The mortgage industry’s rush toward the adoption and use of artificial intelligence could risk the acceleration of inefficient processes unless lenders first modernize the underlying infrastructure powering loan origination and securitization.
That’s according to Figure Technology Solutions CEO Michael Tannenbaum, who spoke to HousingWire President Diego Sanchez at The Gathering in Austin on Wednesday. Tannenbaum argued that blockchain technology, rather than AI alone, will play a central role in reducing fraud, lowering costs and speeding up mortgage transactions.
“AI is going to make lending faster,” Tannenbaum said. “But if you just digitize a bad process, you don’t necessarily do anything. You’re compounding it faster and faster. … Use this phrase, ‘You can’t AI your way into Triple A [securitization ratings].'”
Tannenbaum said Figure’s platform differs from competitors by using blockchain technology to verify loan data and place it on an immutable ledger. That verified data, he said, supports a broader marketplace that includes securitization activity and more than 300 lending partners.
The company has focused much of its growth on home equity lending. Tannenbaum said Figure originated nearly $1.2 billion in volume in March, marking the company’s largest month on record and representing roughly 100% year-over-year growth.
He contrasted Figure’s approach with recent “crypto mortgage” products that allow borrowers to use cryptocurrency holdings such as Bitcoin or Ethereum as qualifying assets without liquidating them.
“That’s a niche solution to a real problem,” Tannenbaum said. “What we’re doing is a systematic solution, whereas I would call the crypto mortgage a point solution or a workaround.”
Tannenbaum explained that Figure positions itself as an alternative infrastructure provider for lenders, comparing the company’s role to that of government-sponsored enterprises Fannie Mae and Freddie Mac. He said lenders use Figure’s origination platform and capital markets network while continuing to originate loans under their own brands.
Of Figure’s 300 partners, Tannenbaum told the audience that 204 of them accounted for roughly 32% of all home equity growth between 2022 and 2025, citing Home Mortgage Disclosure Act data as his source. He added that 93 partners that previously had no home equity business are now originating more than $1 million per month through Figure’s platform.
The company’s blockchain-based registry technology, known as DART (which stands for Digital Asset Registry Technology), functions similarly to the mortgage industry’s existing loan registration systems, he said. But it automates ownership updates and helps prevent fraud such as “double pledging,” where the same loan collateral is pledged multiple times.
Tannenbaum said blockchain-based verification could have mitigated some of the issues that contributed to the 2008 financial crisis, particularly around faulty or misrepresented loan data.
“I don’t think blockchain prevents a crisis,” he said. “But the liar-loan issues we saw during that period could have been prevented.”
As lenders weigh long-term technology investments amid rapid advances in AI, Tannenbaum urged mortgage companies to focus on infrastructure capable of supporting future capital markets.
“The pace of AI is so rapid, it’s hard to plan for six months,” he said. “If I were sitting here writing a 10-year check, I’d be thinking, ‘Do I want to be part of the future and get on board today, or am I going to be playing catch-up down the line?’”