AI Sold His House for $90K Over Ask. Is the LO Next?

Happy Monday, Scoopers!

This week's big question: If a NYT reporter can sell his house for $90K more than the local agents suggested — using nothing but Gemini & a $200 MLS listing — how long until that same logic comes for LOs?

The short answer: Not as fast as the self-serving surveys want you to believe, but not "never," either. We dig into what the "AI LO" hype gets right & what it gets very wrong (the chatbot in the NYT story literally gave illegal advice).

Also in today’s edition: Bill Pulte reportedly wants a government plane, Mat Ishbia's net worth is plunging, & a loophole to the ‘Ultimatum’ that sounds like a sitcom episode. Plus, scoops on PennyMac layoffs, an exec departure at NMB & much more!

A few weeks ago, a NYT reporter bet his family's life savings on the theory that AI could do an agent's job better than an agent. Five frantic days later, he figures he came out ~$90K ahead & is now eyeing an agent-free purchase next time, too.

Some background before we get to the mortgage implications: Stuart A. Thompson sold his Hudson Valley home for $605K, well above the roughly $550K local agents had suggested. Instead of hiring a listing agent, he used Gemini for pricing strategy, listing copy, staging advice, scheduling & even negotiation. He paid $200 to list the home on the MLS through Homecoin & hired a lawyer for closing. There was one critical error from Gemini, which we’ll get to in a second. But overall, the experiment went much better than Thompson expected.

His broader thesis is that AI doesn’t just hand consumers information; it gives them posture, confidence & judgment, the stuff that used to be the agent’s “moat." By Thompson’s telling, agents in the Age of AI are basically glorified travel agents. Nice to have, but not critical. (BTW, Thompson caveat’d the hell out of his homeselling adventure. He’s a professional AI reporter, the market was hot & his house had no major complications. The buyers still happily used & even paid for their own agent.)

The NYT piece dovetails neatly w/ a new Veterans United survey that has been making the rounds. Per the survey, 53% of prospective homebuyers said they would be comfortable buying a home without any direct human involvement. Nearly 90% said they would share personal financial information w/ a lender’s AI-powered tool in exchange for tailored mortgage advice. And 68% said they trust mortgage information provided by AI-based platforms.

Two things to keep in mind: First, the same survey found only 25% would be very comfortable closing w/o a human, so the headline 53% is baby-poop 💩 soft. Second, consider the source: this is VU's own survey, & VU has an obvious commercial interest in a world where consumers are comfortable going consumer direct.

Greg Sher has already done tidy work poking holes in the sample size & methodology; there’s also a Cotality study from April that found ​​preference for working w/ human professionals “has risen across every major task in the U.S. , w/ 55% of buyers saying they would prefer working w/ a person to secure a mortgage.

Still, between the NYT piece, the VU survey & the money now flowing into the “autonomous LO” category, I don’t think the mortgage industry can totally ignore the replacement theory long-term, either. It costs roughly $12K to manufacture a mortgage & lenders complain bitterly about having to pay “so much” to sales staff.

The same disintermediation logic that applies to real estate agents is applicable to LOs. If a chatbot can guide a consumer through the most complex, highest-stakes transaction of their life, the “trusted expert who navigates an opaque process” surely could be commoditized, right?

An obvious structural risk for LOs should Thompson’s experiment catch fire is the referral funnel. If agent involvement thins out & we see way more chatbot-led transactions, that would thin LO pipelines. But let’s not over-egg 🍳 this one on the agent side. I felt pretty confident that I could sell a home in the Poconos w/o an agent in ‘23, but ultimately got cold feet, couldn’t overcome the logistical issues & instead sought out the most productive agent in the area (6% split). I wanted an expert to protect the downside. Most people are like that — only 5% of people sell homes w/o an agent b/c it’s a highly emotional & relatively rare decision. 

Now, while you can “FSBO” a home sale, you cannot FSBO a mortgage. TILA/Reg Z requires a licensed human MLO w/ an NMLS ID on every consumer loan, & UDAAP/fair-lending exposure makes fully unsupervised AI origination pretty goddamn risky. The chatbot in this very story gave Thompson illegal advice (telling him to advertise 0% buyer-agent commission, barred under the NAR settlement lol) & he only avoided a fine because a human-built platform flagged it.

Having said that, regulation is likely not going to protect some LOs long term. The SAFE Act & Reg Z guarantee a licensed human is on the loan; they don't guarantee that human does the work, or gets paid like today. If AI runs intake, pricing & docs, but a human signs, & that means a single LO could oversee 10x the volume, which would result in fewer LOs (that’s also way fewer seats for tech vendors, btw). Liability, messy purchase files, agent relationships & the ability to scale as an individual will keep top-notch human LOs in the game for many years. But I'd bet that most refis are gone for human LOs within a decade & we will see significant consolidation overall.

Curious to hear your opinion – hit me up!

The FHFA director showed up at his new job at ODNI a day early after asking for a list of every employee in the office so he can determine whether to fire them, sources told CNN. Pulte reportedly asked if he could bring the President's Daily Brief to his house, "raising alarm bells among intelligence officials." Pulte also asked about his level of security clearance (whether it was top secret) & if he had access to a gov’t plane, CNN reported.

“Pulte has repeatedly inquired about his schedule & whether he gets his own government plane, appearing almost overly fixated on his ability to travel between DC, Florida & Chicago — between which he splits his time,” CNN said.

Maybe he can hit up Mike Kortas? 😉

Per Bloomberg, shares in UWM are down 49% this year, compared w/ Rocket, down 26%, & PennyMac, down 38%. Mat Ishbia’s own net worth has fallen 34% to $6.6B this year. And Ishbia has some heavy financial obligations to meet in the coming years. 

Loans w/ just over $1B in principal value that Ishbia borrowed from JPMorgan in ‘23 will mature in ‘28, followed by another set w/ a principal value of $770M in ‘29. Ishbia pledged more than half his stake in UWM as backing for the loans, which were taken out just before the Phoenix Suns ☀ purchase. If JPM is concerned, they’re not letting on.

“We have a long-standing relationship w/ Mat Ishbia & have full confidence in his leadership,” Vince La Padula, a managing director at JPMorgan Asset & Wealth Management, told Bloomberg.

The Two Harbors vote is scheduled for Tuesday…

Let’s say you’re a mortgage broker & want to hang your license at a second shop w/o leaving the original shop to access more products/lenders? You can actually do that in a number of states, including California, Nevada, Texas, Colorado, Washington. It could result in some sitcom-like scenarios, right? For example, maybe the original broker shop is signed onto UWM, but the second is at Rocket Pro? Technically speaking, an LO could be in compliance w/ the UWM broker agreement, though I imagine UWM’s litigation team might see things differently (as well as the other broker shop).

Anyway, this is a new recruiting tactic from one broker shop pitching Pylon…

According to sources, dozens of consumer direct LOs in the Franklin, Tennessee office were laid off on Monday. The writing was on the wall when PennyMac transitioned the entire site to remote work earlier this month, a source told The Scoop. Workers who survived the layoff will be reporting remotely to the new hub in Texas. The Franklin site had LOs but no support staff. LOs said leads dropped from roughly 12 a day to about 4-5 a day in recent months. A spokesperson didn’t immediately get back to me.

Update: A few hours after I published, a spokesperson got back to me: “Given the current market environment and following a careful review of our staffing needs, Pennymac has made the difficult decision to close its Franklin, Tennessee site and reduce the associated positions within our consumer direct lending operations. Affected team members are being offered severance, and we have extended opportunities to remain with the company to a number of impacted colleagues. We are grateful for their contributions and are committed to supporting them through this transition.”

NMB President Michael Brennan has left the mortgage bank, sources told The Scoop. “After careful consideration, we decided to move in a different direction, as we did not believe the relationship was the right long-term fit for the company,” NMB told me Monday. “We appreciate his efforts during his time here & wish him the best moving forward.”

Brennan did not respond to a request for comment. He was president of Movement Mortgage before making the jump to NMB in ‘25. Per RETR, production & LO count has fallen at NMB over the past year.

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