Harnessing artificial intelligence and machine learning to automate the process of originating mortgages requires massive computing power and storage. So cloud providers like Amazon Web Services, Google Cloud and Microsoft Azure are becoming bigger players in mortgage, and financial services in general — a trend accelerated by the pandemic.

Contracting with a cloud provider instead of owning your own hardware gives companies more flexibility to scale. But cloud providers have also developed proprietary AI and machine learning capabilities that can be customized to meet the needs of particular industries and businesses.

Black Knight and Amazon Web Services team up

The latest example of the growing role played by cloud service providers is Black Knight’s new AI-powered mortgage solution, Underwriter Assist, which runs on Amazon Web Services (AWS).

Underwriter Assist uses Amazon Textract and mortgage-specific algorithms developed by Black Knight to extract data from reams of documents like W2s and pay stubs — eliminating many of the tedious “stare and compare” tasks traditionally performed by human underwriters.

Integration with AIVA, Black Knight’s artificial intelligence solution, means Underwriter Assist can also analyze that data, applying lender-defined underwriting criteria to determine the borrower’s ability to repay, for example, and verifying that all the documents needed to support each decision have been provided.

Richard Gagliano

As the name suggests, Underwriter Assist isn’t meant to replace human underwriters, but save them from having to perform line-by-line comparisons of tax returns and bank statements, track down missing documents and signatures, and sort through disorganized data, said Rich Gagliano, president, Black Knight Origination Technologies, in a blog post.

Human underwriters — who are some of the highest-paid employees at lending firms — are still needed to make the final decision on whether to approve a loan, Gagliano said. They can review results, adjust the analyses Underwriter Assist compiles, and request additional documents and information if needed.

But Underwriter Assist boosts production by giving human employees “a much-needed break from time-draining, manual steps in the process, freeing them up to focus on the most critical parts of their jobs: complex analyses and decisioning,” Gagliano said.

Black Knight has been collaborating with AWS since 2018, and several other mortgage offerings run in the cloud, including Loan Officer Digital, Expedite Close, and the company’s correspondent lender platform, Seller Digital, which launched in January.

Frank Fallon

“AWS’s extensive portfolio of cloud services help leading fintech providers like Black Knight to rapidly innovate new services to improve customer experiences,” said Frank Fallon, vice president of Financial Services at AWS, in a statement. “Black Knight is transforming the day-to-day for lenders using advanced machine learning services like Amazon Textract to increase productivity, drive operational efficiency, and reduce costs.”

Google Cloud’s mortgage solution

This spring, Google Cloud launched its own purpose-built solution for the mortgage industry, Lending DocAI. By automating data entry and creating and customizing document processing workflows, the company claims lenders can cut processing costs by up to 60 percent.

Lending DocAI customers include Roostify, a provider of digital mortgage solutions to lenders, and Mr. Cooper, one of the nation’s biggest mortgage loan servicers.

Another popular cloud services provider is Microsoft Azure. Finastra, a global provider of financial services software and cloud solutions, is working with Azure to offer the option of cloud deployment for all of its major products. Its cloud-hosted solutions currently include Fusion MortgagebotLOS.

A better experience for homebuyers

Vendors who are helping lenders automate the process of originating mortgages say the benefits go beyond saving time and money. Automating tasks like gathering and reviewing documents also creates a better experience for homebuyers and the real estate agents who represent them.

As the refinancing boom fades and competition for homebuyers heats up, that’s an important consideration for lenders. A recent poll by Fannie Mae found that improving the loan origination process is a top priority for lenders, followed by hiring more loan officers, and partnering with builders and real estate agents.

Source: Fannie Mae Mortgage Lender Sentiment Survey.

And it’s not just mortgage lenders who are harnessing the power of the cloud. In the title insurance business, Doma is using cloud-based automation that uses a predictive algorithm to provide “instant underwriting” of title insurance for mortgage refinancing, and streamlined remote and digital closing and escrow services for all types of mortgages.

A multicloud strategy

The pandemic accelerated the move to automate company processes, and migrate applications and data to the cloud. That’s according to a survey by MIT Technology Review and VMware, which helps companies use multiple cloud providers.

The survey found financial services firms are leading the charge, with more than half of companies in the category planning to accelerate infrastructure efficiency initiatives such as automation and adoption of a “multicloud” strategy.

ZDNet Editor Larry Dignan writes that a multicloud approach — which enables applications to be hosted by any of the major cloud providers — helps protects companies against “vendor lock-in.” But while enterprises “are deploying more multicloud arrangements, the IT budgets are increasingly going to cloud giants” like Microsoft Azure and AWS, Dignan notes.

Email Matt Carter

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