AI, compliance & innovation: Seth Hooper on Mortgage Cadence’s blueprint for the future
What if following the rules was partnered with the fastest path to innovation? Mortgage Cadence’s Chief Product Officer shares details on his role with Diego Sanchez on why compliance is no longer just a safety net — it’s a strategic advantage.
Hooper delves into the challenges lenders face and how to keep pace when regulation lags behind innovation; what criteria to use to judge technology and compliance partners; and how the industry should shift its mindset regarding compliance. Seth provides actionable steps that lenders can implement today to responsibly leverage AI while navigating regulatory uncertainty. Seth paints a bold picture of what’s ahead for Mortgage Cadence with AI, and the regulatory landscape that can become a launchpad rather than a hurdle.
“I’ve been in this industry for 25 years,” Hooper said. “I oversee both the strategy and product here at Mortgage Cadence, and what really excites me is being able to deliver innovative products for our clients.”
Hooper’s team serves lenders across the spectrum, from conventional and government loans to reverse mortgage, DSCR, and high-net-worth lending. But as AI reshapes the mortgage process, he said the company’s focus remains grounded in one principle: compliance is not optional. It’s existential.
“Mortgage is a highly regulated industry,” Hooper explained. “It’s really existential that there’s audibility and traceability built into the product so that when you deliver those solutions, it’s not an afterthought.”
Sanchez noted that AI is evolving faster than regulators can keep up. For Hooper, the key lies in strong governance. “You’ve got to start with your governance policies,” he said. “They have to be robust and thorough enough to adapt as models or AI changes.”
He described five core tenets of sound AI governance: proportionality, transparency, traceability, audibility, and validation. “Start by ranking your AI use cases — what’s assistive versus what’s credit-impacting,” he said. “If it affects credit decisions, it requires stricter oversight. Then you need explainability — understanding in human language how and why the model made a decision — and traceability, to know how it came to that decision.”
Hooper added, “Models change all the time. You’ve got to be able to rerun a decision exactly as it was at that point in time. And finally, you’ve got to make sure you have human validation — a human in the loop — so that you know what your teams are implementing and what models they’re using.”
When lenders look for new technology or compliance partners, Hooper advised them to “look closely at that provider’s governance policy and make sure it aligns with yours.” The questions to ask, he said, are practical ones: “What model are they using? How often is it updated? How are they communicating changes? Are they using open or closed models? And how are they protecting consumer privacy — especially with the rise of biometric data?”
Balancing innovation with compliance, Hooper said, means reframing governance as a driver of borrower trust rather than a drag on speed. “People think compliance hinders innovation, but really it’s about alignment,” he said. “When the consumer, the lender, and the regulator are all aligned, you get borrower-centric outcomes — transparency, speed, and a good experience.”
He laughed as Sanchez summed it up: “Move fast — but this is mortgage, so maybe don’t break things.”
“Exactly,” Hooper said. “You’ve got to make sure you’ve got speed, but also safety and transparency in everything you do.”
Looking ahead, Hooper sees a fully digital mortgage process becoming the new normal. “When I started 25 years ago, it was all paper and file folders,” he said. “Now we’re moving toward a truly digital mortgage, where the majority of the market will have a fully automated experience that dramatically reduces time to close.”
Mortgage Cadence, he explained, is working to make its LOS and AI systems as intuitive as possible. “We want it to be like plugging in a USB port — truly plug-and-play,” Hooper said. “That way, lenders can focus on what they do best — serving their customers — while we provide the frameworks that help them differentiate and grow.”
As competition intensifies across the lending space, Hooper said the mission remains clear: “Our job is to give lenders the tools to move faster, stay compliant, and deliver the kind of borrower experience that builds trust for the long term.”
