Fintech leaders in the mortgage industry are finding new ways to implement artificial intelligence (AI) into lenders’ processes with much of the focus on increasing turnover and efficiency. Yet, a growing number of lenders are also using AI to enhance borrower inclusion and diversity.
By adopting AI language-processing models, for example, lenders are able to assist non-English speaking borrowers — especially Spanish-speaking borrowers, the nation’s fastest-growing demographic of homebuyers, according to the Urban Institute.
Mortgage fintech competition is heating up as founder and CEO of TidalWave, Diane Yu, plans to make waves with the launch of a Spanish-speaking AI integration for mortgage lenders through its SOLO engine. Loan officers can use TidalWave's SOLO POS (point of sales) to provide translated loan applications and other communication assistance for Spanish-speaking borrowers.
"AI is disrupting mortgage lending by breaking down language barriers," said Yu in a press release shared with NMP. "We're prioritizing Spanish as our first language expansion, with a vision to enable lenders and mortgage seekers to communicate seamlessly across multiple languages, making homeownership more accessible for non-English speakers."
TidalWave’s AI platform purportedly allows lenders to provide a smoother communication experience that incorporates application, processing, and status updates across the full life cycle of the loan — and now, all in Spanish. The system maintains integration with Fannie Mae and Freddie Mac's automated underwriting systems for Spanish-speaking applicants.
Language remains one of the biggest barriers to homeownership for many Hispanic & Latino Americans, with nearly 1 out of 4 (23%) reporting language as a barrier during the mortgage application process. Yet, only 17% of Hispanic & Latino borrowers received translation services from their mortgage lenders.
As a result, nearly one in three (31%) considered abandoning the application process due to language-related challenges and extended timelines, demonstrating how barriers to homeownership arise even in the application process.
“Spanish-speaking immigrants have more than $1.7 trillion in buying power, yet continue to be underserved and underrepresented because vital documents such as prerequisite explanations, loan applications, appraisal documents and closing contracts are rarely presented in Spanish,” added Yu. “Language barriers create difficulty understanding critical loan information, make it challenging for Hispanic borrowers to comprehend important details about loan terms, projected monthly payments, and closing costs.”
Additionally, a report from the National Association of Hispanic Real Estate Professionals (NAHREP) found that more than half of Hispanic homebuyers (51%) incurred additional costs by hiring professional translators to assist in the mortgage process. The report notes that the number of Spanish-speaking real estate professionals would have to double in order to keep up with the demand.
Some lenders and fintech providers, like TidalWave, can meet the growing demand by deploying technology that translates or communicates in other languages, reducing the need to directly increase labor costs. TidalWave’s platform can help Spanish-speaking borrowers navigate the complex loan process by offering support and clarification on mortgage terminology and requirements.
TidalWave's Spanish-language integration is also expected to help address the disproportionately high mortgage application denial rates faced by Hispanic borrowers and increase homeowner equity within those communities.
