June 29: AI primer; fire retardant system to help insurance woes? Saturday Spotlight: MoneyThumb fraud prevention

I know that this is a Commentary on mortgages, but plenty of lenders eat out, stay in hotels, and have office space. There was once a time when you had to call a restaurant on the phone to book a reservation. You might spend five minutes going through the whole process only to be told no tables were available. The internet and apps like Resy made all of this much simpler. Then the bots came (excuse the language). And there went obtaining a restaurant reservation in New York. Oh, and if you want a hotel room in Manhattan, good luck: NYC hotel rooms are averaging over $300 a night as many hotels exclusively house migrants, reducing supply during a tourism boom. If you want something that is going down in price, try office space. A new report projects that U.S. office vacancy rates could peak at 24 percent in 2026 as remote work settles in to a steady state and enough leases come up that companies bail on an expensive physical presence. Last quarter, office vacancies hit a high of 19.8 percent, a new record, and remote office work is reducing the need for office space by an estimated 14 percent. I don’t know if the prices of lenders is going up or down, but earlier this week the podcast had an interesting interview with American Pacific’s Bill Lowman about evaluating mergers and keeping the culture of the acquired company.

Saturday Spotlight: Moneythumb.com

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“Digitize documents and detect fraud in seconds.”

In 3-5 sentences, describe your company.

MoneyThumb provides easy-to-use financial file converting and analysis tools to help lenders streamline their loan analysis, speed up their underwriting, and enhance fraud prevention, helping them underwrite loan applications faster and more confidently.

We were founded in 2015 to address the lack of automation in reading PDF bank statements to generate intelligent data. The first products were for accountants and bookkeepers, and broadened to include business lenders, consumer lenders, mortgage lenders, and banks with the launch of our PDF Insights bank analysis tool in 2017 . Our powerful fraud detection tool, Thumbprint® was launched in 2020 to help clients combat loan application fraud, and to further enhance our data security, MoneyThumb achieved SOC 2 compliance approval in 2021.

We continuously enhance our products and features to ensure we are delivering the best product with the highest degree of security and accuracy for our clients.

What does your company do to help elevate your employees’ growth? Describe any mentoring programs, outside classes or training, in-house training. How does the company help people develop?

As a company in the technology sector, MoneyThumb is fully aware that technology is advancing more quickly than ever before, not just creating an opportunity for learning but making it a necessity. Whether it is a particular technology that is changing or an employee’s job requirements that are evolving, MoneyThumb monitors individual growth and development needs and makes training available through outside classes and workshops.

Our culture is one that embraces innovation and encourages employees to, in turn, embrace new technologies, value experimentation, and seek opportunities for continuous development. In addition to company-mandated training, as part of our professional development program, employees are eligible to request reimbursement for any continuous learning opportunities they pursue on their own such as training programs, seminars, conferences, online classes, etc. Under our professional development policy, employees are encouraged to seek new learning opportunities while it is a manager’s responsibility to coach their team and identify employee development needs. Human Resources is responsible for overseeing all professional development needs, activities, and processes.

Tell us how your company maintains its culture in a work-from-home environment, or how you plan on bringing employees back into the office, if applicable.

MoneyThumb has a very robust Slack community where everyone greets each other every morning to start the day. We also have a channel for employees to share stories, random thoughts, wins, celebrations, and other information they wish to share with their team members. We are a remote company and have been able to maintain our close-knit culture through Slack and regular check-ins via Zoom.

We have a truly flexible schedule that allows our employees to work in different time zones and hours to maximize their personal time. In fact, it is not uncommon for our employees to take extended vacations out of the country. As long as they get their work done, we allow them to work their own schedules wherever they happen to be. Our culture is based on output, not time spent “in the office.” This philosophy is in part why we have such high employee engagement and tenure.

In addition, we make sure to celebrate and welcome every new hire with an interview conducted by our head of HR who has a knack for asking some very interesting questions that give the company a great picture of who their new co-worker is.

Things you are most proud of that don’t have to do with sales.

We’ve bootstrapped our company from the ground up, from nothing to what it is now – a successful, client- and employee-centric, profitable company with 34K happy clients.

We make sure that our clients are taken care of and that we are responsive to their questions and ideas. When our clients ask for new features or enhancements, we prioritize those requests and implement them with remarkable speed. Our clients are happy with us because we listen to their feedback and do everything in our power to make our product better for them. Our employees and prospective employees love us because we treat them like adults and give them a lot of autonomy. Our vendors love us because we are easy to work with and we pay our invoices promptly.

Fun fact about your company.

The original concept of reading PDF statements came from a customer suggestion. Our founder thought it was a great idea, and he went to work bringing the idea to reality.

Another fun fact is that we have exceptional employee retention which is over 95 percent. We do everything we can to make sure that our employees are happy and thrive in their jobs.

(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)

Insurance solution in fire prone areas?

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I continue to write about homeowner’s insurance in the Commentary, whether it is the cost increasing or insurance carriers pulling out of states entirely. I received this question: “Rob, have you heard of any potential help for homeowners, servicers, builders, or insurance companies in dealing with fire risk?” The mortgage servicers are not the target as they are in the business of making sure insurance is in place already. And builders might benefit from something since it should lower the cost of insurance making homes more affordable.

There is a product that I know of that provides eco-friendly fire-retardant products and home treatment services to the fire prevention industry as well as direct sales to homeowners, and that works with home insurance companies as well as the U.S. Government. So, for an answer to a product that may reduce fire risk I turned to Francis Garcia, and no, this is not a paid ad.

“Acreage burned by wildfire has doubled over the past ten years when compared to the prior ten (NIRC). As a result, home insurance providers have continued to increase rates, cancel policies, and simply exit high fire risk areas. The implications for homeowners, lenders, real estate agents, and others are well-documented. Nonprofit First Street Foundation found that a home worth $300,000 whose annual insurance premium rose from $1,400 to $3,200, which the report says is the average cost of the FAIR Plan, the state-created wildfire insurer of last resort, could lose about 12 percent of its value. At the same time, the increase in expense has stopped some homebuyers from securing a loan.

“Your readers should know that insurance providers are not necessarily the bad guys here, and no single technology will ever provide a silver bullet. The good news, however, is that promising new technology is already here, and continuously improving. Shawn Sahbari, CEO and Founder of Komodo Fire Systems in Northern California describes Komodo as a technology company with ‘an unrelenting commitment to the environment, health, and safety.’ Komodo has designed a modern fire retardant and suppressant that is only one of three products certified by US Forest Service and USDA for land application. Komodo is water & plant based, safe for people, plants, pets, wildlife, and aquatic life. The proprietary formula employed by Komodo is a game-changer that is methodically increasing market penetration by developing an ecosystem of innovative fire technologies that provide everything from multi-acreage to individual personal fire protection; These systems enable, or will enable the application of the breakthrough Komodo ‘juice’ at the right time and place, guided by AI, telemetry, intelligent sensors, and other state-of-the-art technology.

“FireReady911 sits in the yard, looking like a covered BBQ, but when a fire threatens, the homeowner goes into action. Ditching the useless garden hose, coating home vegetation and structure with Komodo while not depleting the water reserve needed by firefighters. Mobile indoor/outdoor automated cannons detect a small ignition and immediately fire a liquid Komodo laser, gradually widening the spray if the fire expands, as other cannons join the fight when needed.

“Tethered Towers drench geographies and structures of any size, after detecting the oncoming fire and receiving critical real-time fire metrics. Think Lahaina or large HOA’s completely drenched after evacuation, but before the fire in a highly synchronized manner. Would it have saved the beautiful landmark? Right now, we only know it would have helped. Perimeter and vegetation pre-treatment of wineries and corporate assets coupled with mandatory pre-treatment of critical pre-determined evacuation routes will save properties and lives.

“Arming our firefighter heroes with a Komodo Renegade extinguisher that they have deserved for decades. 20x more effective than water, non-toxic, non-carcinogenic, non-corrosive…

Humans cause as many as 85 percent of wildfires, that’s why Komodo 911 was developed as the only federally certified SAFE mini fire extinguisher that can be inconspicuously placed throughout a home or structure so anyone of any age can stop a small fire ignition in seconds. For a week in April, Komodo hosted ASTM, the regulation body for unmanned drones. The conference hosted over 100 attendees including NASA, US Navy, DoD, representatives from 15 countries and Komodo customer PG&E. Drones for firefighting are here, only awaiting the official rules of engagement.

“Stuart Mitchell, Wildfire Mitigation Expert, advises his customers in the WUI (wildland Urban Interface) to take a more active role in preparing their home for the worst. Beyond “home hardening” and “defensible space” Stuart recommends homeowners use the sophisticated but simple “Watch Duty” app to track fires real time. For wildfires that appear imminent, homeowners can be prepared to create a perimeter barrier and coat and protect their home prior to evacuation with Komodo’s FireReady911 system.

“LADRIS, an AI software company focused on climate risk, and partner to Komodo, collaborates with local governments, firefighting entities and others, enabling them to inform emergency response and fire mitigation strategies. The wealth of information they gather ahead of a fire can be staggering, and according to Retired Fire Chief Harold Schapelhouman, LADRIS has harnessed and simplified their UI making it one of the most useful fire mitigation technologies available. LADRIS represents another State-of-the-Art fire mitigation tool that needs to be recognized by the insurance and firefighting industries for its merits.

Even the best, most innovative new fire mitigation technologies will struggle to penetrate and bring change to a firefighting industry with hundreds of years of entrenched protocols and loyalties. As they say, ‘the firefighting industry is over 200 years old, unimpeded by progress.’ These institutionalized barriers-to-entry have influenced Komodo to successfully re-focus its limited resources on developing solutions for governmental agencies and departments that are more receptive to change and progress. Therein lies the rub however, implementing these technologies with homeowners in the WUI, so that insurance underwriting models can account for their mitigation benefits, simply presents more entrenched hurdles than other opportunities.

A small tech company forging a new path in this environment requires the collaboration of more powerful vested interests who are truly committed to making hard fought change that will help address the wildfire challenges faced by the real estate, mortgage and insurance industries. This will require a concerted effort by leadership in these industries to activate new technologies that will be recognized by insurance providers as beneficial and effective…or, of course, we can wait on the government to ‘save the day!’ (If you have questions, reach out to Francis Garcia.)

AI primer

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Brooke Anderson-Tompkins, Founder & CEO of bridgeAIvisory, addresses the confusion about Artificial Intelligence (AI), Machine Learning, ChatGPT, and the topic in general. “People should know that the words used in definitions often reference another word that we may need to understand. I can personally attest that it does make more sense the more time you spend with it.

“Artificial Intelligence (AI) is the capability of a computer system to mimic human like cognitive functions such as learning and problem solving. (Microsoft) It is a branch of computer science that aims to create machines or programs that can think and learn on their own, without human intervention. There are many subsets of AI – machine learning, natural language processing (NLP), expert systems are a few examples.

“Machine Learning is a subset of AI in which a model gains capabilities after it is trained on, or shown, many example data points. Machine Learning algorithms detect patterns and learn how to make predictions and recommendations by processing data and experiences, rather than by receiving explicit programming instructions. The algorithms also adapt and can become more effective in response to new data and experiences. (MIT)

“Generative AI is AI that is typically built using foundation models and has the capabilities that earlier AI did not have, such as the ability to generate content. (MIT)

Foundation Models are deep learning models trained on vast quantities of unstructured, unlabeled data that can be used for a wide range of tasks out of the box or adapted to specific tasks through fine-tuning. (MIT) (GPT 4 is an example.)

“Large Language Model (LLM) make up a class of foundation models that can process massive amounts of unstructured text and learn relationships between words or portions of words, known as tokens. This enables LLM’s to general natural language text, performing tasks such as summarization or knowledge extraction. GPT-4 (which underlies ChatGPT) is an example of an LLM.

“Automation refers to the use of systems or machines to perform tasks that would otherwise require human intervention. It’s about streamlining and making processes more efficient. Examples of automation include assembly lines in factories or scheduling software that sends out reminders for appointments.”

So, artificial intelligence is the ability of a machine to imitate intelligent human behavior. Machine learning is the application of AI that allows a system to automatically learn and improve from experience. And Deep Learning is an application of Machine Learning that uses complex algorithms and deep neural nets to train a model. While AI might be used in some forms of automation, it is important for users to know the different concepts with some overlap in their applications.

Okay, this is amusing: “Hiring a Babysitter to Run My Chinese Sweatshop.”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is titled, “Catastrophe and Climate Risk Is Only Increasing”. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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