LenderCity has deployed FinKube's Electronic Loan Services Assistant, a chatbot for interacting with prospective borrowers on the LenderCity website.

"The technology enabled us to offer a high-tech, high-touch experience by leveraging technology to reduce cost," said Gregg Harris, principal at LenderCity. "It enabled us to reduce the work the loan officer does up front. The chatbot provides assistance to borrowers that have questions or need information. That means, we don't have to make a person available to answer their questions."

[caption id="attachment_9220" align="alignright" width="225"] Greg Harris[/caption]

Now used to qualify leads, in the future, LoanCity will use ELSA to help borrowers with frequently asked questions, fill out a loan application or get a rate quote. So far,  however, just a few months into the implementation, 20% of consumers use ELSA, rather than filling out a form. That percentage will increase with time and because ELSA provides assistance to users that have questions or need more information, without having to make a call or search the website.

"Consumers want immediate answers to their home finance questions and ELSA is smart enough to provide the information they need and gather the information we need to prequalify the borrower," said Harris.

ELSA uses artificial intelligence and machine learning to enhance the origination process from origination to close. It’s powerful enough to gather borrower information, render decisions, and automate time-consuming tasks.

LoanCity anticipates attaining significant efficiency and costs savings--on client acquisition and service costs. For instance, the organization has assigned a loan officer to answer questions from borrowers--which it will no longer have to do. And there are other efficiency benefits as well.

"We anticipate over time being able to reduce customer acquisition costs by 50 percent to 80 percent, engagement by 500 percent, reduce customer service costs 50 percent to 80 percent, and increase loan retention by a factor of six," said Harris. "And the technology puts me on the map to compete with bigger players,"

The Mortgage Bankers Association Builder Application Survey data for December 2018 shows mortgage applications for new home purchases decreased 6.1 percent from a year ago. Compared to November 2018, applications decreased by 13 percent. This change does not include any adjustment for typical seasonal patterns.

“New home sales declined for the second straight month in December, to 552,000 units from 627,000 units, as factors such as a volatile stock market and economic uncertainty, both here and abroad, likely kept some prospective buyers away,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “This pullback in activity was in spite of falling mortgage rates and a robust job market. Looking ahead, if mortgage rates remain low, housing inventory rises, and home-price growth continues to steady, we expect to see a rebound in purchase activity this spring.”

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 552,000 units in December, based on data from the builder application survey. The new home sales estimate is derived using mortgage application information from the builder application survey, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for December is a decrease of 12 percent from the November pace of 627,000 units. On an unadjusted basis, MBA estimates that there were 37,000 new home sales in December 2018, a decrease of 17.8 percent from 45,000 new home sales in November.

By product type, conventional loans composed 69.5 percent of loan applications, FHA loans composed 17.3 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 12.5 percent. The average loan size of new homes increased from $326,037 in November to $334,944 in December.

MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Using this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level.

This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau every month. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.

[caption id="attachment_9147" align="alignright" width="200"] Richard Thornberry, CEO of Radian.[/caption]

Radian Group Inc. has acquired Five Bridges Advisors LLC, a developer of data analytics and predictive models leveraging artificial intelligence, machine learning and traditional econometric techniques.

The acquisition is consistent with Radian’s growth and diversification strategy, as well as its focus on the core product offerings of its title, mortgage and real estate services. In addition, Five Bridges has developed a cloud-based portal that uses deep analytics to provide customers with valuation and risk management tools that span the entire loan lifecycle, from underwriting and origination to servicing, secondary market execution, and securitization.

“We are delighted to welcome Five Bridges to the Radian family of companies, expanding our capabilities and providing our customers across the country with new levels of service and innovation across the residential mortgage and real estate spectrum,” said Rick Thornberry, chief executive officer at Radian.

“This acquisition is another example of how Radian is reengineering and revolutionizing existing industry business models to enhance the overall value proposition for our customers.”

Five Bridges will operate under its current brand and provide the same level of quality products and services to its customers through its offices in Bethesda, Md. Co-founders Steve Gaenzler and Dr. Michael Youngblood will both continue with the business.

Gaenzler will continue to run the day-to-day operations and report to Eric Ray, senior executive vice president for technology and transaction services for Radian. Later this year, Five Bridges will transition to the One Radian brand.