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   ARTICLE   |   From Scotsman Guide Residential Edition   |   October 2018

Point-of-Sale Technology Is No Longer Just for Retailers

These systems can benefit originators too, but consider this before taking the plunge


Key Points

Items to consider with point-of-sale technology:

  • Ease of use for originators, borrowers
  • Ability to integrate with a loan-operating system
  • Capability of working with multiple lenders
  • Security in transmitting data
  • Availability of a Spanish-language option
  • Customization options
  • Cost, including future fees

Point-of-sale systems have been gaining in popularity in the mortgage industry ever since Quicken Loan’s Rocket Mortgage launched its “Push Button, Get Mortgage” campaign during the Super Bowl in 2016.

Today, it seems nearly every mortgage technology provider offers a point-of-sale system. With so many on the market, what does an originator need to know to determine which system would be the best one for their purposes?

The first thing originators need to understand is how to define what a point-of-sale system is in the mortgage industry. Most people think of them as they are typically defined in retail — the time and place a transaction is completed. The mortgage point of sale, however, is slightly different.

What it can do

A mortgage point-of-sale system interacts with homebuyers so they can begin conducting business with an originator digitally. It starts with intuitive loan applications, prompting potential borrowers with questions that apply to their unique situation and loan inquiry. This improves the borrower experience, as well as lead quality.

A point-of-sale system also may include the ability for borrowers to verify assets, exchange and sign documents electronically, and track loan progress. In addition, the mortgage systems also should seamlessly connect to pricing and decision engines, as well as to automated underwriting systems — speeding up and providing consistent, unbiased pre-qualification.

The technology is a critical element of the digital mortgage process and benefits originators in many ways. It enhances the borrower experience, especially for those borrowers who prefer to shop online.

The technology allows originators to understand borrower needs, communication preferences, and how far along the borrower is in the mortgage process. Thus, it allows an originator to tailor their approach and services for that specific borrower’s needs.

In addition, a good point-of-sale system improves process efficiency by reducing paper, turn times and expenses — making the technology a necessity for success in the mortgage industry today.

The need for it

One of the reasons point-of-sale systems have become a necessity in the mortgage industry is millennials. This generation — the largest generation in U.S. history — has been the most active in homebuying for the past five years.

Millennials accounted for 36 percent of home purchases in 2017, surpassing baby boomers (32 percent) and Gen Xers (26 percent), according to the National Association of Realtors.

Unlike previous generations, millennials are not just tech-savvy. They are tech-dependent. Millennials spend, on average, nearly four hours a day online, and 68 percent consider their smartphones to be their most important device, according to a recent report from GlobalWebIndex.

In addition, millennials find brick-and-mortar institutions inconvenient. In a recent study from Computer Services Inc. and The Center for Generational Kinetics, 35 percent of millennials revealed that they do not visit banks due to limited branch hours. Additionally, 54 percent of millennials believe they can perform any necessary bank functions online. By having point-of-sale technology in place, originators may engage with millennials at the moment they are ready to buy a home — regardless of the time or the place.

What to consider

It’s important for originators to consider all options and potential pitfalls when shopping for a point- of-sale system. Shopping for any technology does require a significant investment in resources. But what should an originator consider?

The first question is whether it’s easy to use for both the originator and their borrowers. It should prompt borrowers with questions that apply through the system based on previous answers and skip questions that are not applicable. This will lead to better, faster service and higher application-completion rates.

The next thing to consider is whether the technology can be seamlessly integrated with your existing loan-origination system. The ability for borrower data to easily transfer between the two systems increases the efficiency of the mortgage process and decreases the risk of errors that comes with double data entry.

Originators also should think about whether the point-of-sale system ties them to a single lender. That can limit the products an originator can offer a borrower, particularly loan products that do not fit in the traditional qualified mortgage (QM) box. For originators looking to reach more underserved borrowers — such as individuals with past defaults, sole proprietors, or individuals with assets who are seeking interest-only or asset-depletion options — having access to more than one lender is a necessity.

Security is another concern. With more and more borrowers preferring to communicate online, it’s essential to have functionality that allows originators to securely request required documents for verification or e-signatures. In addition, borrowers must be able to securely submit those required documents, whether they scan them into their computer or capture the images via a mobile-device camera.

Mortgage originators also should know whether the point-of-sale technology includes a Spanish- language option. Hispanics are the only demographic in the United States to have increased their rate of homeownership in the past few years — from 45.6 percent in 2015 to 46.2 percent in 2017, according to the 2017 State of Hispanic Homeownership Report, a publication from the National Association of Hispanic Real Estate Professionals and the Hispanic Wealth Project. Offering a Spanish-language option will allow originators to broaden their reach within this growing demographic.

Another item to consider is whether the point-of-sale technology allows originators to showcase their brand with their logo and a personalized URL address. This is called white-labeling and it boosts the originator’s visibility and makes a great first impression with potential borrowers.

Originators need to know upfront the cost for the point-of-sale technology, and they should ask if there are set-up fees, monthly payments or pay-only-for-actual-use fees. This one may seem obvious, but it’s important for originators to confirm there are no hidden fees.


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