{"id":2131,"date":"2022-04-05T10:00:00","date_gmt":"2022-04-05T14:00:00","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=2131"},"modified":"2024-04-25T23:18:46","modified_gmt":"2024-04-26T03:18:46","slug":"blockchain-cryptocurrencies-and-residential-real-estate","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/blockchain-cryptocurrencies-and-residential-real-estate\/","title":{"rendered":"Blockchain, Cryptocurrencies, and Residential Real Estate"},"content":{"rendered":"\n
\"Blockchain<\/figure><\/div>\n\n\n\n

Spring 2022 Update<\/em><\/strong><\/p>\n\n\n\n

Cryptocurrency adoption has been on a steady upward trend. So has its blockchain-based technology. The blockchain is a database that preserves indelible records. Each block in the chain contains proof of individual claims and transactions that have happened or that will happen in the future.<\/p>\n\n\n\n\n\n\n\n

In the United States alone, about 27 million people are invested in some form of blockchain tech. No wonder mainstream companies are looking for ways to embrace blockchain-based assets.<\/p>\n\n\n\n

Today, we can use bitcoin for a booking through Expedia, or a game from Microsoft. AT&T lets people pay their phone bills in bitcoin. Sports events are beginning to accept it, as are political campaigners and pizza shops. Major payment apps including PayPal and Square (renamed Block for its blockchain focus) are firmly on board. Fidelity offers cryptocurrency funds for regular IRAs.<\/p>\n\n\n\n

What about real estate? The connection is happening. We recently highlighted Propy, a company that tokenizes homes using blockchain technology<\/a>, enabling complete real estate transactions through smart contracts. These digital contracts allow people to exchange assets in a transparent way that eliminates bureaucracy.<\/p>\n\n\n\n

In due course, home loans based on crypto will be available too.<\/p>\n\n\n\n

The Emergence of Crypto-Backed Mortgages<\/h2>\n\n\n\n

The online mortgage company Home Lending Pal stores it clients\u2019 data on the blockchain ledger. Home Lending Pal encourages lenders to adopt blockchain technology<\/a> for two key reasons. It\u2019s transparent. And it\u2019s secure. \u00a0<\/p>\n\n\n\n

Windermere Chief Economist Matthew Gardner recently noted<\/a> that a company named Milo offers its real estate clients crypto-backed, 30-year mortgages. Borrowers don\u2019t have to sell their bitcoin (and incur taxes) to get them. They can simply pledge their Bitcoin as loan collateral. Instead of the FICO credit score, Milo uses a ratio based on the desired home value versus the income and cryptoassets owned by the applicant.<\/p>\n\n\n\n

Borrowers may pay off the loan in traditional money or with bitcoin. The company hedges its bets: the interest rate is variable (based on the value of bitcoins), annually adjusted, and can be as high as 8%. And the buyer must keep the home at least three years, or face pre-payment penalties.<\/p>\n\n\n\n

It\u2019s possible, Gardner warns, that borrowers \u201cmay be caught out\u201d by a significant bitcoin dip that raises a loan\u2019s interest rate.<\/p>\n\n\n\n

Gardner\u2019s verdict on Milo\u2019s innovative mortgage? \u201cAll in all, it is an interesting model, but it is still in its infancy.\u201d<\/p>\n\n\n\n

Smoothing Out the Rough Edges of the Title Search<\/h2>\n\n\n\n

There\u2019s plenty of room to improve the current process of deed and lien recording. How is today\u2019s typical title search much more complicated than it ought to be?<\/p>\n\n\n\n