RegFi Podcast AI Risk, Regulation & the Future of Mortgage Banking
Aug 14, 2025
Liz Facemire and Gabriel Acosta from the Mortgage Bankers Association share insights on how AI is transforming the mortgage banking industry. They discuss the blend of traditional underwriting with emergent AI technologies and the critical role of human oversight. Key consumer protections such as the Fair Credit Reporting Act and the Equal Credit Opportunity Act are explored, alongside the influence of state-level AI legislation. The duo emphasizes the need for transparency in AI decision-making and the importance of adapting regulations to keep pace with technological advancements.
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Episode notes
Mortgage AI Is Largely Mature Tech
- Most mortgage AI are decades-old algorithmic systems like automated underwriting and credit scoring models.
- These systems are static, government/GSE-developed, and remain central to lending decisions.
Human Still Drives Mortgage Decisions
- The mortgage origination process remains human-in-the-loop with humans verifying and interpreting system outputs.
- Technology like OCR and chatbots mainly speeds intake and reduces manual entry while humans make final lending decisions.
Follow Existing Credit-Consumer Rules
- Comply with ECOA and FCRA requirements for adverse action notices and explainability when AI influences lending.
- Use those consumer-facing obligations as a baseline when designing AI-driven underwriting workflows.