High Rates and Low Volume Accelerate the Rise of AI-Enabled Mortgage Lenders

Monday, April 28, 2025

• Loan rangers: High rates and low volumes are forcing the mortgage industry to adopt AI technology to cut costs and survive in a slower market.

• Lease on life: CBRE's CEO painted an upbeat picture of the office market’s comeback, citing scarcity and robust leasing pipelines.

• Deed police: A Texas title company is challenging FinCEN’s new real estate reporting rule as costly and overreaching.

• Human touch: AI can boost property management efficiency, but it can't replace human judgment in context, ethics, and complex decisions.

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Lending

High Rates and Low Volume Accelerate the Rise of AI-Enabled Mortgage Lenders

Higher interest rates have weighed heavily on the real estate industry, dashing early hopes for a market rebound after the election. Mortgage rates remain stubbornly high, existing home sales continue to slide, and major lenders are scaling back. Amid this uncertainty, a few companies believe that new technology, not just patience, will determine who survives the slowdown.

As traditional players pull back, a new generation of mortgage lenders is stepping in. They are using artificial intelligence to speed up tasks like income verification and underwriting, aiming to make the mortgage process faster and more efficient. Some have attracted major investments and are positioning themselves as nimble competitors to the larger, slower-moving banks.

At the same time, the prolonged rate environment is pushing mortgage companies to expand into adjacent industries to capture new customers. Regulatory scrutiny is also increasing as companies look for ways to gain an edge. As high borrowing costs drag on, it may be the companies that embrace true innovation, rather than just cost-cutting, that are best positioned for the next cycle.

Overheard

Technology

CBRE's CEO Sees Better Times Ahead for Office Real Estate

This week the largest commercial brokerage in the world, CBRE, had its quarterly earnings call. Besides reporting that "most of our businesses were performing better than expected and our new business pipelines were strong" the company's CEO Bob Sulentic also painted a rather rosy picture of the future of the office market.

When asked about what changes he expected Sulentic explained that office was poised for a comeback. "What we have going on with office right now is two dynamics," he said. "One is a scarcity circumstance. And it's not just Park Avenue. It's all over the gateway markets and other big cities in second- and third-tier markets, companies realize that office space is important to them. They realize that there is somewhat of a return to the mean and that they're forcing that in some cases and it's happening on its own in some cases. And as a result, because there hasn't been much new office space created over the last few years for obvious reasons, the office space that's out there is in big demand.

The return to the office trend has certainly helped office leasing but many are worried that an economic downturn might negate any gains from the changing corporate sentiment around the office. Sulentic does not agree. "The choppiness that we're now seeing in people's confidence about the economy is really not impacting their enthusiasm for leasing office space that much at this point," he said.

Fast Take

Lawsuit Aims to Change Reporting Rules for Cash Real Estate Purchases

In 2024, the Financial Crimes Enforcement Network finalized a rule requiring title companies to report information about non-financial residential real estate transactions. This month, a complaint was filed in a Texas court by the owner of a title company, objecting "to being conscripted into performing government surveillance on its clients."

The plaintiff argues that an all-cash purchase should not automatically be considered "suspicious." They claim that complying with the rule is time-consuming and costly. The attorney who filed the complaint also warned that the broad language of the regulation could mean "there is no limit to what sort of consumer transactions FinCEN might require reporting on."

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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