As seniors gain comfort with AI, how should reverse mortgage lenders respond?

The knowledge and use of artificial intelligence (AI) among older generations is often misunderstood and mischaracterized. But seniors are often following the path of the wider population when it comes to incorporating AI into their daily lives.

Recent survey data published by the University of Michigan found that 55% of respondents in the 50-and-older age bracket have used voice- or text-based AI technologies. Roughly one in seven people surveyed use these tools to receive health information or build social connections. And more than 90% who use AI for smart-home and security purposes say the technology is helping them to age in place safely and independently.

The Washington Post explored the topic this week in an article titled, “How America’s seniors are confronting the dizzying world of AI.” The outlet focused on a senior center in Maryland where classes are being offered on a variety of AI subject matter.

“For some older adults, chatbots have become convenient assistants for making travel plans or writing letters and books,” the report explained. “But AI has also upped the potency of scams and misinformation that already target older Americans. They are encountering AI-generated content as it pervades platforms like Facebook and YouTube.”

Seniors may be more insulated from AI-driven scams than some perceive, according to survey data released earlier this year by HomeEquity Bank, the leading reverse mortgage lender in Canada.

But the Post noted that they’re not immune as “fraudsters have used AI tools to fake the voices of family members and real estate agents to scam victims out of thousands of dollars. The technology has also made it easier for criminals to mine the internet for personal information to better target their marks.”

One Maryland senior who spoke to the outlet said she’s been using technology for decades and upgrades her devices as needed. But AI has grabbed her attention due to its sudden and pervasive emergence.

“It feels a little overwhelming, truthfully,” she said. “And that’s why I decided to take this class.”

One of the classes being offered at the senior center was a tutorial on spotting the differences between real and AI-generated images. Others have focused on communicating with tools like ChatGPT and avoiding “unoriginal and predictable” language in AI-generated writing.

How reverse mortgage lenders are meeting this opportunity

The implications of AI for the reverse mortgage industry are still being debated. But lenders that are able to provide these tools to clients in a thoughtful, purpose-driven manner are poised to gain a leg up.

Bill Packer, chief operating officer at Longbridge Financial, told HousingWire’s Reverse Mortgage Daily in June that tailored AI systems for use among seniors will help lenders overcome perceptions of institutional bias. Among other examples, Packer mentioned that AI could offer a “less ageist” approach to appraisal reviews.

“Do I trust a model that unemotionally is looking at house-price appreciation, or the history of the property, the comps that were being used versus other comps?” he asked. “Do I trust that as being less biased than a human being who’s bringing their own thoughts, expectations and experience to the table?”

Andy Peach, chief lending officer for Onity Group — the parent company of PHH Mortgage Corp. and Liberty Reverse Mortgage — gave an interview earlier this year in which Onity’s investments in AI took center stage. In February, the company launched LASI, an AI tool for text queries and data extraction.

“It allows clients to search documents and ask unstructured questions about their portfolios,” he said. “It makes it easier for them to oversee the loans we service.”

Last week, at HousingWire’s AI Summit in Dallas, mortgage compliance expert Wendy Lee dove into the use of AI for risk management. She explored a law in Colorado that will regulate the development and deployment of AI systems there.

The Colorado law is expected to set a precedent for other states, Lee said, and consumer privacy protection rights are just one piece of the puzzle to consider.

“Risk assessment in the AI era is fundamentally different from the pre-AI environment,” she said.