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Freddie Mac’s Loretta Ibanez: Innovating and Learning in a Fast-Fail Environment

Loretta Ibanez

Freddie Mac's Loretta Ibanez

In your job as Mortgage Innovation Director, what does a typical day look like?

We have always done innovation at Freddie Mac, but we’re making big investments and improving our Loan Advisor Suite for our customers. Beyond just the sourcing side, now we also need to turn our attention to reimagining the servicing side. We need to look at other technologies. We want to innovate and learn in a fast-fail environment.

We're bringing all the lean-design thinking and agile methodologies to work in the lab. A typical day starts with an early morning stand-up session with the whole lab, and then we go to anything from a challenge session on down payment assistance to sprint planning for servicing initiatives to working in my space. I'm working with vendors on artificial intelligence technology, collaborating with my IT partners, and also cloud strategy. I'm working on getting us to the cloud.

There are many issues regarding how do you do that safely and how do we protect all of these borrowers’ privacy. We cannot break the public trust. We have to go to the cloud because of the speed and scalability that's available, but you cannot do it in a way that's going to compromise privacy. We are working hard to figure out how to leverage all the new technology to improve the customer experience, to make it cheaper and faster for our customers to originate and service loans and still do it safely.

What are some of the most challenging issues when it comes to trying to move things to the cloud, other than the privacy side of things?

We're talking about an industry where, in all 50 states and at the county level, the real estate and lending laws can be different, and the foreclosure laws. Things are done on different forms. The data is not standardized, so bringing all these fantastic, wonderful technologies and tools to a very non-standardized process is going to be a challenge.

There are now tools moving in the direction of the democratization of artificial intelligence, and there’s been a lot of progress in that area. There’s been a lot less progress in figuring out how to integrate all these disparate data sources in a meaningful way so you're not just getting noise out of the AI. You want to actually find signals in the data that you can do something with.

What are some of the other technologies that you're seeing that you think are poised to really have a big impact on the industry?

I am a big believer that technology is fantastic and it can change people's lives, but you need to know what problem you're trying to solve. It starts right there. What problem are you trying to solve, and we need to be crystal clear about that.

At Freddie Mac, we want to drive down our customer's costs. We want to help them do that. We want to help them shorten the amount of time it takes to originate and service loans, and we want to take the friction out of the process.

We have been told that entities like the Gates Foundation have funded a company to use blockchain and distributed ledger technology for medical records. They’re doing these things. It works. The question is, how do you make it work at scale, how do you make it perform, how do you do it affordably, and oh, by the way, how do you do it in an ecosystem where everything has to network and talk together?

So, distributed ledger and blockchain is one thing. It's not just an application for cryptocurrency. I think there are tremendous ways [blockchain] could be used in sourcing, servicing and nonperforming loans across the value chain.

Robotic process automationthink of all the manual handoffs where there's a person sitting in between two systems. There are huge opportunities there, and this not even disruptive technology. That's system-to-system automation.

I love the machine learning applications. That's sort of from my background because I started as a finance person, but I really am just blown away by what we can do with the machine learning. It's just amazing.

What do you wish more people understood about your job?

People come to Freddie Mac and stay, and there's a reason. People are passionate about making sure that we have a strong housing finance system, and making sure that our customers are successful. We are rooting for each other because we are all trying to serve our customers and we want to make it better for our customers and for the country.


For more insights into the technologies that are poised to impact the industry, check out the March issue of DS News, out soon.