S2E3: $15 Trillion Mortgage Industry Being Disrupted By AI | Jim Cutillo (Alpha7x)

In the latest episode of Get Paid, I had the pleasure of speaking with Jim Cutillo, a 30-year veteran of the mortgage industry and founder of Alpha7x. His company is transforming mortgage lending with AI agents that cut costs and streamline the entire process.

If you've ever bought a home, you know the mortgage process can be a nightmare. What you might not know is that it's actually getting worse, not better.

Jim shared a startling revelation: despite decades of technological advancements, the mortgage industry has become less efficient. "The cost today is at a record high for producing a mortgage," he explained. The time it takes to close a loan has actually increased by 10-12 days compared to just a decade ago.

The numbers are eye-opening. It costs about $12,000 to manufacture a mortgage loan today. Manual tasks account for approximately $2,200 of that cost. These costs get passed directly to consumers through higher interest rates. Consumers pay for these inefficiencies over the entire 30-year term.

Why is this happening? Jim points to fragmented systems and siloed data. "You get stuck staring and comparing data and documents against system data all day long," Jim explains. "As more technology was introduced, you've created more complexity."

Jim's solution is simple: Alpha7x has created an "army of digital AI-based agents" designed to replace human labor across the mortgage supply chain. These aren't just chatbots. Alpha7x has built sophisticated agents that handle complex tasks like processing mortgage loans, reviewing closing documents, and performing compliance checks.

Jim shared a compelling example: "We did a proof of concept for a large bank doing OFAC checks. I was shocked at the number of people they have doing the process today—15 people manually doing this process. With our agent, they'll need three people."

Perhaps most interesting is Alpha7x's business model. They use outcome-based pricing, not seats or licenses. They only make money when they save clients money. "Our incentives are aligned right out of the gate," Jim says. This approach stands in stark contrast to both SaaS vendors who charge licensing fees regardless of outcomes, and Business Process Outsourcers who simply move labor offshore.

Alpha7x has also built a tool that allows customers to create new agents without writing code. "We intend to put the power of these agents in the hands of our users," Jim explains. Organizations can rapidly deploy new automation. "They can configure that and have an agent working for them in two weeks."

Jim is applying the same principles to his own company that he preaches to clients. "How are we going to ramp this company to 10 million ARR and have less than 20 people? Because that's my goal," he says. "I'm not going to build a people company when I'm trying to talk to people about building agents."

This puts Alpha7x in the emerging camp of "$1 million per employee" AI companies. "Drink your own Kool-Aid," Jim advises. "If we're building agents, we might as well act like agents and build a company that is run by agents."

While Alpha7x is focused on mortgages today, Jim sees potential far beyond this market. "We could do this in insurance. We could do it in other industries that are data and document centric," Jim says. What sets Alpha7x apart is their deep domain expertise. "What we're building is a micro LLM, a private LLM that understands mortgage regulations and guidelines. That's a much different animal to build."

Alpha7x is in an enviable position when it comes to funding. "We have investors knocking on our door that want to invest, and I'm like, 'Okay, we're fine,'" Jim says. "Everybody's like, 'When are you going to do a Series A?' I'm like, 'What would I do a Series A for?'"

He continues: "This will print money. It's a high-margin business. We should be able to reinvest that cash in development of the product. From a sales perspective, we haven't even hit go on the sales side, and we're getting calls every day."

Jim's advice for entrepreneurs looking to build in the AI agent space is to find domain-specific problems. "Find a niche in a market, own that niche, and expand it," he suggests. But technical expertise alone isn't enough. "You need somebody with domain expertise on your team."

With a $15 trillion mortgage market ripe for disruption, Jim Cutillo and Alpha7x are proving that AI agents can transform even the most document-heavy industries.

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