I spent this weekend trying to vibe-code a brand-new Mortgage Scoop website. Let’s just say… we’re keeping the current one.

Turns out that giving myself unlimited AI tools did not magically bestow taste or front-end development skills. But that’s beside the point b/c across the mortgage industry, “good enough” is quickly replacing “built properly.”

I know LOs who are pasting full borrower files into ChatGPT to structure deals. As you read this, someone is vibe-coding a CRM, an AI marketing funnel or a pricing engine that probably shouldn’t exist. The barrier to building mortgage tech is collapsing in real-time.

And as trigger leads slide toward irrelevance, the next wave is already here: robo AI voice calls lighting up borrowers’ voicemail boxes w/ all the charm of a cylon. In today’s edition of The Scoop, we’re diving into mortgage tech w/ no safety net.

Plus: an exclusive interview with servicing legend Courtney Thompson on consolidation, Valon’s proving grounds, what ICE is likely gaming out strategically & the risks nobody wants to price. We’ll also unpack the growing headache in 203(k) loans.

This is a packed edition, so please become a paid subscriber to get the full scoop.

(🙏 If you like what you’re reading, tell a fellow mortgage junkie to sign up here.)

Dan Catinella admits he was initially skeptical about Total Expert’s voice AI sales assistant.

“I've been doing distributed retail my entire career, & I was like, there's no way LOs are gonna let bots call their freaking customers,” the mortgage tech company’s chief lending officer said. “They won’t even let a junior LO call, but now you show this text to the LOs and they’re like, ‘When can I sign up?’”

Just over a year after deploying the tech, Total Expert is handling about 8M monthly AI-voice calls. Traditionally the big dog in the CRM arena, the voice AI technology has allowed Total Expert to branch out into new territories of mortgage. 

“We've never been in the DTC game, so it's a unique opportunity to expand into that consumer direct space pretty heavily,” Catinella said. “Probably 30-40% of our volume comes through a couple select DTC customers & the rest comes through distributed retail."

The AI voice technology that Total Expert invested so heavily in is also seeing a much cheaper, more homespun competition emerge.

“There's a zillion of these 5-person companies spinning up,” Catinella said. “They have no idea about our space, they don't even have a basic idea of TCPA regulation & we're seeing a lot smaller broker shops launch these things. If you thought text message abuse was bad, this is going to get out of control."

The amount of trouble & regulatory risk you could put your organization in is extremely high, lawyers told The Scoop. A single lawsuit could be massive b/c the tech is designed to scale like we’ve never before seen. But $1,500 per violation x500,000 calls=you’re fucked.

“We had outside attorneys come in & vet it to protect our lenders,” Catinella said. “We have a lot of constraints around it. The lead stuff is the easy part because most lead aggregators capture consent w/ the lead capture. The retention side of the house is a lot different, especially if you don't own the servicing. You need to get consent from all past customers. That's a big part of what we've been working on."

To Catinella’s point, the class-action attorneys have taken notice. Over a half-dozen TCPA suits against mortgage lenders have been filed in the last 90 days & those didn’t involve AI voice agents. But that’s all changed. As NMN reported, Mortgage One Funding out of Michigan was just sued for allegedly using AI voice agents.

Back in December ‘20, my wife & I looked at buying a 1850s-built farmhouse in upstate New York. The house in Saugerties was a major fixer-upper. But I thought it would be perfect for the FHA’s 203(k) program, which would allow me to wrap a renovation loan into a first-lien mortgage. 

On paper, it was perfect. But the reality was we couldn’t get a contractor to commit to finishing the renovation in the permitted timeline & some contractors expressed annoyance w/ the draw schedule. Even finding a HUD-certified inspector wasn’t easy. That particular problem has only worsened.

“One of the biggest challenges facing the FHA 203(k) program today isn’t borrower demand—it’s the shrinking pool of qualified 203(k) consultants,” said Jennifer Goldsby, who runs “The Reno Gal,” a renovation loan consultancy biz. ”Many of the most experienced consultants are aging out of the industry, & there aren’t enough new qualified consultants entering the field to replace them.” 

Compounding the issue, many consultants rely heavily on contractor bids rather than producing the independent work write-up & cost estimate that HUD actually requires.

“When a consultant’s analysis becomes a rubber stamp of a contractor’s proposal, it undermines the purpose of the role, which is supposed to provide an objective scope of work and cost assessment for the borrower and the lender,” Goldsby said. 

If you’re curious, flippers ended up buying that house in Saugerties & look what they did to it!!!! 

If it feels like mortgage servicing is suddenly the hottest corner of housing finance, you’re not imagining it. In the span of a few months, we’ve seen UWM acquire Two Harbors, PennyMac strike a deal to acquire Cenlar FSB, Freedom Mortgage scoop up a massive $39B UPB Ginnie MSR package, & a wave of strategic reshuffling in the wake of the Rocket Companies–Mr. Cooper transaction.

So what changed?

“I think the marketplace was shaken by the Rocket-Cooper transaction,” said Courtney Thompson, founder of Consigliera & a 20-year-plus servicing veteran. “People looked around & asked: What is our strategy? What are we doing?”

In today’s edition of The Mortgage Scoop, we dive deep into the servicing landscape. Please become a paid subscriber to get the freshest servicing & tech insights you can’t get elsewhere. I promise this is good stuff!