Vishal Garg, Better.com
Source: Better.com
The online mortgage platform Better has partnered with OpenAI to launch an app within ChatGPT that the companies say will dramatically reduce the time it takes to underwrite a mortgage or home loan, CNBC has learned exclusively.
The app, which the company announced later Thursday, leverages Better’s mortgage engine and combines it with OpenAI’s models to speed up the underwriting process for loan officers at banks, mortgage brokers and fintech companies, Better CEO Vishal Garg said in an interview.
“Shrinking the mortgage underwriting process that so many of us have personally experienced from 21 days to just 47 seconds and making it possible through ChatGPT is a huge relief for everyone,” OpenAI Chief Commercial Officer Giancarlo Lionetti said in a statement to CNBC.
“OpenAI is proud to partner with Better to develop technology that will revolutionize the mortgage industry and make it cheaper, faster and easier for American families to finance a home,” he added.
For decades, getting a mortgage has been one of the most time-consuming parts of American finance, with lenders relying on dozens of steps that can take weeks to complete. After the 2008 financial crisis, big banks like JPMorgan Chase withdrew from the US mortgage market, which led to the rise of non-banks as well Rocket mortgage And United Wholesale Mortgage.
Better shares rose as much as 5% on the news, while Rocket Mortgage shares fell as much as 6% and UWM shares fell nearly 4%.
Risk of disruption?
Now, at a time when leading artificial intelligence companies are targeting inefficiencies across the corporate landscape, it is possible that AI agents will reshape a U.S. home lending market that originates more than $1 trillion in mortgages per year.
Garg said the new app is part of Better’s shift from a primary lender for consumers to a “mortgage-as-a-service” technology platform for other mortgage providers.
The companies are directly targeting the dominant mortgage providers by allowing competitors to move faster, Garg said. According to Better, lenders can save an average of 21 days, reducing the cost of borrowing and ultimately saving consumers money.
“AI is now taking over mortgages,” Garg said. “Rocket, UWM, Pennymac, a group of people who are large publicly traded companies, make their money by effectively imposing a one and a half percent tax on mortgage underwriting. … That’s $20 billion that the American public pays in a typical year.”
OpenAI’s models, fed with Better’s mortgage data, save time by simultaneously running parallel workflows on dozens of checkpoints, including appraisals, property reports, income, credit reports and other metrics, Garg said.
“It’s not a simple tool call. It’s a multiple tool call with a super long, extended logic tree and a very large context window,” Garg said.