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Big News: LOS Gets Acquired

Chronos Solutions, a national real estate finance services provider, has agreed to acquire Cogent Road, a San Diego-based mortgage technology company.   The acquisition will allow Chronos to expand its suite of products and services supporting mortgage lenders as well as add a deep bench of mortgage technology talent. Here’s the story:

Cogent Road develops three core products for the mortgage origination market. The first, Funding Suite, (http://www.cogentroad.com/funding-suite) is a premier credit and data purchasing platform designed for mortgage lenders.  Funding Suite not only provides credit information but does so in a format that allows lenders to analyze ways to improve a borrower’s credit real time as well as tracks spend at the loan level.  Tax Door (www.taxdoor.com) is a fully automated tax transcript solution that allows users to order verified income data via Internal Revenue Service tax transcripts without requiring signed 4506Ts. Tax Door has a 100% success rate, where the industry is used to one in the 15% range. The third, Roohmz, is one of the leading loan origination systems in the industry.

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According to Chronos Solutions CEO, Matt Martin, the acquisition adds over 300 customers to the Chronos family and further supplements its broad existing suite of origination services. “Cogent Road offers an incredible array of superior origination technology,” he said. “The combination of these products with Chronos’ already-formidable suite of origination solutions empowers us to deliver end-to-end service to originators of any size.”

Cogent Road CEO, William DiPaolo, agrees. “Cogent Road prides itself on delivering flexible, robust technology designed to move the origination industry forward,” he said. “In collaboration with Chronos’ wide variety of services and resources, we can deliver at elite levels virtually any service a mortgage lender might require.

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Martin further stated that Chronos intends to grow the Cogent Road acquisition into a mortgage and real estate technology lab, based in San Diego.  “We expect to announce multiple new products and services in the coming year with the help of Cogent Road’s talented team.”

This transaction marks the second acquisition for Chronos Solutions this year.  In January, the firm acquired Realtybid.com, a leading online real estate auction marketplace.  Martin notes that, since the acquisition, Realtybid has grown by 800% as a part of the Chronos Solutions family.  “We expect to achieve similar levels of growth and success with Cogent Road as well,” he said.

Financial terms of the transaction were not disclosed. Holland & Knight LLP served as legal counsel to Chronos Solutions, while Stinson Leonard Street LLP served as legal counsel to Cogent Road.    Berkery Noyes served as exclusive strategic and financial advisor to Cogent Road.

Newsflash: A New Technology Subsidiary Debuts

Taxdoor, a new division of Cogent Road Inc., has introduced its flagship product—Taxdoor— a SaaS tool that will make ordering IRS transcripts as simple and easy as ordering a credit report. Cogent Road plans to introduce its Taxdoor division during the National MBA conference in October.

Taxdoor solves a significant problem that lenders face—the time consuming and inefficient process of verifying a customer’s stated income with tax transcripts from the IRS. This typically involves the collection of a signed 4506T form from applicants, which must be reviewed and matched to the correct tax order and delivered to the lender’s tax vendor. (If 1040s and W2s are needed, two signed 4506T forms are required.) If the 4506T has any errors, such as an incorrect match of applicant’s address to tax year, the IRS will reject the order, requiring a repeat of the entire process.

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Taxdoor is the streamlined Internet/mobile solution to obtain accurate IRS transcripts within 48 hours and without the need a signed 4506T form upfront. When the tax transcript is requested, the applicant is instantly notified via text and/or e-mail and uses a smart phone, tablet or PC to verify or update their addresses for each tax year requested. Upon verification, Taxdoor creates correctly populated 4506Ts based on IRS regulations, which are then digitally signed in accordance with Federal e-sign regulations. Once signed, the 4506Ts are automatically delivered to the IRS electronically in order to authorize the release of the requested tax transcripts. As soon as it’s received by the IRS, the request is processed and the lender receives the transcript within in 48 hours.

“Ordering tax transcripts has always been a labor-intensive process for lenders; one that is subject to time-consuming errors, rejections and processing delays,” said Joe Dahleen, Taxdoor President. “We have the technology to change that and borrowers are eager to adopt it. We developed Taxdoor to be a lender-friendly way to mitigate risks, increase overall production and eliminate 4506T related labor costs and reduce processing problems for everyone involved in the loan transaction.”

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One of Taxdoor’s key benefits is the ease with which borrowers are able to authorize the release of their tax transcripts. Lenders simply place transcript orders electronically and no longer need to invest labor into the burdensome process of collecting, reviewing and delivering signed IRS forms. Taxdoor efficiently manages the entire 4506T signing process on behalf of its lender clients, ensuring that the IRS forms are completed, signed and delivered in full compliance with IRS policies. In addition to the requested tax transcripts, Taxdoor also ensures the lender receives the signed 4506Ts.

“Not only does Taxdoor significantly enhance the borrower experience, but lenders can now easily obtain IRS verified income data earlier in the qualification process,” said Dahleen. “Lenders and loan originators will be able to highlight this solution as one of their special service features.”

For additional details about Taxdoor, visit www.taxdoor.com