The Mortgage AI Arms Race: Why Your Vendor’s AI is Already Outdated
February 2, 2025
The mortgage industry is no stranger to technological evolution. From the digital transformation of loan origination to the rise of automation in underwriting, mortgage lenders have long relied on technology to drive efficiency and reduce costs. However, the rapid advancement of artificial intelligence (AI) is exposing a harsh reality—many of the AI tools that lenders have been sold in recent years are already outdated.
In an industry where compliance, document processing, and data accuracy are paramount, mortgage technology vendors have long touted their AI investments as cutting-edge. But as publicly available AI capabilities grow more powerful and accessible, the value proposition of these legacy solutions is rapidly diminishing. The AI arms race is accelerating, and lenders who continue to rely on outdated technology risk falling behind.
The Problem with Legacy AI Investments
Some mortgage technology providers have invested heavily in AI over the past five to ten years, hiring large teams of experts and developing proprietary models for tasks like document classification, data extraction, and underwriting assistance. These vendors often position themselves as AI leaders, asserting that their years of experience give them a competitive advantage.
However, the reality is that AI doesn’t operate on a linear timeline of improvement—it moves exponentially. What was state-of-the-art even three years ago is now eclipsed by more advanced, cost-effective solutions. Large vendors that spent years developing in-house AI tools now find themselves struggling to keep pace with publicly available AI models that are improving at an unprecedented rate.
A prime example of this came from a recent industry conversation, where the head of strategy for a major Loan Origination System (LOS) vendor dismissed the idea of competition in AI. “You shouldn’t even try to compete with us,” they said. “We’ve had hundreds of experts working on AI for over five years.” Yet, despite their head start, this company has seen declining product sales in its AI-powered offerings. The reason? Their solutions have already been surpassed by publicly available AI capabilities.
AI Innovation: A Faster, More Flexible Approach
The biggest shift in AI development isn’t just about raw power—it’s about accessibility and adaptability. Today, companies don’t need massive AI teams or years of research to build high-performing solutions. By leveraging off-the-shelf AI models from platforms like Microsoft, businesses can create and deploy cutting-edge AI solutions in a matter of months, not years.
This shift fundamentally changes the competitive landscape. Instead of being locked into expensive, proprietary AI solutions from legacy vendors, mortgage lenders now have access to AI that is:
- Faster to implement – Modern AI models can be deployed and adapted to specific business needs in weeks or months, rather than years.
- More cost-effective – Instead of paying for outdated AI tools built on yesterday’s technology, lenders can tap into AI platforms that are continuously improving and scaling at a fraction of the cost.
- Easier to integrate – API-driven AI models allow lenders to seamlessly integrate AI capabilities into existing workflows without overhauling their technology stack.
How Public AI is Surpassing Legacy Models
Consider document classification and data extraction, two areas where AI is commonly used in mortgage processing. In the past, lenders had to rely on vendor-provided Optical Character Recognition (OCR) solutions that were slow to improve and difficult to customize. These solutions often required extensive training on lender-specific document sets, adding time and cost to implementation.
Now, with advances in AI, publicly available models can achieve higher accuracy with minimal training. For instance, some mortgage lenders have implemented document AI solutions in under 90 days using Microsoft’s AI models—outperforming legacy OCR solutions that took years to develop. These newer systems not only classify documents with greater accuracy but also adapt to lender-specific needs in a matter of weeks.
The same dynamic is playing out across the mortgage AI landscape. AI-driven underwriting assistance, fraud detection, and borrower engagement tools are evolving so rapidly that legacy solutions built just a few years ago are struggling to stay relevant.
The Risk of Betting on the Wrong AI Partner
For mortgage lenders, the biggest risk isn’t just using outdated AI—it’s being locked into a vendor that isn’t evolving at the pace of AI innovation. Many legacy vendors continue to sell AI solutions that were developed using older techniques and are now falling behind publicly available alternatives.
Lenders who invest in these outdated solutions will find themselves paying for capabilities that soon become obsolete. Worse, they may end up stuck with AI tools that are rigid, difficult to update, and costly to maintain.
In contrast, partnering with an AI provider that actively evolves with the latest advancements ensures that lenders stay ahead of the curve. The right AI partner is one that continuously adapts its solutions, leveraging the latest breakthroughs in machine learning, natural language processing, and document automation.
The Future of AI in Mortgage Lending
The AI arms race in mortgage lending isn’t about who has invested the most money or hired the biggest team—it’s about who can keep pace with AI’s rapid evolution. Lenders need to ask themselves:
- Are our AI tools improving as fast as publicly available models?
- Are we overpaying for AI capabilities that will soon be standard and free?
- Is our AI partner committed to continuous innovation, or are they selling us a solution that was cutting-edge five years ago?
The mortgage industry is at an inflection point. AI is no longer a long-term investment that takes years to pay off—it’s an immediate, transformative force. The lenders who recognize this shift and embrace AI’s rapid evolution will gain a decisive competitive advantage. Those who don’t may find themselves stuck with expensive, underperforming tools in an industry that’s moving too fast to wait.
Want to learn more about how Brimma can help you keep-up inn the AI arm race? Drop us a line at salesinfo@brimmatech.com
