HOUSINGNEWS REPORT
HOUSING PRECOGS: BIG DATA PREDICTIONS BEYOND HEURISTIC HUNCHES
and you need not be a financial colossus to succeed. Far from Silicon Valley the Millennium Bank of Ooltewah, Tennessee, saw profits grow by 120 percent between 2014 and 2017 through the use of data- based decision-making. “The bank can now answer small loan requests in seconds,” reports American Banker. “This speed in decision-making means Millennium’s lenders are spending less time to complete smaller, uncomplicated deals while freeing them up to work on the more complex loan requests.” “Small firms may find it challenging to build their own data and analytics teams in-house, but there are now a preponderance of analytics- and data- as a service companies that offer turnkey solutions for just about every application,” explains Alex Villacorta with HouseCanary. “In many instances, these services can be paired with pre-curated data sets that allow small firms to marry their own data with large data sets that would have been prohibitively expensive to acquire from their original sources.” Nimble fintech lenders can utilize AI efficiencies while at the same time avoiding many of the costs faced by traditional lenders — mammoth personnel armies, huge branch systems, ATMs, legacy expenses from past years, etc. Moreover, there’s no reason why massive and well-known online players cannot enter the lending industry. Anyone for a Google mortgage or an Amazon HELOC? How did this happen?
BEWARE OF THE TECHLASH
It might seem as though fintech players with their computers and math are the wave of the future but not so fast. To make AI work you need data and right now there’s a growing sense that maybe companies know too much. As a result the fintech revolution may be slowed but not stymied by a growing techlash, hurdles which won’t be so easy to overcome. Data value “Technology innovation in the real estate industry is robust,” said NAR General Counsel Katie Johnson in April. “The notion that real estate isn’t highly competitive and listing data not readily available is unsubstantiated,” she argued. “To the contrary, a wealth of listing data is available to consumers and technology companies from a multitude of sources, and Realtors provide their clients and consumers with more real estate information today than has ever been available.” “If information sharing allows consumers to avoid payments to real estate agents for listings they contributed to the MLS or for brokerage services provided, then broker incentives to cooperate and share information are diminished,” says Fredrick Flyer, who has served as an economic expert for Fortune 500 companies as well as the U.S. Federal Trade Commission, Department of Justice, and the Department of Energy. “Conversely,” he adds, “setting limits on access to brokers’ data by third-party aggregators can enhance broker competition and in turn make consumers better off.” Translation: listing data has value — and brokers have long felt they should capture more of it. If brokers gain more revenue from their data it also means data users will face higher costs. Privacy There is a growing debate regarding what’s private and what isn’t. There is no right to privacy listed in our Founding Documents, instead the concept was outlined in an 1890 article from the Harvard Review by Samuel Warren and Louis Brandeis arguing that “the common law secures to each individual the right of determining, ordinarily, to what extent his thoughts, sentiments, and emotions shall be communicated to others.” Later, in 1928, in a Supreme Court decision, Brandeis famously defined privacy in the Olmstead case as “the right to be let alone – the most comprehensive of rights and the right most valued by civilized men.” But maybe listing data is “too” widely available, so available that it devalues broker services and worth.
Given Victorian notions of privacy many were outraged when Scott McNealy, then CEO of Sun Microsystems, said in 1999 that “you have zero privacy anyway. Get over it.”
Not everyone agrees.
“Users should be in control of how their data is used,” wrote Bill Gates in 2002. “Policies for information use should be clear to the user.
9
MAY 2018 | ATTOM DATA SOLUTIONS
Made with FlippingBook Online newsletter