Dark Matter is about to enter a new phase in its brief history as a stand-alone entity, as in April, Sean Dugan, chief revenue officer, will take the CEO mantle over from Rich Gagliano, who is moving into the role of executive chairman.
Gagliano had run Black Knight Origination Technologies for more than a decade. As part of its approval for Intercontinental Exchange to buy Black Knight, federal regulators required the divestiture of both the origination unit, as well as the product and pricing engine, Optimal Blue. A unit of Constellation Software purchased both in separate deals and they now operate independently.
Gina Risso
The Mortgage Builder business, with the loan origination system renamed Nova, which Constellation previously owned, became a part of Dark Matter.
Now, Dark Matter has migrated its LOS systems over to Amazon Web Services infrastructure, the next step in the company’s transformation away from the previous ownership.
National Mortgage News recently sat down with Dugan and spoke with him regarding developments at the company and the mortgage industry at large.
The conversation was edited for length and clarity.
On the leadership transition
Dugan: “The one operative word is continuity and stability. Rich and I worked together for 14 years, sharing a vision. I’m focused on simplifying our platform, administrative capabilities, and lowering origination costs through efficiencies in workflow, AI, and our decision engine. Dark Matter now offers more than LOSs, including a servicing platform, AI/ML tools, and document management.”
Evolving working relationship with Gagliano
Dugan: “It’ll change dramatically, for sure, and that change has already begun. Rich is retiring to spend time with family but will be available via a phone call, to ask for perspective, strategy, history, really anything that I need. We share a passion for delivering top services to clients and employees. He built our company culture, and I’ll continue that path.”
Post-Constellation changes
Dugan: “We’ve transitioned to being a data-driven organization. Every decision is tied to data. Constellation’s network of companies provides real-world solutions for challenges we face, which has been very useful. They’ve got a stable of vectors that they owned over the last 30 years that have likely evaluated and deployed solutions to very similar problems.
“I can think of at least a dozen examples of being put in touch with other business leaders to talk about any number of issues that we’re looking to enhance, to remedy, and getting real world examples of ‘here’s how we evaluated that particular issue, and this is where we landed. You probably want to entertain X, Y or Z, as you come up with your own solution.’ That’s been very, very useful.”
Servicing platform addition
Dugan: “This platform has been around for 30 years, supporting 75+ clients and millions of loans. It handles just about every type of loan type servicing that you can imagine. It’s extremely comprehensive and robust.”
“Those aren’t just our particular viewpoints. We’ve hired third parties to evaluate the system inside and out, and so we feel like we’ve got a really significant, comprehensive platform to offer to the industry.”
“We think competition is key, now more than ever. We’re having a lot of conversations with clients that see the shrinking marketplace of vendors to not be an advantage, but a disadvantage, and so giving clients options, and optionality is what Dark Matter is all about.”
Nova as an independent LOS
Dugan: “Nova and Empower serve different lender types. Nova is easy to implement, while Empower is highly configurable. We’ve got the core document management system. We’ve got Aiva, which is AI and machine learning. We’ve got the servicing platform as well. Each of these products serve different client segments and different customer needs.”
AI in mortgage industry
Dugan: “We all know that is the buzzword of all buzzwords today, whether in the mortgage industry or our world as a whole. I do think that there are two different stories.
“Aiva’s been in production for the past nine years, with millions and millions of documents, millions of data fields that we’ve extracted and bounced against our decision engine and effective workflow change.
“Our intent is to focus on exactly that, really focus on income, assets within documents, classify documents, extract information and effect that workflow. That will be where we focus our continued development of Aiva.”
No plans for generative AI
Dugan: “Things that we’re not going to focus on would include generative AI. However, will that play a role in the industry? Yes, I think it will. I think there’s some really neat stuff that AI can do, whether it be engaging borrowers as they’re applying for a loan to allow them to ask questions and receive answers, or deploy that in other capabilities across the lending continuum, but those are things that are better suited for a true AI focused, 100% focused company.
“We’re going to focus again on that loan fulfillment platform that is the LOS and where lenders want to plug in AI, a portal or whatever the case may be, we’re going to be very focused on opening up our ecosystem.”
Bringing Aiva to servicing
Dugan: “We think there’s a great opportunity. We haven’t made any type of roadmap specific decisions on that, but there’s clearly a value proposition servicing being just as document intensive as origination.”
The next six to 12 months
Dugan: “There’s a keen focus on opening up the ecosystem. We came from Black Knight, which was a closed architecture and ecosystem. That is not the path that Dark Matter will follow.
“We’re launching the developer portal at our user conference, which will occur in April, and opening up the ecosystem so that lenders and vendors alike, to make it far more efficient and cost effective to do business with Dark Matter.
“Simplification will be a motto that you hear from us pretty frequently as well. That means administration. That means user releases. That also means user experience. We’re starting to pick off the most frequently used screens within our platform and applying a brand new user interface.”
AWS migration
Dugan: “It enhances scalability and stability. This completes our break from Black Knight, allowing us to focus on capabilities and clients without legacy constraints.”
“It provides some scalability and stability lift, if you will, for all of our clients, and positions us well for these future capabilities. It also closes the chapter on any type of our past history, we’re in our own infrastructure, we can now focus 100% on our capabilities, our deliverables and our clients, without any other noise that our employees need to deal with, and that is a breath of fresh air. “
Market conditions and 2025 predictions
Dugan: “We’ve built our technology and our business to perform and really thrive in this particular market.
“I think it’s going to be an interesting year. There’ll be these mini refi, not even booms, but markets that occur, I think there’s going to be a lot of movement in rates. I just don’t think it’s going to be dramatically up or down. I also think that the deregulation under the new administration, that’s going to be something that we deal with, moving this from federal likely down to state regulatory entity perspective.”
Consolidation in tech and lending
Dugan: “No. 1, I think there will be continued consolidation of the market. No. 2, we will be a player in that market, and we will look to acquire different products and services that we believe can help and assist us in delivering continued enhancements and innovation to our clients. We will be active in that market.”
New ownership’s M&A philosophy
Dugan: “We’re no longer going to come to the market in a manner that one of our acquired capabilities is a requirement of our ecosystem. By and large, we believe that, again, optionality and competition is really the credo that we want to take forward.”
Dugan’s focus as CEO
Dugan: “I’ve got value, growth and relationship as my three tenets. Value in enhancing platforms simply; Growth in expanding the business; Relationships in engaging vendors and clients. We provide clients with a voice in our roadmap and prioritize their feedback. I’m excited to lead this organization.”
