Brendan Palfreyman, leader of the firm’s Artificial Intelligence Industry Team, recently wrote a Law360.com article focused on artificial intelligence in the mortgage lending business.

Brendan pointed out artificial intelligence and machine learning are no longer experimental tools in residential mortgage lending, but embedded across the loan life cycle, from borrower intake and underwriting to pricing, quality control, servicing, fraud detection and loss mitigation.

“Fannie Mae and Freddie Mac have released concrete governance requirements that directly condition a lender’s ability to sell loans into the secondary market,” he wrote. “For mortgage lenders and servicers, including nonbank lenders, compliance with Fannie Mae and Freddie Mac requirements is foundational.”

The governance requirements represent a material shift in compliance expectations, he said, extending well beyond traditional underwriting models and into nearly every technology-enabled function that touches a mortgage loan.

“At a minimum, lenders must maintain written policies and procedures that address the full life cycle of AI and ML systems, including development, implementation, use, maintenance and retirement,” he wrote, then detailing what those policies should cover, how they should be communicated and to whom, and how often they should be reviewed and updated.

“Lenders that focus now on compliant, proportionate AI governance will be better positioned not only to maintain Fannie Mae and Freddie Mac eligibility, but also to deploy AI responsibly in a market where trust, fairness and auditability are critical,” he concluded.

Read the full article to see everything Brendan wrote on the subject.