Two weeks ago, you wrote an article titled Will AI Replace Me? When I read it,
I was still employed. Well, it's two weeks later, and I have been fired and
replaced by an AI bot. I am still in shock. I really did not think my job was
in jeopardy. Other people in my company were also fired and replaced by AI
bots.
Yours is the only compliance firm I have come
across that explains the positives and negatives of artificial intelligence. I
guess, for me, it is a big negative. I have been in the mortgage world for over
twenty years. My main positions were in underwriting, processing, and closing.
I have looked around for work, and nobody's hiring. I'll bet those positions
are now using AI bots.
I don't know what to do next. I'm only
forty-five. I have limited savings and a small family. I feel like I'm getting
squeezed out of the mortgage industry. A group of us met with our company's
COO, and she said the company is moving rapidly toward AI across its
origination process. So, it looks like I'm heading for a dead end. It feels
like I'm being thrown on a trash heap.
What is happening with these AI bots?
Is it Us (the humans) against Them (the AI bots)?
Signed,
Jobless
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RESPONSE TO YOUR QUESTION
This is a scary time as the world embarks on
this new era of AI technology. Unfortunately, unemployment will increase as AI
replaces human workers. The change will not be one-for-one. In some cases, it
will be far worse, as one AI bot can replace hundreds of humans on a task,
especially in loan processing, underwriting, and other operational roles. I'm
going to be brutally honest with you: underwriters are among the more commonly
cited "at risk" roles in mortgage banking.
WILL AI REPLACE YOU
In the March 19th article you cited, Will AI Replace Me?, the concern expressed was from a loan officer. However, I stated the following AI automations that, as implemented, would adversely affect the need for humans, as follows:
· AI underwriting engines can now complete the entire initial underwriting process autonomously, approving loans days faster than traditional methods. This process is probably the clearest current example of loan origination being removed entirely from human hands.
· Unfortunately, loan processors, underwriting assistants, compliance analysts, escrow coordinators, closing personnel, and data entry clerks are at the intersection I described above, where humans and mimicking humans reside.
In the March 25th article, Will AI Reduce Fair Lending Violations?, I noted, in pertinent part, that "AI can streamline underwriting, reduce operational costs, and identify creditworthy applicants that traditional credit scoring methods might overlook."
SYSTEMIC CHANGE
The transition is systemic, not particularized to just your company, loan products and services, region, or institutional type. From point of sale to securitization, AI is quickly becoming embedded. AI is already doing a lot of what junior underwriters used to do. And, as you know, Fannie Mae's Desktop Underwriter and similar automated systems have been handling straightforward loan approvals for years. That trend is accelerating due to artificial intelligence.
Underwriting job offerings will shrink over the next decade. I have no idea how long it will take to shake out. But some roles won't disappear, especially those that require experience handling complex, judgment-intensive tasks. Underwriters who thrive will be the ones who handle the hard files AI can't crack, or who move into roles like reviewing and overriding AI decisions, managing risk models, or working in more relationship-driven lending environments.
THE MOST AT-RISK JOBS
In my estimation, three types of mortgage-related jobs are most at risk of being replaced by AI. These are:
· Routine, clean-file underwriting (such as W-2 borrowers, standard loans, and clear credit profiles).
o AI is demonstrating growing consistency in handling this well and more rapidly. AI can learn in real time and continuously reconfigure its search and operational functions.
· Volume-based roles where the job is mainly checking boxes and running numbers.
o Please do not construe this as meaning that your human job is mindless work. But you have to face up to the fact that AI can penetrate many such human methodologies.
· Entry-level positions, which are already shrinking at many lenders.
o We have clients who hate that they can no longer offer entry-level positions to potential hires because AI tools and bots are filling them. They feel they have no choice.
So, let me be clear, you and others are definitely at risk of losing your jobs due to AI!
The threat is real, but it is not
imminent doom. It's more of a slow squeeze. The underwriters who make the
transition will probably be genuinely hard to replace.
DO YOU HAVE A
FUTURE ROLE?
You may have a future in mortgage origination and servicing if you take the time to consider some of the areas that, as of this writing, cannot be easily replaced by AI. For instance, we are finding that activities that require experience and genuine professional judgement are where AI still falls behind. Complex files are not currently a major strength of AI. Examples that come to mind include self-employed borrowers, non-QM loans, unusual income structures, foreign nationals, and business owners. My guess is that the reason AI is struggling with complex files is that pattern recognition is not yet able to adequately evaluate some of the nuances, subtleties, and distinctions associated with these types of loan files.
Second reviews would be another area that requires human involvement. If AI were to check AI itself, that would be like the conundrum of the checker checking the checker. Juvenal, the Roman poet, asked Quis custodiet ipsos custodes?, or Who Watches the Watchers? When something doesn't fit the AI model, a human still needs to make the call!
Interposing
humans into the AI system's process flow is still needed. If you recall, in the article Will AI Reduce Fair Lending Violations?, I
provided a table that outlines human involvement. Though I drafted it for fair
lending purposes, it is equally important to apply it to human interposition in
other operational frameworks. I have published it again here.
|
Role |
Human or
AI? |
|
Policy design
& compliance strategy |
Human |
|
Pattern
detection & disparate impact testing |
AI-assisted |
|
Individual
credit decisions |
AI with human
oversight |
|
Adverse
action explanation |
Human-reviewable
AI |
|
Regulatory
response & accountability |
Human |
Please note that of the five operational areas listed in the table, four of them require human involvement.
ARE YOU AT THE INTERSECTION?
It is at this intersection between human and AI that regulatory accountability is needed, as someone must sign off and be legally responsible. As I have mentioned previously, a lender cannot escape liability for compliance failures simply by blaming an AI model or claiming that an "algorithm made the decision". The "devil made me do it" defense is null and void!
Ultimately, this means that lenders and servicers still value – indeed, must value! – human judgment and borrower relationships. There may be a place for you in that future.
To help you decide, I want you to ask yourself these questions:
· Do you specialize in complex loan types (such as self-employed, jumbo, commercial)?
· Could you move toward credit risk, loan review, or compliance, that is, adjacent roles with longer-term viability?
· Are you with, or looking for, a lender where human judgment is still a selling point?
· How adaptable are you to transformative information processing, such as AI?
· Do you have experience that lends itself to using AI as a tool?
· Does your role involve experience, knowledge, and expertise that AI can't easily replicate?
I hope you find a place in the new era of AI in mortgage banking.
I wish you much good luck!
This article, AI Replaced Me, published on April 1, 2026, is authored by Jonathan Foxx, PhD, MBA, the Chairman & Managing Director of Lenders Compliance Group, founded in 2006, the first and only full-service, mortgage risk management firm in the United States, specializing exclusively in residential mortgage compliance.
