Candor announced today that it has secured $12.5M in a Series A investment. The effort was led by Arthur Ventures, a leading early-growth capital firm focused on high-growth, capital-efficient B2B software companies. The investment will further enhance the company’s patent-pending Loan Engineering System™, the only machine that autonomously makes income, asset, and lending decisions that are backed by a defect policy.
Candor’s Loan Engineering System (LES) has been turning chaos into consistency. The consistency of Candor’s LES is due to a unique innovation: Candor’s Mortgage Decision Science Technology™ which is a machine intelligence platform. Using Candor’s LES, achieving borrower surety has been transformed from a queue-based, human-touch, error-prone process into a fully automated decisioning process driven by science. That science offers structure and consistency; it correlates the loan attributes and borrower characteristics with results, creating high quality outcomes and exceptional transparency. Candor’s LES has fundamentally changed the way a loan is manufactured by eliminating the queue and garnering downstream ROI.
“In the design, development and deployment of Candor, we set out to revolutionize the economics of how mortgages were made,” said Thomas Showalter, Founder and CEO of Candor. “Candor’s Loan Engineering System satisfies the three primary directives of mortgage lenders: 1) service borrowers, 2) deliver quality loans to the secondary market customers, and 3) render increased value to shareholders. Lenders can now address all three with confidence.”
Candor’s Loan Engineering System is organically different from the alternatives currently available in the marketplace. When competitive technologies run into issues, these systems kick problems over to a human to analyze and to provide a solution. The person then decides what to do with the loan and why, hoping to move the loan closer to closing. This process adds time and unnecessary complexity. More importantly, it adds inconsistency, bias and error. Borrower frustration is high and mortgage defects are prevalent. Time to “surety” is measured in weeks, possibly months, which can cause extreme borrower dissatisfaction.
In contrast, Candor uses its homegrown Mortgage Decision Science to analyze problems, take steps to resolve problems and make the necessary decisions to move the loan to closing. With Candor, lenders (and borrowers) reach time to surety quickly, in just one day.
Candor’s Mortgage Decision Science Technology leverages a patent pending logical infrastructure made up of 37,741 decisioning steps (which is expanding daily). Each decision step, called a “pivot point,” is a very narrowly defined problem. When Candor LES encounters a “pivot point,” it responds dynamically, always in sync with the context of the problem, always choosing the right course of action and always advancing toward a valid solution.
Candor gains an additional advantage by employing proprietary aerospace technology to virtually eliminate mortgage defects. This is the same technology that enables aerospace systems to perform at their incredible level of reliability. In these systems, more than 1.0 million components operate together, flawlessly for thousands of flight hours. To date, after 1.0 million underwrites, there are no repurchase claims on Candor Certified loans.
“Candor has solved an extremely difficult problem in the mortgage industry,” said Patrick Meenan, General Partner at Arthur Ventures. “They have taught a machine to think like an underwriter. This has enabled Candor clients to make revolutionary improvements in the economics of making a mortgage. And their leadership team is first rate.”
“Arthur Ventures shares our conviction and dedication to business modernization and is enjoying Candor’s rapid capture of market share and market position,” said Mark Hinshaw, President, Candor. “Most importantly, Candor already has implemented more than three dozen clients and is adding new clients daily.”
About Arthur Ventures
Based in Minneapolis, Arthur Ventures leads investments in high-growth, capital efficient B2B software companies in every region across North America. Learn more at https://www.arthurventures.com.
Candor’s Loan Engineering System is in a category all its own: Mortgage Decision Sciences. The first of its kind risk analysis, identification, and mitigation machine empowers lenders to optimize their workforce and positions them for the type of sweeping process innovation that fundamentally improve the economics of making a mortgage.