Dorado is still finalizing the patent that it received approval for this summer, but the San Mateo, Calif.-based cloud computing and Software-as-a-Service developer already has big plans to change the way lenders use technology to process mortgages. Dorado executives attending the MBA annual will continue their movement to bring current and upcoming offerings to the forefront of the origination industry.
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. Since there is no overarching, fixed order of steps, as soon as the requirements are met to start a new task, the system lets it begin.
It’s the second patent approval Dorado’s received in as many years. When the final approval was announced in July, Dorado’s chief technology officer Rob Carpenter heralded it as a validation of the company’s unique approach to solving mortgage origination problems. In a recent interview with National Mortgage News, Carpenter set a precise but lofty goal for the innovation.
“We want to change the market,” he told NMN. “My nirvana would be that my lender partners and Dorado can come to fully understand the capabilities that are in this and fundamentally change the way they do business.”
Carpenter, who has a doctorate in computer systems architecture, and Dorado CEO Dain Ehring are the brain trust beyond the patented technology. Their relationship began well before Dorado’s founding in 1998—they both worked at Sun Microsystems. Carpenter managed the systems architecture for Sun’s Java programming language and Ehring was director of market development and strategic sales for the division.
The climate in the mortgage market makes Dorado’s system more relevant than ever, Carpenter said. The rate of change in compliance and data quality requirements has accelerated over the past couple of years—the Real Estate Settlement Procedures Act put in place at the beginning of 2010, for example—and lenders struggle to keep up with the changes.
It’s only going to continue, with regulations from the Dodd-Frank financial reform legislation. Carpenter added that private secondary market investment won’t return until investors are confident in the level of transparency and data verification lenders can provide.
“The investors are going to increase their demands they’re requiring for transparency and the quality of the assets,” he said.
Because of the fluid order of tasks built into the design of Dorado’s LOS, the developer can add or change new steps, requirements and procedures into the origination process with less disruption than in other platforms. In addition, changes are implemented faster because the LOS is operated “in the cloud.” Instead of a client having to update desktop-based software each loan officer’s computer, Dorado implements updates across the entire platform for its clients.
“We’re able to consume innovation at a faster rate than other architectures and deploy it faster because of the cloud and Web-based nature,” Carpenter said. “When changes occur, we can work to a design solution that meets market needs, allow customers to adapt it to their needs and deploy it quickly.”
The patented technology has applications beyond the LOS platform. A new product Dorado will release next year uses the fluid workflow process to integrate third-party fulfillment vendors like document preparation, title services, appraisals and other underwriting services, with an LOS.
The use of so-called collaborative network services platforms is not new. Lender Processing Services offers integration to its Empower LOS with a product called RealEC. Ellie Mae connects third-party products to the Encompass360 LOS with ePass. But Carpenter said Dorado’s new platform is the next evolution to the technology because it provides connectivity not only to the LOS but also between the different vendor software and lets tasks from each vendor to work at the same time.
“One of the approaches a lender can take is to run their business processes as parallel, semi-independent processes,” Carpenter said. “We’re going to put collaborative workflow on top of it and use this patented technology to bind them together.”
Dorado already has one of the nation’s top 30 mortgage lenders on board to use the new platform and it’s slated to launch publicly early in the second quarter of 2011. Internally, Dorado codenamed the new platform “TransactionMaster”—a play off of the ChannelMaster LOS name—though the final product name will be determined later in the development process.
Dorado is a sponsor of the MBA convention. It will share a booth with analytics firm CoreLogic at the event’s expo, where Dorado officials will demonstrate the patented workflow technology to attendees.
