Blockchain for mortgages_ compelling, but premature_ – coindesk

If there’s an industry that cries out for the efficiencies and data integrity that blockchain tech promises, it’s undoubtedly the US residential mortgage business.

First off, there’s the size of the business. Bitcoin chart live At last count, according to the Federal Reserve, there were about $10tn-worth of residential mortgages outstanding, with about $2tn in new loans being originated in a good year.

“A mortgage application requires hundreds of documents and very sensitive data,” Leo Loomie, senior vice president of client services at Digital Risk LLC, a mortgage processing provider, told CoinDesk.

Bitcoin digital currency “W-2s, income statements, asset statements, bank statements, Social Security numbers – and all of that has to change hands numerous times over a variety of channels: fax, email, mobile phone.”

Mortgages are complex financial instruments, agrees Jason Nadeau, executive vice president at blockchain startup Factom, writing in a recent issue of MReport, a mortgage industry publication.

“To process a mortgage from start to finish, you’re looking at many documents, all with multiple versions, created by multiple parties and multiple entities editing and revising. 7 bitcoin to usd Combined, that could be thousands of document versions, data points, all variable to revision,” he said.

And that’s just at the front end, so there’s increasing interest in how blockchain might be able to solve real-world workflow problems in real estate.

“The mortgage use cases for blockchain are super interesting,” Loomie said, indicating he is optimistic about the technology and its potential.

“These are high-dollar transactions that are very painful. Bitcoin open source And anytime you can remove friction from the process is where you’re going to get traction.”

So, how exactly will blockchain benefit the mortgage business? Experts see three ways in which they believe the industry could be impacted: Better recordkeeping

In a June 2016 report, Pamela Johnston, principal and partner, and Tim Davis, managing director for banking and capital markets at PwC, assert that blockchains could provide “immutable proof” that loan estimates were sent within timelines required by regulation.

“In the mortgage servicing process, blockchain could track the movement of payments. Bitcoin as a currency And in the secondary markets, it might provide transparency about the ownership of underlying assets,” the report said, continuing:

He indicated that blockchains could help ensure documents and data are “vetted through compliance checks” with “proof built directly into the process”. Bitcoin dollar chart Information sharing

Loomie noted that the ability to create a “fingerprint of your mortgage” that can be transferred “instantaneously” between institutions is equally appealing.

Eli Stern, partner at Ernst & Young, sees this benefit as well, noting that blockchains could take out the “operational heavy lifting” in mortgage markets.

“All of the due diligence, all of the reporting, all of that could be streamlined and to some extent all of the effort around it would be removed. Bitcoin exchange no verification That would just tremendously streamline the whole process – from asset origination all the way through to securitization execution,” he said.

“It’s become tremendously cumbersome for securitizers,” Stern told CoinDesk. Bitcoin price cad “Having data that is completely reliable and instantly accessible would make complying with all of this regulation just so much easier and reduce costs and make everything faster.” Cost savings

Reducing costs will likely be the driving force behind mortgage industry adoption of blockchain. Bitcoin checker “When you talk about instantaneous and secure, you are talking about cost reduction,” Loomie said.

Capgemini Consulting, in a recent report, entitled estimates those savings could amount to 11% to 22% on average processing fees per loan of $4,350, or about $480 to $957 per loan.

While a lot of those savings will be passed on to the consumer, some of them will be retained by industry participants, meaning mortgage banking should become a more profitable business, according to Loomie. Historical price of bitcoin Testing underway

In October, Bank of China and HSBC began testing blockchain tech on a property valuation system for home loans in Hong Kong – one the banks said they plan to go live with shortly.

“Appraisals are a nightmare right now. Bitcoin value prediction Turn times are way up. Bitcoin value 2020 If you see Bank of China and HSBC implementing it, it’s the real deal,” he said. Bitcoin account Evolution, not revolution

Nevertheless, depending on how and where it is used, experts say blockchain for mortgages could be just around the corner, or it could be years away.

The best way to look at it, then, might be to see it as an evolutionary process, not a revolution that will transform the industry all at once.

“System and technology transformation is a very time-consuming process and blockchain technology isn’t free from that,” notes Angus Champion de Crespigny, financial services blockchain and distributed infrastructure strategy leader at EY.

Loomie agreed. Bitcoin 1 year chart “People are still trying to confirm for themselves that this is a real secure enterprise-grade solution. B bitcoin It‘s also a complicated product and idea. Bitcoin price evolution It’s not something that’s easily grasped,” he said.

“The reality is, for this to work it’s going to take some thought and time,” Bart Cant, founder and community leader of Capgemini’s blockchain practice, told CoinDesk, adding: