Better Home & Finance launched an app which allows users to connect to its Tinman underwriting engine directly in ChatGPT from OpenAI.

Access is through a custom Model Context Protocol connector built by Better in collaboration with OpenAI. MCP is an open standard which enables integration between large language model applications and external data sources and tools, the specifications page on the modelcontextprotocol.io website states.

"The mortgage industry is riddled with inefficiencies that hurt consumers, as well as the loan officers and lenders who serve them," said Leah Price, general manager of the Tinman AI Platform, in a press release. "Big mortgage aggregators in the broker and correspondent channel charge what is essentially a 1-2% tax on each loan just to underwrite a mortgage and deliver it to an institutional investor. That ends now."

Users can log into a ChatGPT Enterprise account, download the Tinman AI credit decision engine and connect their guidelines, pricing and customer relationship management system to process, underwrite and fulfill mortgage applications, Price said.

The announcement looks to have spooked investors in the nation's two largest mortgage lenders, UWM Holdings and Rocket Cos., a Seeking Alpha headline from Thursday afternoon indicated.

On a day when the Dow Jones Industrial Average already was tanking because of fears of Iran conflict driven inflation, the price at both companies took a dive around the time the Better announcement came out.

At one point today, UWM was trading more than 9 cents over its Wednesday closing price. Its closing price on Thursday was $4.04 per share, a decline of 14 cents. Rocket was also up 9 cents per share in early trading but was now down to $15.67 per share, or 96 cents lower.

Better, on the other hand, was up to $33.40, a gain of $1.98 from Wednesday's close of $31.42; the bulk of the rise also was after 12:30. It opened the day at $30.61.

Another large independent mortgage banker whose stock looked to be impacted was Pennymac Financial Services. Its price also slipped in afternoon trading, down by $2.11 per share to $88.56.

Meanwhile, the Dow was down nearly 1,160 points on the day around 2:30 p.m., but regained ground and closed 784.67 points lower.

"We have full intention to continue building additional tools on OpenAI that will revolutionize the mortgage and home equity industry together," Better CEO Vishal Garg said in the press release.

Better says the launch expands its collaboration with OpenAI, including the use of its multimodal models to power Betsy, the lender's AI loan agent.

"With OpenAI, Better is not only advancing mortgage intelligence for the industry but also demonstrating how AI can transform how financial institutions operate from the inside out," said Giancarlo Lionetti, chief commercial officer at OpenAI.

Better will announce its fourth quarter results on March 13. The company has yet to turn a GAAP net profit since becoming public.

In October, it launched a home equity line of credit and closed-end second-lien wholesale production channel. In addition, Finance of America began using Tinman to originate HELOCs and home equity loans.

Fairway Home Mortgage is also working with OpenAI to improve the efficiencies in its loan manufacturing process, the companies announced in September.

Using an AI toolset like OpenAI "allows you to build on and refine models to provide loan officers, or even borrowers, in some cases, with more accurate data," with a lower, though not zero, risk of hallucinations, said Caleb Ondrusek, recently promoted to executive vice president of technology and innovation.