US lenders Rocket Mortgage, United Wholesale Mortgage and Better.com are deploying artificial intelligence to compress refinancing timelines from weeks to a few minutes. Rocket Mortgage has invested over $500 million over six years in these technologies. According to Morgan Stanley strategists, AI-driven efficiency could push refinance participation rates from roughly 33% to around 60% of eligible borrowers during a rate dip, potentially representing $2.1 trillion in market activity if rates reach 5.5%. The mortgage-backed securities market, sized at approximately $9 trillion, could require a spread adjustment of 10 to 20 basis points, with investors facing faster prepayments that reduce duration and force reinvestment at lower yields.
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