Ellie Mae, a cloud-based platform provider, announced Monday it signed a definitive agreement to acquire Capsilon, a provider of AI-powered mortgage automation software for lenders, investors and servicers.
This acquisition will accelerate Ellie Mae’s vision to offer a fully digital mortgage. It will combine its Encompass Digital Lending Platform with Capsilon’s AI solutions to create an end-to-end Software-as-a-Service for the mortgage industry.
“With the delivery of our next-generation lending platform, we are accelerating our mission to automate everything automatable for the residential mortgage market,” said Jonathan Corr, Ellie Mae president and CEO. “This includes making strategic acquisitions of best-in-class solutions to bring more value to the platform and the ecosystem faster.”
“This is a significant day for the mortgage industry, as with the acquisition of Capsilon we are bringing together two market-leading companies and adding to our platform the pioneer of AI-powered intelligent automation leveraged by some of the largest lenders and servicers in the industry,” Corr continued. “As lenders and servicers continue to shift toward data-driven automation, we are excited to provide automated document recognition, classification and data extraction to further drive down costs and time of loan origination, acquisition and servicing.”
The process, as it stands now, is very document centric, from requesting documents to created documents to be signed, Ellie Mae Chief Operating Officer Joe Tyrell said in an interview with HousingWire. But with this acquisition, the company hopes to move from a document-centered process to being data-driven.
Capsilon’s AI technology will automatically recognize what a document is, classify it, and extract the data. It can verify income and determine if it meets the requirements of the loan being applied for. If it meets the requirements, it will be sent on to the next step in the process, or if it doesn’t the application will be sent for exception-based examination.
And this could even further advance voice technology, which relies heavily on accessing and understanding data, Tyrell explained. As it stands, it is hard for voice technology to get data from 2D document, and data extraction is currently done manually. But as AI changes how data is viewed and extracted, this could open doors for more technology options in the future.
Capsilon’s AI solutions will verify many parts of the application for lenders including income, employment, W2 and appraisals. Eventually, it could even send an automatic notification to borrowers of approval, or when their loan passes through certain points in the process.
Back in April, Private equity firm Thoma Bravo completed its all-cash $3.7 billion purchase of Ellie Mae.
Since then, questions have circled about whether the company will slow down. But if this acquisition proves anything, it’s that Ellie Mae is not done innovating. In fact, Tyrell said acquisitions are more difficult as a public company, and that being acquired by Thoma Bravo has enabled the company to move forward.
“We’re still here and firing on all fronts,” he said.