AI Governance
Mortgage Bankers AI Governance Guide
A practitioner-level reference that maps every AI deployment in the mortgage lifecycle to the regulations that govern it, the examination questions that will surface it, and the governance infrastructure that makes it defensible.
Who It's For
Written for CEOs, General Counsel, Chief Compliance Officers, and operational leaders at independent mortgage banks, depositories, credit unions, mortgage brokers, and fintechs.
What's Inside
- Governance Framework, Federal Regulatory Architecture, State AI Legislation
- Pricing & Secondary Markets, Servicing & Loss Mitigation
- Workplace AI & Discovery, Vendor Due Diligence, Data Privacy & NPI
- Quality Control & Fraud Detection, Regulatory Horizon
- Legal Practice & Privilege, HR & Employment AI
Authors
By James W. Brody, Esq. and Ronald Gapp, Jr., Esq., Founding Partners of Brody | Gapp LLP.
Mr. Brody has spent more than two decades exclusively in mortgage banking, serving as lead counsel in repurchase, indemnification, and regulatory matters involving Lehman Brothers, Fannie Mae, Freddie Mac, and other major institutions, and has been quoted in The New York Times on federal mortgage policy. Mr. Gapp has served for over a decade as General Counsel — and as Chief Operating Officer and General Counsel — to nationwide mortgage lenders ranging from 200 to over 2,000 employees, and is a previous HousingWire Rising Star. The firm’s practice spans repurchase defense, regulatory enforcement and audit response, fair lending, vendor governance, and AI governance.
AI Compliance Audits for Lenders and Vendors
Brody | Gapp LLP helps mortgage lenders respond to the evolving AI governance expectations emerging through Fannie Mae, Freddie Mac, and broader regulatory guidance impacting the mortgage industry. As lenders continue adopting AI across underwriting, operations, quality control, servicing, borrower engagement, marketing, and workflow automation, agencies and regulators are increasingly expecting institutions to demonstrate that AI systems are being properly identified, risk ranked, governed, monitored, and controlled.
Lenders
Our AI Governance Program is designed specifically for mortgage lenders and focuses on helping institutions build practical, defensible governance structures around the use of artificial intelligence. We assist lenders in evaluating AI vendors, documenting oversight, implementing internal controls, and developing governance frameworks that address fair lending, consumer protection, privacy, cybersecurity, human oversight, auditability, change management, and regulatory readiness. The goal is not to slow innovation down, but to help lenders continue leveraging AI responsibly while demonstrating accountability to regulators, investors, warehouse lenders, counterparties, and internal risk committees.
Our support is scalable based on the institution’s size, complexity, and AI exposure, and generally consists of three core service offerings:
AI Governance Gap Assessment
A high level review of the lender’s current AI usage, vendor exposure, governance maturity, and overall readiness for evolving Fannie Mae and Freddie Mac expectations. This assessment helps identify governance gaps, undocumented AI usage, policy deficiencies, and areas requiring enhanced oversight or internal controls.
AI Vendor Risk Review Program
A structured review of existing or proposed AI vendors to help lenders categorize risk exposure and document vendor oversight. Reviews may include analysis of AI functionality, consumer impact, fair lending considerations, privacy and security safeguards, human oversight controls, auditability, change management, and operational dependencies to support a defensible vendor governance framework.
AI Governance Framework Implementation
Development and implementation of a scalable AI governance program tailored to the mortgage industry. This includes governance policies, AI inventory tracking, approval workflows, acceptable use standards, risk committee structures, vendor onboarding procedures, monitoring protocols, escalation requirements, and documentation frameworks designed to support regulatory, investor, and agency expectations.
Vendors
Brody Gapp has created a formal AI Governance and Compliance Attestation framework designed to assist mortgage lenders and technology providers in evaluating artificial intelligence systems used throughout the mortgage origination process. These AI-driven technologies increasingly analyze borrower documents, appraisal files, and product guidelines to assist with qualifying income calculations, issue identification, workflow automation, and resolution guidance before loans reach underwriting.
Brody Gapp’s AI Governance and Compliance Attestation evaluates key areas including fair lending applicability, adverse action considerations, model governance, vendor risk management, data governance, internal controls, explainability, human oversight, and examination readiness. The framework is specifically designed to assist their partner lenders in achieving evolving Fannie Mae and Freddie Mac AI Governance and Vendor Oversight requirements as artificial intelligence becomes increasingly integrated into mortgage lending operations.
As lenders continue adopting AI technologies across the lending lifecycle, many institutions are still developing governance frameworks capable of addressing regulatory expectations surrounding automated systems, risk management, accountability, and operational oversight. Brody Gapp’s attestation framework provides a practical, compliance-focused approach for evaluating AI-driven mortgage technologies while supporting innovation and regulatory readiness. The goal of Brody Gapp’s AI Program for AI Vendors is to give them a competitive edge in selling their platform against the growing competition by giving their partners the comfort they need to meet their regulatory and contractual obligations with Fannie Mae and Freddie Mac’s recent guidance on AI Governance.
For more information regarding AI governance reviews, vendor attestations, and mortgage technology compliance programs, visit Brody Gapp LLP.
