This article originally appeared in the March 2025 edition of MortgagePoint magazine, online now.
It’s always interesting to watch how market conditions intersect with technological developments to drive the evolution of an industry, shaping the creation of new products and services. We only have to look at the mortgage industry, more specifically, mortgage point-of-sale (POS) solutions, to see this occurring. Like much of the mortgage sector, POS platforms are undergoing a dramatic transformation.
The move to digital mortgage lending continues to gain ground, with some lenders far into the digital transformation journey and others just beginning to dip their toes. Regardless of their path, or how fast or slow they get there, lenders are making the shift toward more efficient, technology-informed solutions—including POSs—because the market is demanding it. As the industry continues its evolution from record volume peaks to deep volume declines, lenders are laser focused on how they can improve operations, increase cost efficiencies and enhance the borrower experience.
Technology is the fuel powering the evolution of mortgage POS platforms, but beyond merely incorporating automation to improve efficiency and productivity, lenders are looking for increased functionality from their POS solutions. A POS that simply facilitates the application no longer satisfies market demands. Instead, POS platforms are evolving to be more comprehensive tools that deliver more features, more benefits and more functionality to meet the changing expectations of homebuyers.
The way people are buying homes is changing as younger, more tech-savvy buyers become the largest homebuyer segment. It’s inevitable that the demand for fast, digital mortgage lending from these younger homebuyers, including Gen Z and beyond, will only continue to grow. Importantly, younger homebuyers have different customer experience expectations than older buyers. They were raised with technology at their fingertips, including social media; instant, digital access to information and fast delivery of goods and services procured with only a couple of clicks. They expect a frictionless experience with a fully automated platform that is fast, friendly, and straightforward. It’s an expectation that a mortgage POS should meet younger buyers where they are and deliver expanded functionality and borrower-centric features that can create stickiness with prospective borrowers throughout the entire process, beginning from when they first think about buying a home through final loan closing.
The mortgage POS of the not-too-distant future will be even more streamlined than what we’re seeing today and offer features that engage with the consumer even before they are contemplating a mortgage. For example, it may have a front-end lead-generation component tied to the home search process or tools to facilitate financial scenario building that would allow prospective borrowers to explore various pricing, location, home size and feature scenarios. This is clearly a more interactive borrower engagement model that goes beyond the early technology of simple mortgage calculators. The technology for mortgage POS platforms is evolving to help borrowers—with guidance from their loan officers—identify things like outstanding debt that could be reduced to improve their purchasing power or affordability questions that can help them understand their best loan options.
The evolution of POS technology will also enable lenders to better monitor, track and communicate with prospective borrowers so that when they’re ready to buy, they’ve already had a chance to build the customer relationship. It keeps potential borrowers in the pipeline with functionality that can seamlessly move them from the home search phase to the application phase to ultimately closing on the loan. Industry data continues to point to evidence that a lender that engages with prospects early in the homebuying process, including providing the first pre-approval, will typically be the lender a borrower selects. Not only does this “early engagement” help identify, track and engage prospects, it also reduces expensive “fall-out” risk by providing touchpoints for pre-approvals and other borrower assessment tools, that, in the process, identify borrowers who don’t meet lender qualifications.
The mortgage industry’s traditional response to fluctuating mortgage volume has been to hire loan officers and processors like crazy when volume is up and fire them when it’s down. But the appeal of that approach is steadily decreasing as the value proposition for digital lending continues to increase, improving operational efficiency—even if volume is low—which provides a welcome benefit to help offset current low margins. While future POS solutions will deliver a more holistic borrower experience, for now, lenders are equally focused on how POS platforms can make the origination process faster and do it with fewer people. The market will return, and when it does, lenders know they cannot rely on the old way of doing things.
Currently, increased automation that comes with tech-enabled POS solutions not only saves time, but also improves compliance, reduces mistakes and decreases rework with an intuitive, cost-effective system. Saving time on each origination allows lenders to more effectively manage loan officer task assignments and productivity, further reducing the cost per loan. Beyond cost savings, new and improved POS platforms also deliver an enhanced experience for both the borrower and loan officer. For instance, having the ability to develop customized business rules increases automation which, in turn, improves both workflow efficiency for loan officers and communications with borrowers. Real-time updates and notifications streamline the process by informing loan officers, underwriters, and borrowers when changes occur in the process that require action.
The evolution of POS technology has improved the process of securing and updating documents during origination—previously a clunky back and forth that frequently left borrowers in the dark about next steps. Today, borrowers can easily communicate with their loan officer in a single, user-friendly environment, including via mobile app and SMS text messaging, depending on their personal communication preferences. For loan officers, today it is an intuitive, automated system that delivers an efficient and repeatable process that makes it easy to get their job done more quickly with fewer mistakes, giving them more time to work on more loans.
Beyond the benefits of efficiency, cost savings and improved productivity, current tech-enabled POS solutions communicate a lender’s ability to meet the changing demands of up-and-coming homebuyers. A POS that offers a seamless, digital borrower experience that is not only attractive to these new buyers, but it is demanded from them, once again proves that when market demand combines forces with technological developments, beautiful things can happen.
