Explaining the mortgage point-of-sale (POS) and how it gives lenders the instruments they need to deliver an experience today’s borrowers expect.
Digital mortgage lending isn’t new technology but, with the world being turned upside down due to the COVID-19 crisis, more and more lenders are fine-tuning their tools and techniques to attract borrowers and give them the experience they demand.
The mortgage POS platform is one piece of the digital mortgage origination process that gives banks, credit unions and other non-bank lenders a modern lending experience while staying engaged with borrowers. With a mortgage POS platform, borrowers have what they need to start the mortgage application process while maintaining that connection with their loan officer (LO).
What Is a Mortgage POS?
A mortgage POS is a client-facing platform that gives borrowers the instruments needed to digitally work with their mortgage loan officer. Customers can apply for a mortgage from their desktop, tablet or mobile device, upload necessary documentation, track their application and communicate with their LO from the comfort of their own home.
Mortgage POS platforms prove beneficial for lenders as well. The right software can increase transparency, simplify and improve the efficiency of the mortgage application process for loan officers while giving borrowers exactly what they want: an experience that meets the expectations of the digitally-inclined borrower.
Let’s take a look at the mortgage POS and how it gives lenders and borrowers the necessary tools to remotely start the mortgage loan application process.
Why Do Lenders Need a Mortgage POS?
The coronavirus has fast-tracked the pursuit of digital solutions and the mortgage industry is no exception.
Steve Kaminski, Head of US Residential Lending at TD Bank has given some insight into the changes seen in the mortgage process as a result of the COVID-19 pandemic. He explained that many aspects of the mortgage lending process have predominantly taken place in person and more and more lenders are scrambling to move online to offer their customers remote services.
It’s clear the future is on the digital path and more lenders are employing point-of-sale systems to meet customer demands. We’ve touched on building customer relationships in digital lending and mortgage POS solutions are a fundamental part of the modern mortgage lending experience.
The mortgage POS also gives lenders many more benefits such as increased conversion rates, more control over data, improved market share and higher loan quality with the speed and efficiency that comes with artificial intelligence technology and automation. For more proof that mortgage POS software is changing the industry, big banks such as Chase, Wells Fargo and US Bancorp are investing in this technology.
What are the core features of a mortgage POS platform and how does it improve the mortgage loan process for all involved parties?
Loan Application and Document Management
On a mortgage POS consumer portal, customers can complete their 1003 application on one system, from their preferred device and at any location or time. Borrowers also have a secure location to upload sensitive documents for income, asset and employment verification, debt obligations and liabilities and other records necessary for loan pre-approval such as bank statements
Having everything in one place reduces the chance of borrowers requiring multiple sessions to complete their loan application or abandoning it altogether. Ellie Mae’s 2019 Borrower Insights Survey of 2,000+ renters and borrowers shed some light on consumer perspectives when it comes to the mortgage lending process.
When asked about the reasoning for abandoning online applications, 60% of respondents did so because they felt it was taking too long followed by distractions, missing required information and needing assistance. Online loan applications through a mortgage point-of-sale platform give borrowers the speed and convenience they desire.
After borrowers have uploaded their required documentation and other necessary information for mortgage loan pre-approval into the POS portal, lenders can automatically verify employment, assets and the creditworthiness of the borrower.
Automated Underwriting Systems (AUS) significantly reduces the origination time and the possibility of human error compared to traditional underwriting, helping to streamline the home buying process. AUS uses conditional algorithms to analyze borrower information and generates conditions the borrower needs to meet for loan qualification.
Traditional underwriting takes several days to gather information and cross-check everything. AUS through a mortgage POS platform saves both lender and borrower time and money.
A Product & Pricing Engine (PPE) allows lenders to accumulate a list of real-time mortgage pricing options. Loan officers can determine the best accurate options for their customers in a timely manner.
AUS and PPE can seamlessly integrate with a mortgage POS platform to provide an additional level of transparency to borrowers.
E-Delivered and E-Signed Disclosures
E-delivery and consent through e-signatures on initial disclosures through a mortgage POS eliminates two big complaints in the mortgage industry: the process takes too long and there’s too much paper.
FreeandClear, a website that provides mortgage tools and resources, put together a report on how much paperwork is used in the traditional home-buying process. From the loan application to the appraisal report and all of the documents provided by borrowers - it came out to roughly 280 pages per mortgage with an average of 7.8 million mortgages per year.
Lending institutions pay for printing and storage of paper documents, not to mention the on-the-clock time paid for document organization and retrieval. A mortgage POS means there’s no more paper or fear of missing an important document.
Mortgage POS platforms offer digital collaboration between all involved parties in the mortgage lending process. Collaboration is a key component in transparency, improved project management, borrower satisfaction and getting the loan to close faster.
The Microsoft 365 team reported that 57% of office workers spend an hour a day looking for missing documents and 20% have to recreate documents they couldn’t find. A study of 1,100 American companies by the Institute for Corporate Productivity and Professor Rob Cross of Babson College found that collaborative work is five times more likely to result in higher performance and collaboration tools resulted in a 32% increase in productivity.
Industry standards and regulations are constantly changing. Effective compliance measures are one of the top concerns for mortgage executives.
The financial impact of non-compliance is huge. In a survey of asset managers, brokers and banks from Duffs & Phelps, responses showed that firms spend 4% of their total revenue in compliance but many expect this to increase to 10% by 2022.
Since the 2008 financial crisis, banks have paid over $204 billion in compliance related infractions. Keeping your mortgage POS software up-to-date with the latest regulatory or internal compliance requirements cuts down on compliance fines and fees.
Branding matters and to keep consistency and build trust, a critical component of a mortgage POS platform is user interface brand customization.
Your brand distinguishes you from your competitors and allows you to connect with your audience. Consistent branding is about trust and considering a mortgage is one of the biggest purchases anyone will make in their entire life, it needs to be established from the start.
Reporting and Analytics
Analytics provides transparency and the ability to track the mortgage application through every stage of the lending process. By tracking Key Performance Indicators (KPIs) through a mortgage point-of-sale, lenders can stay up-to-date on loan volume and focus on operational improvement while staying accountable.
Millennial borrowers demand transparency and an online mortgage POS portal provides an extra level of clarity through every step. Borrowers can track their application with the option for constant communication.
The Bottom Line
The right mortgage point-of-sale platform can go deeper into the loan process at faster rates using the latest, up-to-date technology. Homebuyers benefit from an interactive digital mortgage process that fits their needs and schedule while loan officers on the backend can step in when necessary to provide the best customer experience
BeSmartee’s mortgage POS software improves the borrower-lender relationship, increases conversion rates, reduces the amount of time spent on each loan application for loan officers and simplifies the application process.
To learn more about BeSmartee’s mortgage POS platform and how it can help your mortgage business, contact us at (888) 276-1579 or email our mortgage technology experts at firstname.lastname@example.org.