00:06I'm Allison LaForgia from Dallas, Texas, sitting with Nima Gamsari, the founder and head of Blend.
00:12Nima, thank you for joining me today.
00:14Thanks for having me.
00:15So, Nima, tell me about how Blend is approaching AI and mortgage and your role in shaping that vision.
00:25I think the biggest mistake people make when going in AI is trying to be too incremental.
00:31So, our approach is, what would this industry look like from the ground up?
00:36And thinking, you know, all the work that we do as humans to underwrite files, process files, talk to consumers,
00:41serve consumers the right product.
00:43We are saying we think we can make that a lot better with AI.
00:47And the beautiful thing for us is that I think as an industry is that AI is getting better every
00:53day.
00:54So, as capabilities of ours collectively gets better and the industry adopts it more and AI under the hood gets
01:00better, we have a lot of tailwinds going our way.
01:04Blend is moving so quickly.
01:06We spoke only a couple of months ago and Autopilot hadn't been launched yet.
01:12You were just launching Autopilot.
01:14Since launching Autopilot, what is the biggest lesson that you've learned from working with lenders?
01:21Well, Autopilot was a totally different approach to products for Blend.
01:27We had originally built Blend as something that you would use and you'd get our team to come on site
01:33and implement and do for you to get you up and running very quickly.
01:37But with Autopilot, we wanted to get it out there as quickly as possible.
01:41So, we made it self-server to turn on, really easy, like one click basically to turn it on.
01:45I think we talked about that in our last podcast.
01:48And we weren't sure if that was going to work.
01:51We thought maybe lenders don't want to do that or they would be scared with AI.
01:55But it's been the opposite.
01:57Almost all of our, we had 50, 60, 70 lenders turn it on in the weeks after the last time
02:02we spoke.
02:03And we've done 50,000 plus loans on Autopilot already.
02:08And, you know, it's really exciting to see so many of our lenders, some of the biggest ones, many of
02:13the biggest ones, and most of the smallest ones start to really lean into it.
02:19You mentioned a couple of things, one click.
02:22I've also heard you talk about customization.
02:25Why is customization critical for AI when it comes to mortgage technology?
02:31Well, every lender has their own idiosyncrasies in how they either serve customers or when they want to ask customers
02:39of certain things or what programs and products they offer.
02:42We have, you know, a large customer who does a lot of VA loans.
02:46And so, they really wanted to make the VA streamline refinance process amazing with AI.
02:51And so, we have out-of-the-box capabilities for that.
02:54And then they can layer on their own overlays.
02:56But it's so important because if the way that AI is serving your business doesn't match how your operations work
03:02behind the scenes, the customer is going to get a really disjointed experience.
03:06And so, we didn't want that.
03:07We made it actually also very easy, to your point, to customize by just writing in plain English the things
03:12that are different about your organization.
03:14And Autopilot picks it up as part of its process and says, hey, I'm not going to ask the customer
03:18for this letter of explanation right now because they just want a pre-approval.
03:21I'm going to do that later because that's what my lender's overlay said.
03:26It's clear that you've had many, many conversations with lenders about what's needed, what adoption looks like, what successful implementation
03:33looks like.
03:35How do you build the partnerships with lenders instead of just delivering a software technology?
03:43Partnerships with lenders, you know, when you're a software company like us, in a vertical that's very concentrated in lending
03:51and mortgage lending, you have to think customer first.
03:55And for us, the way we built partnership over the last almost 15 years, 14 years, has been really caring
04:02about their outcomes.
04:03If they really care about how fast they can serve consumers, we need to care about that.
04:08If they really care about how much it costs them to serve consumers, we need to care about that.
04:11If they really care about recruiting the best loan officers, we need to care about that.
04:15And so the fact that we do actually care about those things and then we show up and when there's
04:21issues, we show up even harder has been, I think, the thing that's led to great relationships for me and
04:27for the team and for the company overall for the last 10, 15 years, but also great outcomes for our
04:32customers.
04:33There's going to be bumps whenever you're looking at implementing a new process, whether it's something as big and potentially
04:40as impactful as AI or it's any other technology.
04:43So I think that that partnership aspect and how you approach that is invaluable.
04:47Yeah, and as part of my job with our customers and our internal team, when the internal team is working
04:53nights and weekends to get this thing going and then our customers are adopting something new and for every one
04:59person that's excited about that innovation, there's one person who's terrified of it because their job is compliance or their
05:05job is actually serving the customers.
05:07And so part of my job with customers is to also serve a little bit as therapists and help them
05:13understand that, you know, we're going to work these things out.
05:17It's going to be okay.
05:19You know, I have to make sure that they understand that we're going to power through it.
05:22And that's also what helps build that partnership you're asking about.
05:25We've seen that AI adoption has accelerated.
05:29I mean, when you look at the past year, six months, three months, several weeks, what lessons have been the
05:38most important as you look at Blend's intention at driving meaningful change?
05:46Whenever we're trying to do something new at Blend, we start very close to the customer.
05:52And so the biggest, I think the reason Autopilot has been so successful so far doing 50,000 loans and
05:58making real meaningful impact to our customers' operations is we're just so close to the customer.
06:04We have meetings with every Autopilot customer every week.
06:08We're talking to them.
06:10The team is understanding them.
06:11We have a team that's dedicated 100% to it.
06:14It's not a part-time job for those people.
06:16And so that's the way that we're approaching this, just like almost like another startup within what I still consider
06:23a startup in Blend and making it so that that team has access to all the right things and all
06:30the right customers so they can make the best product.
06:32And we're all open-minded because AI is changing around us.
06:35One of the nice things about AI is that it's allowing us to treat the, you know, one thing I
06:40said in our last earnings call is that the output of code from our team has three X per person.
06:47Since January.
06:49When you can do that, anything is fair game.
06:53Everything, nothing that we've done in the past matters.
06:55The sunk cost, everything can be the future.
06:57And so I'm very excited about that.
06:58And the lenders have been great partners in helping us build that vision.
07:02That is incredibly exciting.
07:05I mean, even hearing about how hyper-focused your team is as they approach new things is amazing.
07:10Now, saying that, we have to go back to a word that you mentioned earlier, compliance, for a second.
07:16How do you balance innovation with compliance, security, and most importantly, customer trust?
07:24Well, compliance is paramount in an industry like this.
07:28And there's a lot of guidelines.
07:30There's a lot of regulation.
07:32And the nice thing is when there's lots of rules, if you can delineate those things to AI, AI can
07:39actually follow those rules for you.
07:42So I think part of it is AI will actually, over time, be better at checking and double-checking our
07:48work as humans and even its own work as AI.
07:52But in the meantime, one of the nice things about the foundation we're building on, we're not building on a
07:56blank foundation.
07:57And Blend's system has had a compliance foundation around RESPA, around ECOA, around all the words, all the acronyms that
08:05we're all familiar with as an industry, which we have too many of those acronyms.
08:09Too many.
08:09Way too many of those acronyms.
08:12It's already built with those things in mind.
08:14So if the AI helps a loan officer pull credit, ECOA automatically kicks in.
08:19The AI doesn't have to know about it.
08:21We're built on a really strong foundation at Blend.
08:23And so not only do we think it's going to be a good starting point, which it has been, but
08:28it's going to get better over time as AI gets better.
08:30So that's already built into the core way that you operate.
08:33It's built into the core way that our system runs.
08:35So our system can't, when trade is triggered, we can't not start that three-day clock.
08:40When credit is pulled, we can't not start that ECOA trigger.
08:43And then there's a privacy aspect as well, where a lot of our lenders are concerned about how do you
08:50make sure that the consumer's financial information doesn't get used to train AI in the future?
08:56Because it shouldn't be.
08:57And so that just takes good architecture and good engineering.
09:00And thankfully, that's something that I think we're maybe the best in the world at.
09:04Fantastic.
09:05Now, a hard question.
09:07What excites you the most about the future of AI in mortgage?
09:12Well, we pulled some early stats for Autopilot and we're about 19% higher conversion for consumers who go through
09:20an Autopilot process because Autopilot is underwriting people in real time.
09:25So when I said reimagine the industry to start the session, what I meant was in any other product, when
09:32you're applying for a car loan or a credit card, you're getting approved in real time.
09:36If there are things that are needed of you, they're asked of you in real time, and then that leads
09:40to an approval.
09:41And mortgage is different because we have so many guidelines, so many documents to look through.
09:46And now, for the first time ever, we can approve that consumer in real time.
09:50And so when I think of a world where that 18.8% better conversion we're getting because consumers are
09:57getting the approval in real time and the cycle time reduction of already three days from just three months of
10:03Autopilot rollout, we're just getting started and there's already meaningful impact.
10:08And I can see forward, you know, in my head, imagining a world where in five years consumers are going
10:16through, they're getting invited by the loan officer or they're applying online and they're going through and they're getting fully
10:20approved, clear to close in the first five, 10 minutes of working with the lender.
10:25And for a consumer who's probably making the scariest, most important purchase of their life, wanting to know that they're
10:33approved or knowing that they're approved is so important, making that as easy as possible.
10:37I think it's going to open up accessibility to consumers, just awareness when it becomes easier, when you can ask
10:44ChatGPT, hey, help me get approved for a mortgage.
10:46It can appoint you to a lender who can approve you in real time.
10:51It's going to, I think it's going to dramatically change how consumers even engage with this industry in a very
10:56positive way.
10:57I can't wait to see what's next.
10:59Congratulations on a successful rollout of Autopilot.
11:02You've moved so quickly up and I can't wait to see what you build next.
11:07Yeah, thank you for having me.
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