The Use of AI in Real Estate Loans
In a recent episode of the Real Estate Espresso Podcast, I had the pleasure to interview Michael Vandy, CEO of Addie AI. The technology company aims to revolutionize the mortgage lending process by integrating artificial intelligence (AI). With a background in enterprise technology at Amazon Web Services and experience in AI and software engineering at Carnegie Mellon University, Michael brings a unique perspective to the rapidly evolving world of real estate investing.
The Application of AI in Mortgage Lending
Michael described how his team identified a gap in the mortgage lending market that AI could address. AI’s current value in this space is in accelerating due diligence by automating the “scavenger hunt” for relevant data. Applications of AI include automating credit policy checks, automating the extraction of relevant data from documents, and shortening the closing time. The result is not only a far smoother experience for the real estate investor but also vastly improved efficiency for lenders.
Future Possibilities for AI in Real Estate
While the technology is not quite there yet, Michael sees AI eventually playing a central role in complex tasks such as title search and title analysis, although he estimates that this development will take another five years or so. In an ideal scenario, AI could analyze the chain of ownership over time and conduct similar complex analyses once titles have been received.
Challenges and Future Developments in AI
Despite the potential, AI’s application in this space is not devoid of challenges. For example, AI algorithms tend to “hallucinate,” making false assumptions based on patterns in the data fed to them. One of the primary obstacles will be achieving regulatory compliance with these tools—a development Michael foresees happening in the next 18 to 24 months.
Another challenge is enabling AI to understand the boundaries of specific contexts to avoid translating specific examples into false generalizations. One plausible solution to this problem would involve giving AI access to live internet data, thus ensuring that the information used to train the AI remains current.
Conclusion
In the interview, Michael expressed great enthusiasm for the potential of AI in real estate, particularly in the mortgage lending process. While the technology faces considerable challenges, it is the next frontier in real estate, promising elevated efficiency and streamlined processes for both lenders and investors.
For more information or to request a demo, please visit Addy.so or connect with Michael Vandy on LinkedIn.
