Why AI can’t replace mortgage brokers

[00:00] Ask them, have you run anything by AI and what did it tell you? Yeah, it's the wild west out there right now. The fact is that brokers are licensed, AI isn't. So, it treats us like kids, telling us what we want to hear confidently. If you don't adopt it, you're going to be left behind.

[00:28] Fergal McAlinden: All right. So, next up we have got Dwight Funding and Chief Executive Officer of REMIC. For you with REMIC, what are some of the main conversations that you're hoping to have today and who are the main people you want to get in front of?

[00:40] Joe White: Yeah, for us it's important, I think, that industry understands the next steps of evolution in their career. So, you started as mortgage agent level one, then you go to level two, then you become a broker. And all the while you're going through that, it's necessary to learn how to use AI and social media, which is another program that we offer. So, we're here just letting people know that wherever you're at in your career, we have something that we think will be of benefit to you.

[01:12] Fergal McAlinden: And you're saying that to chart the rise of AI over the past few years, we've always known that technology and social media and all of that have been big game changers for the industry. AI has almost turbocharged it. What do brokers and agents have to keep in mind? What's been the biggest changes for you or what are the main things that agents and brokers need to keep in mind about the rise of AI?

[01:30] Joe White: Oh, that's a great question. I think the main thing, and what I'm going to be speaking about on the stage this afternoon, is gating the AI and checking it. AI has a wonderful ability to give you an answer that sounds incredibly confident with, but in many cases it's the fine details that it gets wrong.

[01:53] Because it's trained on everything out there on the internet and that means that it's trained on wrong information as well as right information. So, when we talk about gating the AI, that's basically enclosing it in like a pen where it just has access to accurate information. It doesn't go out and get inaccurate information, which is a big problem right now.

[02:17] Fergal McAlinden: Especially when we talk about the mortgage industry where people are making the biggest purchase of their lives. We've all seen what ChatGPT does when it confidently says something that's not the case at all. It's something that not a lot of people would trust exclusively to AI when they're making a home purchase.

[02:33] Joe White: Yeah, a lot of people are using AI for their home purchase. And when they do a search online, especially on Google, they don't realize that they're talking to AI when Gemini is giving them a summary. That's a problem because everything is so confident. All of these AI systems are so confident.

[02:56] So, one of the strategies we talk about is when you're taking a new client, ask them, "Have you run anything by AI and what did it tell you?" Because I think one of the most important things for brokers and agents to do now is correct the wrong information that people are getting from AI. It's the wild west out there right now.

[03:16] Fergal McAlinden: Absolutely. And it kind of shines a light as well on the value of brokers, too. There were a lot of existential questions about what was going to happen to the mortgage agent or broker profession as AI continued to rise. But what you mentioned is kind of proof that the profession isn't going anywhere despite this.

[03:32] Joe White: Oh, 100%. The fact is that brokers are licensed, AI isn't. The fact that brokers have errors and omissions insurance, so if something goes wrong, the client's protected. AI can't do that.

[03:47] What consumers, I think, will understand over time is that what they get with dealing with a broker is competency. It takes years to create. Confidence, you know, I talk to my kids and I tell them something confidently just because I want them to do something. And I don't know if what I'm saying is true or not, but I use it confidently. That's what AI does. It treats us like kids, telling us what we want to hear confidently. And at the end of the day, I think the broker's value is their competence. And that takes years to establish.

[04:18] Fergal McAlinden: For sure. And then obviously there's the question of what happens whenever something goes wrong or there's an issue. And that human touch really comes in as well with brokers and how they can deal with their clients, which AI might not be able to do.

[04:31] Joe White: Yeah, absolutely. You're dealing with somebody who's under a power of sale or can't close on a condo. They need some empathy. They need somebody that can understand.

[04:43] In addition to that, it's necessary for consumers to know that brokers have an entire regulatory body behind them. And that regulatory body helps ensure that consumers are getting accurate information. That doesn't happen in AI. There's nobody there ensuring it. And the regulators don't have the ability to regulate the AI like they do individuals.

[05:09] So, I think over time it's going to become much clearer that it's vitally important for consumers to use somebody who has that backdrop of a license and a regulatory environment.

[05:20] Fergal McAlinden: Is that a shortfall, maybe a danger point for the industry at the minute, the fact that there aren't those regulatory stop gaps when it comes to AI and on the advice that is coming?

[05:31] Joe White: Yeah, I think it is. I spoke to an MPP recently and brought that to their attention, that AI is giving confidently wrong answers and acting like a mortgage broker. I asked ChatGPT, "I need a mortgage. Can you act like a mortgage broker?" "Sure, I can do that. Here are all the questions that I'm going to ask you and all the information that I need."

[05:58] And now it's asking me for financial information. But the problem is, I think, in the regulatory environment, they're not sure how to regulate it. Who would oversee the regulation of AI when it comes to financial services?

[06:14] I understand that there is legislation that generally covers third-party advice, but it's not enough. Somebody goes online this morning and starts typing in and has a 15-minute conversation with Claude or ChatGPT or DeepSeek, and they walk out of there thinking, "Now I know what I have to do." And they don't know. They could be wrong.

[06:29] Fergal McAlinden: Sure. And there's an element of AI tools as well. I find that it's almost anxious to reassure people. Maybe it takes your side a little bit more than a broker who gives kind of hard-headed advice or the right information would necessarily do. So, maybe with AI tools you're not necessarily getting what's always best for you.

[06:46] Joe White: 100%. And I think it goes back to the entire OpenAI, Anthropic. Their goal is to have an AI that gives you information that you find valuable and helpful, but it's wanting to please you by giving you information that makes you happy.

[07:02] Whereas a broker's job is to give you information that's grounded in reality. So, an AI might end up telling you, "Yeah, yeah, you can do this and you can get approved. So, go start looking for a house." Whereas a broker might have a more realistic outlook on that.

[07:20] Fergal McAlinden: Absolutely. Okay, well, Joe, great to talk to you today. Anything else that you want brokers to keep in mind before we let you go or any other conversations that you're going to be having with them today?

[07:29] Joe White: Yeah, I think the one thing to remember is AI, although it has its shortcomings, it's here to stay and you have to adopt it. While others are adopting it, if you don't adopt it, you're going to be left behind. But you have to do it in a very intelligent, meaningful, intentional way. And that's what we're going to be talking about.

[07:50] Fergal McAlinden: And just a word, Joe, on the event itself. What's your perspective on how it's gone so far? We've had mortgage summits in the past which you'd been involved with. This is the first time as a Mortgage Fest. How's it been for you so far?

[08:02] Joe White: Yeah, it's great. It's a really nice environment. People seem to be enjoying themselves. I'm enjoying myself and checking out the different speakers as well.

[08:12] Fergal McAlinden: Brad Stuffle, we're looking forward to your presentation later on. We'll see you here next year.

[08:15] Joe White: Thank you very much.