United Wholesale Mortgage wants to take payments in cryptocurrency by late 2021. The point? To be the first mortgage company to take the plunge. “I’m not going to sit here and wait for everyone else to do it and then follow,” CEO Mat Ishbia told Julie Hyman for Yahoo Finance.
The CEO first broke the news on its second-quarter earnings call in August, mentioning Bitcoin and Ethereum as top currency candidates.
UWM’s core business involves underwriting loans for mortgage brokers. Nearly a million homeowners send money to UWM every month, and many of them make their monthly payments through the company’s website.
Will UWM Borrowers Jump at the Opportunity to Pay Their Mortgages With Bitcoin?
Whether the idea will find adherents remains to be seen. Certainly, many UWM customers are big crypto holders. But that doesn’t mean they want to part with their digital assets. At the moment, the idea is a novelty, commentators point out. It’s is likely to draw more attention than actual use of crypto.
But Ishbia isn’t flinching. “We have 1,200 tech people. We have the best innovation team in the country,” the CEO states.
“And so crypto is just one example. I’m looking at NFTs. We’re doing some things with bots.”
Not that Ishbia is keen to hold cryptocurrency on UWM’s balance sheet the way Michael Saylor’s MicroStrategy holds it. UWM investors are likely to be more wary of the volatility that comes with digital assets. At this point, MicroStrategy’s investors are aligned with the concept of bitcoin as the future of money.
What will UWM do with its crypto, then? Ishbia says the company will just convert it into dollars. A lot of UWM’s customers would like to make payments from crypto accounts, Ishbia posits, but would not want to convert the asset themselves.
In Other News, Maker Will Enable the Leveraging of Real Estate to Finance Loans
Speaking of the future of money, Citi Group is comfortable putting cryptocurrency in that asset class. Citi discusses Dao, created as a stablecoin to avert volatility.
Real estate is meshing with the blockchain sphere through Dao, as its protocol can let people place real property on the blockchain, then borrow against it. The Maker protocol, which uses smart contracts on the Ethereum blockchain, enabled $38,000 of Dai to finance a mortgage loan in April 2021. This introduced a new tool for financing for U.S. buyers who renovate and flip homes.
Does this make the Maker protocol a mortgage lender? If so, it hasn’t applied for a FDIC backing. Nor have people using this method been subject to risk vetting. Regulators? It’s your move.
The Challenge and Potential
Blockchain is meeting the real estate world in ways from the simple to the complex. Firsts happen regularly. Sometimes they’re whimsical. Sometimes they raise eyebrows.
But the overlap of mortgages and blockchain is not, in itself, new. For example, the Russian central bank has contemplated placing mortgage documents on a government-backed blockchain called Masterchain. The Russian cryptographic ledger is based on the Ethereum blockchain. The federal deed registry and title insurers are expected to connect with the ledger. Major banks have tested the concept for several years.
Around the world, little by little, regulatory questions will be faced and decided. Applications will become familiar. Particularly as younger generations seek new forms of wealth creation, blockchain-based assets are poised to play varied roles. At this moment, blockchain’s potential to change the way we relate to finances seems limitless.
Supporting References
JC Reindl for the Detroit Free Press: UWM Sees Business Growth, Says It Plans to Start Accepting Bitcoin for Mortgage Payments (Aug. 16, 2021).
Yahoo Finance: UWM to Accept Crypto for Mortgage (video and transcript of Julie Hyman interviewing Mat Ishbia; published Aug. 18, 2021).
Danny Nelson for CoinDesk.com: U.S. Mortgage Lender UWM Plans to Accept Bitcoin Payments (Aug. 17, 2021).
Muyao Shen for CoinDesk.com: Maker Price Passes $4K for First Time, as MakerDAO Brings Real Estate to DeFi (updated Apr. 22, 2021).
Anna Baydakova for CoinDesk.com: Bank of Russia Wants to Put Mortgage Issuance on a Blockchain (updated May 28, 2020).
Ledger Insights: Russia’s Second Largest Bank Issues Guarantee on Blockchain (Dec. 17, 2020).
Image credit: PIRO4D, via Pixabay.