Vishal Garg, Better Mortgage, Founder and CEO: AI, Blockchain, and Fraud in the Mortgage Space


Thank you very much for speaking to us
here at a Money 20/20. How are you guys disrupting the
mortgage space? I think we’re radically transforming
both mortgages and home ownership. We’re making home ownership more affordable and accessible by digitizing the mortgage process, by
taking decisions that used to take three weeks to three months and giving them to
consumers in three seconds to three minutes. And in doing that and using
technology to automate chunks of the process what we are able to do is pass
on those savings to consumers and basically enable them to afford their
dream home sooner than they would traditionally. So innovation obviously is
key to staying ahead of the game. What are you doing in the mortgage space in
that sense? So the mortgage industry has traditionally been focused on b2b
constituents- so mortgage companies either make loans that investors want or
mortgage companies provide products and services primarily to realtors, title
insurers, appraisers, and other folks that are part of the ecosystem. No mortgage
company focuses on customer experience and building really a delightful
onboarding process. And mortgages are hugely important, right, you… people don’t
buy houses for $700,000, people buy houses for $3,200 a month and $140,000
down. And so it’s your most important financial decision. It’s something that
you don’t do every seven years, it’s something that you are actually paying
for every day and the user experience is really terrible.
So our focus is on how can we make this user experience delightful, how can we
help people afford houses better, and how can we help them understand what they’re
buying in a much much safer way. And one of the hot topics here Money 20/20 is blockchain. Are you toying with the idea of using blockchain? We are. We think blockchain has a role to play in the mortgage industry, and particularly in
areas surrounding land and title. And so, you know, U.S. residential real-estate, it’s a 29 trillion dollar asset class, though land
records are stored at 3600 county courthouses across the country. To get at
older land records you have to send a person out there literally to pull a
file, photocopy it, scan it, and then upload it- it’s not OCR. So if we could
take title and put it on a blockchain dataset, we think we can probably save
every consumer who’s buying a house as much as $1,500 a year. And if that was
true that would be really, really amazing. So we think there’s a lot of
applications there. There’s 3600 counties, each with their own rules and
regulations, so it’s going to take some time. Of course. And what about fraud. It’s another hot topic and what are you guys doing to
protect your customers? So fraud is really interesting in the mortgage space because people really want to own a house and so sometimes in the past,
particularly prior to the credit crisis, there were, you know, appraisals that were faulty. People would say that they were… they were living on the water when they
were actually facing the parking lot. There’s use- so people would say
I’m buying a second home and I’m gonna live in it, but they were actually
renting it out. So there’s all these different cases where the consumers are
either perpetrating the fraud or where different counterparties like an
appraiser are perpetrating the fraud. So having a digital process means that
we’re able to find data disparities much much faster than it was a traditional
phone-in paper-based process. It means that we today had better have the lowest
error rate of any mortgage provider of 6,000 the mortgage providers in the
country. And that is because we’ve got a digital process and therefore we’re able
to substantially lower fraud. And what about AI is that something you are using, or is that something you’re thinking about using? AI is a term that’s misused a lot in financial services. What we tend to think of it is that we’ve
built a really wonderful rules engine, one that takes a consumer through a
pathway and matches them with the best product at the best price at each step
of the way. So you answer one more question and the next question tees up,
which is going to enable you to get the mortgage faster and cheaper than then
you did before. And so that, in the AI sense, is
called a supervised learning network. And so we have it in use in our process. The
concept of real AI, sort of an unsupervised learning network where the
machine just picks and asks you, like, what’s your favorite color and you say
blue and suddenly it gives you a mortgage, we are really far away from
that. Yeah. And finally what are the top FInTech trends that you think we’re
going to see in 2018? I think 2018 will be a really great year for FinTech
because a lot of the promise of these processes is now starting to manifest
them… itself in the form of a consumer value proposition that is remarkably
better than what the traditional financial services industry- the banks-
offer today. And we’ve now been able to separate the wheat from the chaff in
financial service- in FinTech- because there was a lot of noise. And so
consumers are now starting to believe and use these services. It’s very similar
to, like, there was a turning point with the first dot-com era in 2001 to 2003
where the survivors of the bust suddenly consumers really like them they
started to have a little bit of pricing power and then they just really started
to take off and become pervasive and so I think that’s what you’ll start to see
in 2018. Exciting. Thank you very much. Thank you for having me. Appreciate it.

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