With global economic challenges rising in 2023, mortgage lenders are looking to new digital solutions to simplify the underwriting process. Increased regulations in recent decades have made mortgages complex and have compounded the associated costs, from origination and credit report fees to application and underwriting costs. And, when loan officers encounter tough procedural questions and borrowers with non-traditional or complex finances (common in underserved markets), they are usually required to forward them to a small number of experts, making the process even slower and more expensive. In fact, of the close to $2 trillion in mortgages that Fannie Mae projects for 2023, about $180 billion will be lost due to friction costs associated with the home sale and financing, estimates Sun West Mortgage Company CEO Pavan Agarwal.
But, friction is not only financial. The mortgage lending and real estate industries are facing a crisis of trust. While interactions with loan originators and realtors have largely migrated online, they still rest on the trustworthiness of individuals. For example, homebuyers lack the education and support to properly assess counterparty risk of parties to whom they will be trusting their life savings. Home sellers may take a property off the market, only to find that a prospective buyer overestimated their financing capabilities. To allay fears, countless hours are expended by professionals marketing their services and attempting to prove their reliability. Despite such efforts, many clients express a lingering sense of distrust in all parties of the transaction.
To best respond to these pressing needs, Sun West has developed a pioneering blockchain-based AI platform named Morgan. Powered by its sister company Celligence.com and paired with the TRU Approval platform, Morgan is an AI platform that can process loan requests in minutes. It then converts the pre-approved property specific loan to a property agnostic tradable NFT in hours, which is backed by real dollars and conditionally guaranteed by Sun West. Since announcing the Tru Approval program three years ago, Sun West has always honored the conditional guarantee. By moving key financial transactions from private ledgers to the blockchain, Sun West not only expedites the underwriting process—it also offers increased transparency to all parties.
“By making the underwriting process immediate, you remove the mystery, anxiety, and expenses of financing, and that immediately translates to the customer,” Agarwal says. “Morgan reduces the cost of originating the loan, saves money for our borrowers, and removes any doubt about available financing.”
How Morgan speeds up the underwriting process
When thinking of consumer AI, digital assistants like Siri or Alexa may come to mind. While Morgan employs far more natural speech recognition technology, its real power lies in how it streamlines and improves the home-buying experience. Morgan’s embedded crypto wallet holds financial documents and assets in a secure locker where loan officers, realtors, and borrowers can find and move documents easily by conversing with a simple interface that functions like your favorite chat application.
The platform also manages multi-step procedures such as income calculation, changing the terms of a loan, and running credit, completing them without the clerical errors or delays typical of the industry. Of the thousands of loan conditions Sun West receives, 99.5% of them are reviewed and resolved by its AI platform in under 90 minutes, with 70% being completed in 40 minutes.
Morgan’s speed and accuracy are thanks in part to what Agarwal calls empathetic technology. The platform deciphers how a user feels based on keystrokes, tone of voice, fluctuations in speed and stress of word pronunciation, all while effortlessly conversing in dozens of languages. It reassures anxious borrowers and offers pertinent information that might help. The platform’s deep knowledge of client history even allows originators to offer their clients improved loan conditions. And, because Morgan is “people-powered,” as Agarwal notes, a user can always double-check information with a live professional. The power of machine learning coupled with human oversight allows Sun West to warrant 100% of Morgan’s analyses, which are typically returned in minutes.
The improved transparency of NFTs
Once the loan is underwritten by Sun West and a purchase contract is executed, Morgan converts it to a property agnostic NFT. The money is stored in trust accounts backed by financial institutions, while the loan is tokenized and embedded in a smart contract. This approach empowers the homebuyer to make the equivalent of an all-cash offer, so the home seller is assured that adequate financing is indeed available. A smart contract also confirms that the homebuyer is not making multiple offers simultaneously since there can only be one holder of an NFT at a time.
“What we traditionally call a homebuyer is now a seller of their unique, credit-qualified NFT,” Agarwal explains. “To ensure the NFT is traded as agreed, the homebuyer can either close the transaction and transfer the NFT or forfeit their earnest money deposit.”
Converting approved loans into NFTs has the added benefit of allowing Morgan to offer better service to lower-income and gig-economy borrowers. Instead of having to resort to niche lenders who specialize in helping those with more complicated income and credit histories, all homebuyers are empowered to present offers without open-ended financing contingencies.
A blockchain-based revolution in real estate
Sun West is currently marketing Morgan to mortgage brokers with plans to sell to realtors, and will release a version tailored to consumers on February 12th — Super Bowl Sunday. Several banks are also moving forward with participating in the Morgan blockchain network thereby being able to offer the Morgan Warranty and Tru Approval to their customers.
The company is focused on educating the public about how blockchain technology can bring cost-efficiency and greater transparency to families hoping to achieve their dream of home ownership. And while the blockchain is still a new concept to some, Agarwal believes it is poised to streamline real estate transactions. “Storing money and documents on the blockchain is a natural fit for the real estate industry,” he says, adding that real estate has historically been represented by a low-tech, paper “NFT” which is naturally subject to security, error, and trust concerns.
Ultimately, Agarwal believes that the blockchain is the key to safer, more efficient, and more equitable financial transactions in the real estate industry and beyond. “When financial ledgers are public, you are no longer limited to making decisions based on an individual’s word,” he says. “Everyone is privy to the same information, and everyone gets to enjoy a true sense of security.”
Experience Morgan’s empathetic AI technology
About Celligence
Celligence is an affiliate of Sun West Mortgage Company, Inc. (Sun West), one of the largest independent, privately owned financial services companies. As one of the fastest growing fin-tech companies, Celligence provides exceptional service, technology, and product innovation.
At Celligence, a team of brilliant engineers are continuously filing new patents and expanding the boundaries of the financial services industry through innovations in mobile applications, customer acquisition and retention algorithms, and AI based process automation.
About Sun West Mortgage Company (NMLS ID 3277)
At Sun West Mortgage Company, Inc. we dedicate ourselves to offering an amazing experience to our customers. To accomplish this, we empower our loan officers so that they can find great rates and provide the most fitting loan options for each customer – at amazing speed. Our focus on technology has given us an edge in the mortgage industry to offer exceptional turn times so the customers can get into the home of their dreams sooner!
We are committed to our core values of people, experience, technology, and product. Sun West was founded in 1980 with the perspective of “customers first” and the desire to make the mortgage process easy and stress-free for prospective homeowners. Since then, Sun West has been servicing a multi-billion-dollar loan portfolio and is licensed in 49 states, the District of Columbia, Puerto Rico, and the US Virgin Islands. Our 42 years of experience has been passed down to everyone here at Sun West through excellent leadership and capabilities.
For licensing information, go to: www.nmlsconsumeraccess.org. Visit http://www.swmc.com/swmc/disclaimer.php for the full list of license information. Please refer to https://www.swmc.com/TXdis.php to view Texas Complaint Notice and Servicing Disclosure. In all jurisdictions, the principal (main) licensed location of Sun West Mortgage Company, Inc. is 6131 Orangethorpe Avenue, Suite 500, Buena Park, CA 90620, Phone: (800) 453-7884.
