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Point Of Sale Or Online Loan Application Systems; Why They Matter

A woman uses a Point of Sale (POS) system in her retail shop to engage and serve her customers.

I have an acquaintance who sometimes refers to individuals he really disdains as “POSs,” and I always find it odd that he would call someone a “Point of Sale” b/c that is all that POS means to those of us in the mortgage industry. 😊

While the first POS system goes back to 1879 with the invention of the cash register, the phrase became more widely known in the 1980s and 1990s with the advent of credit and ATM card processing machines at retailers.

Point of Sale typically refers to the place where a customer executes payment for goods or services, and such systems can be online or at an actual retailer.

Amazon has one of the most famous POS systems, and all online retailers have them too.  Stock brokerages also have POS systems as does every retailer.

Most mortgage companies now have POS systems too, and the mortgage versions have become more prominent in the news lately b/c they are getting venture capital funding. 

The most prominent of these mortgage POSs is Blend, as it recently had a $300 million cash infusion and $3.3 billion valuation.

WHY MORTGAGE POSs MATTER

POSs matter so much in the mortgage industry b/c they make applying for a loan so much easier for consumers! 

When borrowers click Apply Now on our website, they are engaging Blend — the POS we chose to use.

We chose Blend b/c we think it offers the best consumer experience by far, and we have extensively tested every POS on the market (and will continue to do so b/c the borrower experience is our most important consideration).

Lenders do not try to develop POSs on their own b/c it is enormously complex and expensive to foster “ease of use” while also protecting privacy and remaining compliant with all of the regulatory agencies.

This is why Blend alone has burned through hundreds of millions of dollars to cultivate their excellent POS.

WHAT A MORTAGE POS DOES

A good POS allows borrowers to fill out their loan application digitally in as few of steps and as simply as possible, while also allowing borrowers to upload documentation very easily and to monitor their loan’s or loan application’s progress.

Needless to say, this is a vast improvement over the handwritten applications everyone used for over a century.

As an interesting aside, one of our team members interned at a mortgage company that still used handwritten applications, and it’s highly unlikely that they will survive without engaging a POS.

This is b/c their labor costs are far higher without a good POS and b/c they are forcing their borrowers to do far more work.

POSs are also far better than the system we used even a few years ago where borrowers sent us documents and information via Dropbox or something similar, as POSs are much more secure and efficient.

MAJOR MORTGAGE POSs

Major POSs include Blend, SimpleNexus, Consumer Connect, Floify, Loanzify, Cloudvirga, Maxwell, MortgageHippo, Roostify, and BeSmartee.

We chose Blend b/c it is the best of the bunch, and that is probably b/c they have spent the most money developing their system.

Blend is also one of the most expensive systems and that is why many mortgage companies do not use Blend, despite its superiority. 

Blend is so expensive b/c they charge for every loan a mortgage company funds through Blend even if a borrower only touches Blend for a tiny portion of the application process, and Blend imposes a minimum number of loans to be run through its system each year.

Many mortgage banks, however, have hundreds or even thousands of loan officers who may or may not offer Blend to their clients.

This leaves their mortgage bank on the hook for its Blend loan minimums, even if the mortgage bank’s loan officers do not take advantage of Blend.

At JVM, we can readily afford Blend b/c our no-loan-officer system allows for 100% adoption (all of our clients use Blend).

In addition, we would pay extra for the best POS in any case b/c we will pay almost anything if it improves our clients’ experiences.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167