Black Knight Inc., a Jacksonville-based firm with a $1 billion in annual sales analyzing mortgages for large banks, says it has agreed to purchase HeavyWater, a University City Science Center-based, two-year-old firm that is developing AIVA (“Ava,”) an “artificial intelligence and machine learning” mortgage lending system to speed loan approvals, from founder Soofi Safavi. Safavi will remain in charge of the 14-person group, which he said plans to hire 5 more people by June 19. The price wasn’t disclosed.
Black Knight said in a statement that it will use and improve AIVA — the Artificial Intelligence Virtual Assistant — to “read, comprehend and draw conclusions based on context to mimic cognitive thinking and build expertise,” and that it will also make the technology available to clients as a way to speed mortgage approvals and boost accuracy in verifying income, assets and insurance coverage.
“Artificial intelligence, machine learning and neural network solutions are the future,” and Heavy Water will help make that happen for Black Knight clients, said that company’s CEO, Anthony Jabbour, in a statement.
Safavi served as chief technology officer at Radian, the Philadelphia mortgage insurer, before starting HeavyWater in September of 2015. Before that he was a boss at JPMorgan Chase’s mortgage division in Edison, N.J., and at the former Advanta Corp., Horsham.
Working for big companies, “I implemented more than $2 billion in IT projects in my career. And I was dissatisfied with the outcome of these investments and the improvements,” Safavi told me.
“There was a lack of innovation. The costs of origination have been going up,” since federal lending laws tightened in 2010, despite all the money lenders are spending on new technology and people. “It cost about $2,500 [to originate a mortgage] in 2007, it must be around $8,500 today. That is why you have seen such a consolidation [mergers] by the lenders. The technology they are buying does not help them fight the complexity that has been created since the meltdown. They fight that by adding more people. And that costs a lot of money.
“You visit these companies, you feel like you are in an old movie. You come out of work, and life is now a totally different experience. In the next generation nobody will come to their office — in their new self-driving cars — and stare for hours and compare mortgage applications.
“That’s why we we are building AIVA as a personal assistant and teaching her to become a mortgage expert and create an alternative workforce for the mortgage companies to offload some of these mundane tasks and redirect humans to tasks that that require creativity and empathy and other human” characteristics, Safavi added.
AIVA is working with lenders “to look at bank statements and project your asset positions; to look at pay stubs and calculate your disposable income; to look at your appraisal and see if it’s a relative comparable structure,” Safavi says. “Our goal is to make her a mortgage expert.”
He added, “Right now she’s a very junior mortgage processor.” Once AIVA is perfected for mortgages, the system “can be taught different domains and have the same impact of implementations in other industries.”