CoreLogic, the data and analytics spin-off of the First American Corp., purchased mortgage technology vendor Dorado Network Systems for $32 million, Santa Ana, Calif.-based CoreLogic said.
CoreLogic previously held a 38% interest in San Mateo, Calif.-based Dorado, which specializes in software-as-a-service origination technology, including a loan origination system, point-of-sale tool, product and pricing engine, and other products.
In July, the U.S. Patent and Trademark Office issued a Notice of Allowance to Dorado for a patent application it submitted in April 2006. The patent, "Dynamic Workflow Architectures for Loan Processing," was granted for the workflow process used in Dorado's loan origination system, called ChannelMaster.
Other LOS platforms have a static workflow, meaning that there is a fixed order for the steps to process the loan. With Dorado's architecture, multiple steps can happen at once. The patented technology has applications beyond the LOS. A new Dorado product uses the fluid workflow process to integrate third-party fulfillment vendors like document preparation, title services, appraisals and other underwriting services, with an LOS.
With the transaction, CoreLogic acquires that intellectual property and will run the company as a division called CoreLogic Dorado. Dorado CEO Dain Ehring and chief technology officer Rob Carpenter will remain with the company, leading it under the CoreLogic banner. Both executives previously held positions in the JavaSoft division of Sun Microsystems before co-founding Dorado in 1998. Dain will hold the position of senior vice president. Carpenter's new title has not been finalized. CoreLogic Dorado will sit in CoreLogic's Business and Information Services division, headed by group executive Barry Sando.
The acquisition goes far beyond CoreLogic entering the LOS marketplace. CoreLogic could potentially use Dorado's cloud computing expertise to consolidate delivery platforms among its myriad of disparate platforms.
For Dorado, the backing from CoreLogic eliminates a common deterrent the company has faced-it's small size. While its technology is targeted to large-scale mortgage operations, those lenders look to vendors with a large, established presence, like competitors Fiserv and Lender Processing Services. As a CoreLogic subsidiary, Dorado can better overcome those objections from potential clients.
The deal is the latest in a string of mortgage technology industry investments, mergers and acquisitions. Since December, two LOS vendors purchased PPE companies and private equity groups purchased MDA Lending Solutions and invested in DocuSign, in two separate deals.
CoreLogic also holds a 16.29% share in origination vendor Ellie Mae and is its largest shareholder. An Ellie Mae spokesperson declined to comment, citing the Pleasanton, Calif., company's quiet period during its ongoing initial public offering. A CoreLogic spokesperson said the Dorado acquisition would have no impact on its relationship with Ellie Mae.
While both are LOS vendors, Dorado's target customer is large lenders, typically those in the top 40 in origination volume.
Ellie Mae's customer base consists of regional and community-oriented lenders.
Since the two vendors cater to different lender clientele, it is possible for CoreLogic's relationships with both companies to co-exist, as it has previously when CoreLogic owned a stake in Dorado.
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