January 16, 2022 — In our first blog post on mortgage point-of-sale (POS) platforms, we describe a POS as the ‘freeway and the GPS’ between lenders and borrowers – the centralized tool for process navigation, communication, collaboration and efficiency. In short, POS platforms revolutionize and modernize the mortgage application process, while also delivering substantial quality and productivity gains on the back-end processing duties.
In today’s post, we elaborate further on the specific benefits to mortgage lenders and their borrowers..
The mortgage industry is finally enjoying a digital transformation, the use of digital technology to substantially improve or develop new business processes. This can be accomplished by optimizing existing infrastructure or processes, though is more often characterized as deploying new technology solutions. The challenge with companies trying to transform existing ‘anything’ is that most companies fail to fully accomplish the main principle of process reengineering…
‘Before you automate, you must obliterate’
Too many reengineering efforts end up simply automating existing businesses processes, gaining nothing except achieving the same mediocre results – just getting there faster.
When lenders objectively assess their strengths and gaps, aligned with subsequent POS platform due diligence, they set the stage for potentially one of their most strategic and consequential decisions.
It is said that Quicken’s launch of Rocket Mortgage in 2015 was the first fully online mortgage experience, and that within two years there were over two dozen such digital lenders. Fast forward to today and it would be a much shorter discussion to list lenders not using a POS platform.
Mortgage POS platforms certainly qualify as transformative, born out of the process of analyzing borrower trends, demands and use of technology to improve the experience and relationship. Digital trends in mortgage are unstoppable, as substantiated within our aforementioned prior blog post. Borrowers expect to be WOW’d by an online experience that is simple, informative and expeditious. There are intrinsic needs that must be fulfilled. Lenders must be easy-to-do-business with, and the POS platform serves as that enabling collaboration tool.
Not surprisingly, industry data suggests that the largest banks and lenders have a significantly higher adoption rate of digital technology, namely due to better access to capital than smaller institutions. Regardless, lenders of all sizes need to grasp the business imperative of mortgage POS platforms.
Benefits of a Mortgage POS Platform
Lenders and their borrowers are rather equally served by robust POS platforms. The gains to be achieved by each stakeholder rival just about any other technology or modernization effort available.
Whether digitally savvy or not, most POS-engaged borrowers applaud the mortgage application process of today versus the paper palooza process from yester-year. Why? Borrowers can:
- Use any digital device of choice to securely apply online in just a few simple steps
- Provide consent to pull credit, tax returns and other related verifications
- Upload requisite documents, as well as receive lender disclosures and documents
- eSign documents
- Enjoy 2-way communication and information within dashboards
- Monitor end-to-end status, from application through funding
- Reply upon the POS as the central portal for everything, never confused on where to look or whom to contact
- Complete 100% of the process without ever leaving home, if desired
Among the most important priorities, lenders can swiftly end the borrower’s mortgage shopping journey – getting them off the market – with an inspiring POS experience. First impressions are everything. While not all-inclusive, lenders should also enjoy the following benefits:
A borrower experience to drive up customer sat scores and earn long-term loyalty
- A personalized experience from anywhere borrowers ‘hang out’
- Modern technology, similar to other popular online sites frequented
- A one-stop-shop for two-way engagement, document exchange and eSign
- Holistic relationship management – the central portal
Improved conversions and market share growth
- A digital strategy (POS, CRM, etc.) helps lenders codify workflows on the latest consumer behaviors and marketing trends
- Advanced analytics foster an ability to make decisions based upon data, better evaluate and adjust marketing strategies
- Simplicity of API integrations
- Connect to product, pricing & eligibility (PPE), CRM, LOS, credit, verifications, flood, tax, valuations, title, Big Data and other vendors
- Enables lenders to derive an initial application decision almost immediately
Compliance, quality and control
- Compliance and data-embedded workflows
- Improved business process control
- Higher loan quality, fewer post-close issues – faster to sell on secondary market
- Substantially lower risk, default rates and investor reporting errors
- Higher staff productivity
- Increased volume bandwidth
- Shorter time to close
- Reduction in costs and cost avoidance (compliance fines, loan buybacks, etc.)
- Higher margins and profitability, driven by improvements across the entire enterprise
It is abundantly clear what a POS platform can do for lenders of any size, where the potential impact appears limitless. Nevertheless, I am always astounded when members of management complain about their staff not using the POS, instead opting for the old way. Mindboggling on many levels.
Granted, change is often met with trepidation, especially in the hectic environment of commission-based loan officers (LOs) where volume is king. Who has time to take a productivity hit – even if likely short lived? While maybe upsetting to many LOs, management must secure organization-wide POS adoption. Of course, one approach could be to just continue the floggings until LOs ‘break.’ Never advisable. Instead, the lender must help paint the picture of the massive gains to be had, down to the individual LO level where necessary. Generate realistic potential outcomes to answer the LO question of, “What’s in it for me?” Lenders must have a thorough roll-out and support plan.
Let’s keep this short and sweet. There are very few available technologies for lenders to deploy that will deliver more overall value to top line and bottom-line results. Lenders will get put in front of more prospective borrowers, close more of their loans and enjoy substantially higher margins and profits.
If you already have a POS, you must determine if you are leveraging it to the fullest. If the answer is ‘no,’ you either need to adjust to make that happen – or contemplate a different POS platform. Things change, including your own business needs, as well as the rapidly evolving digital technology. Is it time for ‘a check-up from the neck up?”
Scott Roller founded 3W Partners LLC and Vendor Surf (www.VendorSurf.com), each dedicated to revolutionizing sourcing of vendors in the mortgage and credit union ecosystems. The companies monitor and report on the service provider market to provide participants what they need to excel in today’s market. Scott@VendorSurf.com