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The First American Loan Application Defect Index, “which estimates the frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications,” was down 20.6 percent in April from the October 2013 peak. Foreclosure activity in April 2017 dropped to the lowest level since November 2005, according to ATTOM Data Solutions. Democratizing The Marketplace When it comes to competition a lot of the marketplace is simply off-limits to newcomers because few people have the dollars to open a new supermarket chain or steel mill. However with AI the nature of competition is different. The capital barriers to entry are low, in large part because companies of all sizes have access to the same essential tools. “Technology is the ultimate equalizer,” said Kutsishin of Sales Boomerang. “You can do more with less which means you can compete with larger firms on a smaller budget. Technology also gives smaller companies access to affordable resources that previously would have been too expensive. With freemium models being the norm you can take a
technology for a test drive before you have to fully commit and spend money.”
To make instant approvals work, lenders need access to huge amounts of data that can be obtained quickly and accurately. The big trick is having back- end systems in place and the ability to access and evaluate massive quantities of data in nanoseconds. All of these programs rely on big data and with each use they gain more data points and thus become more accurate, meaning the process is both additive and effectively without limit. Less Marketplace Risk? Does AI assure success from every transaction? Not at all. There are always events which can cause a transaction to fail. For instance, with a mortgage application the property may not appraise. The borrower’s bank might deny a lender access to its records and accounts. The borrower might go on a credit-bruising spending spree: a 2013 study by Equifax found that almost one- fifth of all mortgage applicants opened new credit accounts before closing. With AI new protections are beginning to appear in the system. For example, if lenders are collecting account data directly from banks, mutual funds, and stockbrokers it means there’s no opportunity for borrowers to hand in “modified” paperwork. While no one claims that real estate and lending can be made risk-free, it’s hard not to notice that risk keeps falling. The economy has firmed in recent years and Dodd-Frank has forced the riskiest loans from the marketplace, but are we also beginning to see AI’s invisible hand at work?
Google search is equally open to the biggest companies and the smallest. A lot of programming is cheap to own and free to try. Access to the cloud via such platforms as Microsoft Azure, Amazon World Services (AWS) and the Google Cloud Plaform is available universally and usually one can try a system without cost. According to Salesforce.com, with cloud computing “you’re not managing hardware and software” and like a utility “you only pay for what you need, upgrades are automatic, and scaling up or down is easy.” “Technology is democratizing everything in favor of startups, from computing and storage via AWS to global brand distribution via social media channels,” said Bryan Copley, CEO at CityBldr, a company that provides estimates of what a builder or developer would pay for a property based on its highest and best use. “Small companies have advantages in today’s economy that they didn’t used to have. With a differentiated product
The cost of technology has such a low barrier of entry that even a very small company can utilize the same tech as the largest companies.”
Ken Bartz Founder & CVO, Monster Lead Group
JUNE 2017
ATTOM DATA SOLUTIONS • P6
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