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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 32 June 2025 F E A T U R E S T O R Y The Human Element: Augmentation, Not Replacement A common misconception is that AI aims to replace human under- writers. Nothing could be further from the truth. The best implementation recognizes that certain tasks fit AI, while others need human judgment. The optimal balance becomes evident in practical implementation. AI handles data-intensive, repetitive tasks while human decision-making focuses on complex scenarios. Advanced sys- tems can analyze thousands of transac- tions across multiple accounts in min- utes. This frees lending professionals to apply expertise where it matters most. Underwriters, initially the most cau- tious adopters, often become our stron- gest advocates. They see how AI handles calculations while elevating their role to focus on judgment-driven decisions. Beyond Traditional Borrowers: Serving the Self-Employed Market T raditional income verification pro- cesses have been primarily tailored for employees with W-2 forms and pay- stubs. However, self-employment has grown substantially, with approximately 68 million freelance and self-employed individuals in the U.S. With a median net worth of $380,000—four times that of tradition- ally employed families—this group also offers a significant growth opportunity for lenders. However, these individuals present unique challenges for lenders: • Inconsistent income patterns that make traditional verification ap- proaches ineffective • Multiple income streams often spread across different accounts • Lack of standard documentation like regular paystubs • Regulatory requirements that favor steady income A survey by Fannie Mae of 3,000 lending executives revealed that 95% find it challenging to approve applica- tions from self-employed workers under existing regulations. AI solves this by intelligently analyzing bank statements to determine qualified income and income stability, unlocking an entirely new market segment for lenders. The Strategic Imperative: Why Now Matters A I-driven prequalification is not just a technology trend. It's reshap- ing borrower expectations. Same-day prequalification with high confidence is becoming the baseline requirement. Lenders who delay face growing disadvantages as competitors reset expectations. This pattern unfolds re- peatedly across the industry. Organiza- tions implementing intelligent prequal- ification gain market share, while those maintaining traditional approaches struggle to compete. This is especially true in non-QM lending. Traditional approaches cannot handle verification complexity effi- ciently. Lenders using modern systems confidently serve borrower segments they previously avoided. For executives weighing technology investments, the timing is critical. The competitive advantage window is open now but narrowing as more lenders recognize this shift. Transforming Lending: Real Results T he impact of these innovations goes beyond theory. American Heritage Lending recently transformed their prequalification process using an AI platform, and the results speak for themselves: • Qualification decisions in under 10 minutes versus their previous two-day average • 45% reduction in document review time • Processing capacity increased three- fold without adding staff • New ability to confidently serve self-employed borrowers they previ- ously turned away The integration of AI technology not only drastically reduced their pre-ap- proval times, but also contributed to a 300% surge in loan volume and signifi- cant monthly savings in operating costs. But this is not about replacing their underwriters. It is about amplifying their capabilities. American Heritage Lending's team now focuses on relation- ship-building and complex decisions rather than manual calculations. The Future of Lending Is Now T he true potential of AI in mortgage prequalification is not just speed … it is redefining what is possible through Day Zero Certainty. For lenders ready to break free from operational constraints, the technology exists today to make it happen. As the mortgage landscape becomes increasingly competitive, those who adopt AI-driven solutions gain a crucial advantage. They are not just keeping pace with the industry; they are defining its future. The transformation from days to minutes is not simply a nice-to-have effi- ciency gain, it is becoming the essential standard that separates industry leaders from those who will struggle to compete in tomorrow's mortgage market.