How AI Can Solve Mortgage Crisis With Jen Peachman

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TL;DR:

• The mortgage industry has shifted dramatically from the COVID-era boom (with rates under 3%) to today's challenging environment with high rates, inventory shortages, and first-time homebuyers averaging 38 years old.
• Margin compression is forcing industry consolidation, with smaller mortgage companies being acquired and some credit unions exiting the mortgage space altogether.
• Modern mortgage lenders must focus on efficiency, with loan officers doing "five times the work for the same amount of business" compared to five years ago.
• Automation and AI opportunities exist throughout the mortgage process, from intelligent document processing to natural language search capabilities that save time for both operations and sales teams.
• Despite technological advances, the human element remains crucial in mortgage lending, as personalized outreach and educational support create memorable experiences that differentiate lenders in a competitive market.

Before we dive into the key takeaways from this episode, be sure to catch the full episode here:

Meet Jen - VP and Director of Strategic Lending at GVC Mortgage

Jen Peachman, VP and Director of Strategic Lending at GVC Mortgage, brings over two decades of mortgage industry expertise to navigate one of the most volatile periods the sector has experienced.

Starting her career during the 2008 financial crisis, Jen has weathered multiple market cycles and understands the complex interplay between rates, inventory, and affordability challenges.

Her operational background gives her unique insight into streamlining processes, from paper-based systems to today's AI-enhanced workflows.

At GVC Mortgage, Jen focuses on equipping sales teams with efficient tools while maintaining the human connection essential to helping families build generational wealth.

A passionate advocate for innovation during market downturns, Jen emphasizes how mortgage professionals can leverage technology to provide better customer experiences while adapting to the changing mortgage landscape.

The Mortgage Industry's Transformation: From COVID Boom to Today's Challenges

Five years ago, mortgage lenders struggled to keep pace with unprecedented demand driven by record-low interest rates of under 3%.

As Jen Peachman describes it, "We were just trying to catch up with the demand."

Today, the industry faces what she calls "the most prolonged period of volatility" in decades. This dramatic shift has created multiple challenges: skyrocketing mortgage rates, soaring house prices, natural disasters, and regulatory compliance costs.

The landscape has changed so significantly that many homeowners with low-rate mortgages are reluctant to sell or refinance, further constraining the market.

The post-election environment has introduced additional uncertainty, with many potential buyers "sitting on the fences" waiting to see if rates will decline, making it difficult for lenders to forecast business conditions.

The Rising Age of First-Time Homebuyers and Inventory Constraints

According to Peachman, "The average first-time home buyer in America is now 38 years old," a historically high figure that signals significant affordability challenges.

This demographic shift coincides with severe inventory constraints nationwide. Many homeowners with low-interest mortgages are unwilling to sell and take on higher-rate loans, creating a lock-in effect that further restricts housing supply.

As Peachman notes, "I'm sitting on a two-and-a-half percent mortgage. I don't want to touch my first [mortgage]."

This inventory shortage has increased competition for available properties, driving up prices and making homeownership even less accessible for younger buyers.

The combination of limited housing stock, high prices, and elevated interest rates has fundamentally altered the first-time homebuyer journey, requiring lenders to adapt their approach.

Margin Compression and Industry Consolidation: Surviving in a Tough Market

The mortgage industry is experiencing significant consolidation due to intense margin pressure.

Peachman observes, "We're seeing a lot of acquisitions from smaller, even banks nowadays... smaller independent mortgage companies being acquired because they just can't afford or keep up with the business and make money doing it."

This consolidation trend extends beyond traditional mortgage companies, as "a lot of credit unions are just getting out of the mortgage space" altogether.

Regulatory compliance costs have steadily increased since 2015-2017, further squeezing profitability.

Companies that succeed in this environment are those that can maintain efficiency while managing reduced volume. The mortgage lenders still standing are those who have "weathered this crazy storm" and continue to innovate despite challenging conditions.

Doing More with Less: How Loan Officers Are Adapting to New Realities

Today's loan officers face a fundamentally changed work reality. As Peachman candidly explains, "As a mortgage loan originator, you're probably doing five times the work for the same amount of business that you were five years ago."

This dramatic shift requires loan officers to maximize efficiency and leverage every available tool.

The most successful professionals are those focusing on the "long game" with potential homebuyers, providing education and building relationships that will pay off when market conditions improve.

Mortgage professionals must now thoroughly understand diverse products, from conventional loans to home equity options and construction financing, to serve clients facing affordability challenges.

Success increasingly depends on streamlining workflows and eliminating administrative burdens so loan officers can focus on high-value customer interactions.

Automation Opportunities: Where AI Can Transform the Mortgage Process

The mortgage process offers numerous opportunities for AI-powered automation.

"I've seen a lot of companies really be successful in automating search functionality and using natural language processing" to help teams quickly access information. — Jen Peachman

Document processing automation can eliminate redundant verification steps, as Peachman notes, "Why am I checking that information again?" when conventional loans fit standard parameters.

AI can also analyze borrower data to generate personalized recommendations and trigger timely follow-ups without loan officers "having to dig through all of their own records."

The goal should be significantly accelerating the loan process: "I'd love to see the ability to underwrite, close, and fund a loan in 10 days."

The Implementation Challenge: Overcoming Hurdles to New Technology Adoption

Despite clear benefits, implementing mortgage technology faces significant obstacles.

Peachman identifies several key challenges:

"There's probably some education that is needed for the executive level" about AI capabilities and limitations.

Many decision-makers worry about potential biases in automated systems, especially regarding underwriting.

The vendor landscape is confusing, with mortgage lenders struggling to distinguish between multiple offerings and understand "who does what or how they fit into the process."

Past implementation disappointments have created skepticism, with some lenders feeling they were "guinea pigs" for unproven technology.

Success requires "setting clear and realistic expectations" from the beginning and avoiding aggressive sales pitches that promise more than vendors can deliver. A consultative approach helps lenders understand the implementation path.

Balancing Technology and the Human Touch in Customer Experience

While automation improves efficiency, maintaining personal connections remains vital. Peachman emphasizes this balance: "I think people crave connection. And I think when you can add a level of care into your process and add an element of human touch where you could automate something, if you can fit it in, I think it's worth it."

Technology should enable meaningful interactions rather than replace them.

For example, while automation can remind loan officers about client birthdays or milestones, picking up the phone instead of sending automated emails creates memorable impressions.

These personal connections become particularly valuable when helping borrowers navigate life transitions ("Diapers, diplomas, death, divorce") that might require additional financial services.

The most successful approach combines technological efficiency with genuine human care.

Future-Proofing Your Mortgage Career in the Age of AI

Loan originators concerned about job security should embrace rather than fear technological change.

As Peachman asserts, "I don't think loan originators are going to go away," but professionals must adapt to remain competitive.

This means leveraging company-provided technology resources: "If you're not fully adapting and adopting the resources that the mortgage company has invested in that you work for, what are you doing?"

Originators should focus on their unique value proposition—helping families build "generational wealth" through homeownership and financial education.

Those who differentiate themselves through community engagement, client education, and social media presence will thrive.

Technologies like ChatGPT can help generate content ideas, but originators must personalize these to build authentic connections. Success will come to those who view technology as an enabler rather than a threat.

Would you like to learn more about AI use in mortgage? Check out this episode on discussing mortgage artificial intelligence with Thomas Shaw from LS Mortgage.