Mortgage AI needs trust framework built on experience

• AZP Insurance Specialists has placed representation-and-warranty insurance on over 5 million mortgage loans totaling more than $2 trillion.
• AZP's AI Mortgage Technology Certification framework evaluates AI governance, security, controls, auditability, operational maturity, and risk management.
• Gateless achieved the highest Platinum certification level with a score of 97.8 out of 100.
• Gateless's Smart Underwrite and VeriClear technologies were assessed across 11 categories.
• Gateless received high scores in operational controls (99), AI governance (99), information security (98), and performance analytics (98).
• Lenders have used Gateless's Smart Underwrite to originate and sell over 230,000 loans without a single claim.

AZP Insurance Specialists has introduced a framework to certify AI mortgage technology, aiming to establish a standard of trust and accountability for lenders adopting these tools. Drawing on nearly four decades of experience in mortgage risk and claims, AZP's framework evaluates AI governance, security, controls, auditability, operational maturity, and risk management.

The mortgage industry has faced repeated challenges in managing risk from loan origination to sale, particularly highlighted during the 2006 housing market downturn and the subsequent financial crisis. These events underscored the importance of robust underwriting, documentation, and risk assumptions, as well as the need for responsible parties to meet their obligations.

In response to evolving market demands and technological advancements, AZP's framework provides a structured approach for lenders to assess AI providers. It allows for consistent questioning and evidence-based evaluation, which is crucial as AI capabilities advance rapidly.

Gateless was the first company to achieve the highest Platinum certification level, scoring 97.8 out of a possible 95 points. Its Smart Underwrite and VeriClear technologies were assessed across 11 categories, with Gateless demonstrating particular strength in operational controls, AI governance, information security, and performance analytics. The company's track record, including over 230,000 loans originated and sold using its Smart Underwrite without a single claim, contributed to its high score.

This certification is complemented by AZP's representation-and-warranty insurance program, provided through a Lloyd's of London policy underwritten by Munich Re. This combination aims to offer lenders both independently assessed performance data and financial protection against covered losses.