Since their invention by anonymous cryptocurrency developers, blockchains have been used in areas from banking to government ID verification to decentralized technology as seen in smart devices, to provide large-scale coordination without sacrificing privacy or security. A major innovation in computational mathematics, blockchain has given new possibilities to systems of all kinds to think beyond a centralized system into a platform with maximum transparency and security. Because of this, there have been many companies in recent years taking advantage of these new ideas to bring blockchain-based platforms to many industries, including mortgage tech. Here are two of the biggest blockchain mortgagetech companies.
Liquid Mortgage is a blockchain platform founded in 2018 in Denver, Colorado. Due to the nature of blockchain, all transaction data is public, leading to totally transparent terms for borrowers, no ability for lenders to manipulate financial data, and no need for intermediaries like brokers or notaries to verify the transactions or connect the lenders and the borrowers, since all of them are simply nodes on the blockchain. It is the same system as Bitcoin, where as long as you are on the chain, you can give loans to any publicly registered address, although obviously to comply with legal requirements you have to be a registered lender to lend on Liquid Mortgage. All payments are made and verified through the blockchain. Liquid Mortgage also owns tools which allow borrowers to keep track of their loans.
Homelend is a Switzerland-incorporated peer-to-peer lending, blockchain-based platform. Homelend, like Liquid Mortgage, seeks to move the mortgage process into a blockchain-based platform. Unlike Liquid Mortgage, Homelend seeks to crowdfund mortgage loans using their own custom Ethereum-based cryptocurrency, HMD. This cryptocurrency provides access to the platform, and can be purchased via other major cryptocurrencies, such as Ethereum or Bitcoin, along with US Dollars. The platform is still in its beginning stages. The 1.0 platform was being tested in 2019. You can buy their cryptocurrency, though, and it is sellable in any online crypto market as well as useable on Homelend’s platform.
To conclude, there are many opportunities for mortgage companies to develop the industry using blockchain technology. Homelend and Liquid Mortgage are two of the biggest companies exploring these possibilities today, and offer two very different ideas and visions for unbrokered, blockchain-based platforms. The distributed ledger system allows for greater transparency and efficiency on all sides, and will hopefully create a smoother, more affordable home loan process for everyone.