How to Select a Mortgage Point-of-Sale (POS) System

January 19, 2022 — When recently shopping for a new vehicle for my wife, I asked her to create a list of all ‘must-have’ features. God bless her! All she said was a Jeep with a removable hard top and a digital radio that displays the name of the artist. (I know what you are thinking. Yes, I definitely married well.). We now have a clear plan.

I share that tidbit because it is directly related to advice herein. “Know before you go.” When looking for a mortgage point-of-sale (POS) system, do absolutely nothing until you have defined your goals and problems you are trying to solve.

“If you don't know where you are going, any road will get you there.” – Lewis Carrol

This article is intended to keep you focused on the more essential considerations when performing POS vendor due diligence, versus just chasing your digitization dream.

Mortgage POS Imperative - part 3 (selection)

Business Goals and Problems

Arguably the most critical step in your journey begins… well – in the beginning. What are your motivations for deploying a new POS system? Are you losing top performing loan officers (LOs) to the competition because of technology? Is your quality appalling, driving sky-high loan repurchases, or regulatory and compliance penalties? Is your loan application fallout rate unbearable? Something has led you to this point – very likely multiple ‘somethings.’

The key is to first define these ‘somethings,’ in a forced-rank order, and equally as important, conduct a deep dive into their root causes. It is imperative to identify the culprits. At this point, you have just converted your findings into highly refined business requirements – those that should drive your POS shopping experience.

Below are some key motivations from mortgage lenders (beyond the aforementioned issues):

  • Company financials suffering
  • The 5-year business plan targets are stratospheric – compared to the current state
  • Borrower feedback and CSAT scores are tanking
  • Troubling audit finding reports (internal and/or external)
  • Post-close audits are blowing up; Delays in selling loans to investors
  • Borrowers find your competitors more easy-to-do-business with

These scenarios are very real and likely resonate with you today. Robust POS platforms, when deployed and leveraged correctly, are game changers.

Don’t forget to document your strengths too, those business processes and tools that are enabling your business success. You need to select a POS platform that solves for your shortcomings, yet not lose any ground on what is working well.

This initial scoping effort will help you stay focused on what really matters throughout the due diligence process, serving as your compass. You may possibly see a lot of whistles, bells, gizmos and magic pixie dust along the way. Let’s inject some reality here too. Another benefit – this gives you ‘ammunition’ against that senior (and influential) leader that already has his/her mind made up based on the POS used at the previous employer.

SME Engagement

In defining your POS needs, you must include the ‘resident rock stars’ (subject matter experts) from a cross-section of the enterprise – those possessing the tribal knowledge that makes them ‘go to’ people within their department. They will help separate fact from fiction and be the ones getting into the weeds when flushing out those culprit root causes. You might also try to find SMEs with experience in a few different POS platforms at prior employers.

Vendor Experience and Reputation

I generally hold an alternative viewpoint on this dimension. Many leaders have an affinity for those tech vendors with rich mortgage experience, preferably time spent originating loans at some point in their past. My take: I’m no butcher, but I can darn sure pick out the best cut of meat in the case.

Lenders understand the lending process – from application through funding and beyond. They know their good, bad and ugly. No one is better positioned to assess the POS platforms and overlay the value props onto their own business. Vendors can also offer sage guidance and consultation based upon what they see across the industry. While reputable vendors will never share client secrets, their market insights can be priceless.

One very intriguing discovery – we found a couple POS vendors that actually maintain their own processors, underwriters and closers, providing POS clients with staff augmentation options. It stands to reason that they have solid mortgage experience.

Features and Functions

Among the many benefits, robust POS platforms should deliver the following value props, at minimum:

  • A one-stop-shop portal, without need for LOs of borrowers to go elsewhere
    • Holistic relationship management
    • Mobile compatibility (iOS, Android, etc.)
  • Customizable workflows, embedding compliance, business rules, etc. Hard and soft stops
  • The exchange of all documents from all parties, disclosures included
    • Auto-validate specific document data, and flag issues
    • eSignature
  • 2-way communication
    • Auto-save all communications and activity for audit purposes
  • End-to-end borrower status and dashboards, application through funding
  • Customizable and intelligent pipeline management
    • Task driven toll gates and dashboards for accountability (escalation report, LO oversight)
    • Alerts, triggers and reminders for all parties; Task re-prioritization
  • Advanced analytical tools

Paramount to your effort will be to look for intuitive user experience (UX) design and navigation, both from a borrower and lender perspective – inspiring engagement.

Vendor Integrations

The POS platform must facilitate integrations with all your other vendor types, enabling lenders to instantly evaluate applicant qualifications and quickly disposition them for next steps. Examples: Product, pricing and eligibility (PPE), credit, verifications (i.e., employment, income, assets, IRS), flood, valuations, title, Big Data and other vendors.

You also need to know if the POS is already integrated with your loan origination system (LOS) and customer relationship management (CRM) platform. If not, what is the likely effort and timeline to integrate with them?

Have a deep discussion with the POS vendor and your IT team to understand integration efforts, expectations, duration and resource requirements. This is often among the biggest differentiators within your selection process. What is the heavy lift, and who is signing up for it?

Additional Considerations

Are few other important aspects are:

  • Technology
    • What is the vendor’s tech stack? Life cycle stage, major upgrades coming soon?
    • Have they invested to keep up with technology, regulatory, consumer behavior, etc.
    • Does your existing IT team have experience to code in-house workflow customization?
    • Information security infrastructure; Breach history
  • Support
    • Process when an issue or urgent need arises; Will you be a priority?
    • Do they entertain customization at the platform level? Will you have your own instance, or do all clients work off the same platform?
    • Any user group engagement, info sharing? Best practices, optimization, etc.

Price – Cost – Value

After nearly a decade leading global vendor management at a Top-5 mortgage bank, and the decade since – dedicated to ‘all things vendor’ – our lesson learned is:

You always get what you pay for.

Thoroughly understand the full stream business value. What is the value of higher conversion rates, increased market share, better enterprise-wide productivity and quality, stronger compliance, selling loans faster and reduced buybacks, along with opportunity for substantial gains in margins and profit? These outcomes are very achievable, provided you know exactly what you need and you choose wisely.

By all means, negotiate – knowing that profit margins in technology are usually very hefty – with room to haggle.

Consider a variable cost model that is flexible in drought and fruitful volume cycles, leveraging economies of scale. As you grow, you should be able to enjoy improved pricing as you deepen your relationship with the POS vendor.

Lastly, far too many tech vendors present an ‘all or nothing’ model, where you sign up for the entire platform, regardless of your current needs. Look for a vendor partner that will consider a modular approach to deployment and pricing, allowing you to grow as you go. Don’t pay for modules that you may evolve to within a few years, if ever.

How do you eat an elephant? One bite at a time.

Of course, elephants are not on the menu, however, your successful selection criteria is. Order from the menu you created in the beginning. Skip the chef’s specials of the day.

In Summary

Your task is a double-edged sword. Fortunately, you have a multitude of POS platforms to consider, with more coming online all the time. Conversely, this can only make your due diligence effort more difficult. Stick to the plan – focus on needs, not wants. You will surely discover some pretty cool features not previously aware of, but they must link back directly to your plan.

You cannot put enough emphasis on the UX design and navigation. If this is uninspiring, so too will be LO and borrower adoption. First impressions are everything, somewhat of a beauty contest – as we are a very visual society.


Related Reads

What is a Mortgage POS and Why Lenders Require One

Benefits of Deploying a Mortgage POS


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Scott Roller founded 3W Partners LLC and Vendor Surf (, 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.