Sarah Wheeler: Let’s delve into how technology is revolutionizing the lending landscape, especially for smaller lenders. In that regard, let’s discuss the new CFPB rule regarding AVMs.
Rohit Chopra: The issue of appraisals is crucial in ensuring the accuracy of property valuations. Over the years, we’ve witnessed problems with both overvaluation and undervaluation. The CFPB emphasizes the importance of accurate appraisals, which will involve a combination of human and machine-driven appraisals.
To address concerns surrounding algorithmic-based appraisals and the potential for bias, we have introduced measures to ensure transparency and fairness. As artificial intelligence continues to advance, it’s essential to have safeguards in place to prevent favoritism and conflicts of interest.
SW: AVMs are a topic that resonates with many due to their practicality. The vast amount of property data collected during the refi boom presents an opportunity to enhance AVM accuracy. How do you plan to leverage this data in improving AVMs?
RC: Our focus on AVMs is centered on enhancing accuracy. The broader discussion revolves around the increasing role of technology and automation in the mortgage industry’s infrastructure.
Concerns have been raised about the consolidation of technology vendors and software providers, such as the dominance of platforms like ICE. The question arises about who truly benefits from automation – whether it leads to shared advantages for consumers and lenders or merely concentrates power in a few gatekeepers within the mortgage ecosystem.
SW: What role do you envision the CFPB playing in addressing these tech-related challenges, such as the ICE merger?
RC: Understanding the dynamics of mortgage technology is crucial. The CFPB is striving to shape the digital future of the mortgage market by advocating for open banking principles. This entails creating a more competitive and seamless banking system for financial products, allowing consumers to share their banking data with various lenders.
By exploring innovative ways to leverage open technologies, such as empowering consumers to provide credit reporting information directly to lenders, we aim to foster a fairer and more efficient mortgage system. Our goal is to support initiatives that benefit both consumers and lenders while preventing the consolidation of power among major technology firms.