decline if "one box/criteria" can't be checked. In contrast, in a manual evaluation/underwriting process, an otherwise auto-declined application may be approved with some effort. 

The problem many lenders face today is that they don't have enough experienced staff to handle the number of applications they receive. Anyone working in the lending industry today knows that it takes more time and resources (than ever before) to get a mortgage application approved, for a multitude of reasons. Therefore, the applicants whose applications require a more in-depth review and ultimately a greater investment of time and effort are often just eliminated.

A company that operates based on a "high volume model" accepts that a certain percentage of applications will be denied. Based on that, they devise and implement marketing strategies to ensure a steady flow of leads or financing applications, so they can "hit their numbers". Banks use interest rates and cashback promotions as levers to attract new business and keep their funnel full. Most A Tier lenders do not have an operating model that invests extra time in an application to determine whether it can actually be made to fit their policies and lending guidelines.

Our Brokerage

Every year, we approve a significant number of people for mortgage financing who were declined elsewhere. We have never worked on a high-volume business model. Instead, we prefer to invest more time and resources into each client so we can say yes more often—a model based more on service, retention, and repeat business.

When we see a lower credit score, a significant accumulation of debt, and/or a less stable employment history, our approach is to get the story and determine why we are seeing what we see. Once we understand the big picture, we can package and present the client's information to the appropriate lender in the most effective way, with a view towards mitigating any potential concerns.

Technology has a time and place, like everything else. Mortgage financing is (as they say) the most significant financial transaction most of us are likely to undertake, which underscores the importance to us of giving everyone our best effort. Our approach, therefore, is to leverage a combination of knowledge, experience, lender access, and products to help as many people as possible.