Mortgage lenders weigh AI, alternative data and credit models

The use of artificial intelligence, alternative data, and new credit models is becoming increasingly important for mortgage lenders, as they look for ways to streamline the lending process and expand access to credit. At a recent MISMO panel discussion, experts highlighted the potential for rental and cash flow data to provide a more comprehensive picture of a borrower's creditworthiness, particularly for those who may not have a traditional credit history.

This shift towards alternative data and AI-driven lending models has significant implications for the mortgage industry, as it could help to increase lending to underserved communities and provide more accurate assessments of borrower risk. However, panelists also noted that the use of AI and alternative data raises important questions about licensing and compliance, as regulators begin to scrutinize these new approaches.

As the mortgage industry continues to evolve, it's likely that we'll see further developments in the use of AI, alternative data, and new credit models. What to watch next is how regulators respond to these changes, and how lenders balance the need for innovation with the need for robust compliance and risk management. Additionally, industry stakeholders will be keeping a close eye on the development of new data standards and protocols, such as those being established by MISMO, to ensure that these new approaches are implemented in a consistent and responsible manner.

Originally reported by housingwire.com. ASIDNews adds analysis for real estate & property readers.