Optimal Blue’s Kevin Foley discusses AI Labs, Virtual Economist rollout

Earlier this week, Optimal Blue announced the general availability of Virtual Economist, an artificial intelligence-powered forecasting tool designed to help mortgage capital markets leaders analyze interest rates and mortgage lock volume.

The company also launched Optimal Blue AI Labs, an initiative led by Kevin Foley, the company’s newly appointed director of AI Labs, to accelerate the development and deployment of AI capabilities across its product portfolio.

Foley took the stage alongside HousingWire‘s Sarah Wheeler at the AI Summit in Dallas on Tuesday to discuss the product and share developments at the company.

“We rolled out our new Virtual Economist, an AI- and machine learning-powered forecasting tool to help predict interest rates and lock volume under a variety of macroeconomic scenarios, allowing lenders to better plan for how to grow their business,” Foley told the audience.

The tool, originally revealed in beta mode at Optimal Blue’s annual summit in February 2026, combines public economic data with Optimal Blue’s proprietary mortgage lock volume data, which the company says represents more than 35% of mortgage locks nationwide. Its machine learning models generate forecasts for interest rates and market volume while allowing users to run scenarios involving the 10-year Treasury, mortgage-backed securities spreads and the primary-secondary spread.

Foley said the tool is intended to help lenders plan for different macroeconomic scenarios and make more informed decisions about their businesses.

“The value is really living in mortgage now” in what he described as the “harness” around an AI model, Foley said. That harness provides a company’s institutional context, systems and processes to help AI models solve industry-specific problems.

AI adoption hurdles

AI models have improved significantly in recent months, Foley said, but they generally lack an understanding of a company’s specific operations and the mortgage industry’s nuances.

“You provide your own institutional context around how your company operates, the systems that you operate within, and how you leverage the harness is where you end up with the most ROI,” Foley said.

Foley also cautioned that greater AI adoption can create new operational challenges, including higher costs and the need for employees to review AI-generated work.

Companies moving from subsidized AI subscriptions to usage-based application programming interface (API) pricing could see substantially higher costs, he said. Optimal Blue has implemented usage limits and tracks AI consumption by model to monitor spending and evaluate return on investment.

“If you don’t have a dashboard today where you can go and see how much I spent on my tokens in the last 30 days or seven days or whatever, that’s maybe [the] No. 1 thing you can take away from this,” Foley said.

The company’s AI Labs is intended to address some of these challenges while speeding the development of new AI capabilities. Optimal Blue said the group will serve as a centralized hub and incubator for AI initiatives, with a focus on identifying, evaluating, developing and governing AI across its product ecosystem.

“Our new AI labs are going to serve as a centralized hub within Optimal Blue, an incubator and accelerator for new AI capabilities. Ultimately, that means delivering more AI capabilities faster to help solve real‑world problems for lenders,” he said.

Future initiatives in the works

Foley added that the lab also will focus on recruiting employees with strong AI skills and encouraging collaboration across departments.

He said workers who can use AI tools effectively, understand multiple areas of a business and think about how different systems interact will become increasingly valuable.

In the company’s press release regarding the debut of Optimal Blue AI Labs and Virtual Economist, Optimal Blue CEO Joe Tyrrell said the company has already deployed more than a dozen AI products and plans to use AI Labs to accelerate development of additional applications.

The company is also exploring what Tyrrell calls “ontological AI,” which he said would provide large language models with additional context and relationships across data. The technology could support applications in mortgage pricing, hedging, trading, capital markets analytics, workflow automation and customer-facing tools.

Foley said Optimal Blue will measure the lab’s progress through a range of metrics as it develops new capabilities and expects the initiative to be fully established over the coming months.

This article was written by Sarah Wolak and generated with the assistance of HousingWire Automation, then reviewed by a HousingWire editor before publication.