The next time you apply for a mortgage, or your lending services lend or sell it in the secondary market, you may be helping to disrupt an industry. Indeed, the whole transaction, or at least part of it, could be powered by blockchain in the not too distant future.
Blockchain – defined more simply as a decentralized, immutable digital ledger – is perhaps best known as the technology behind digital currency. But blockchain is also increasingly adopted by technology companies in the mortgage industry looking to revolutionize and disrupt the industry.
“There are many different use cases, from information sharing in the original ecosystem to service to securities and capital markets,” said Debbie Hoffman, CEO and Founder of Symmetry Blockchain Advisors in Orlando, Florida. “The mortgage has a very long supply chain, from the initial marketing and purchase of a home, to granting a loan, servicing a loan, selling a loan and the aftermarket, and in each of those sectors there are areas where you could have a blockchain. “
The benefits of blockchain are prompting disruptive companies to integrate it into their operations. Hoffman said that blockchain makes the process of creating a mortgage simpler, easier and cheaper because blockchain allows information to be shared, so the cost of producing the loan is lower – an economy that , according to players, will be passed on to the consumer. For investors, the benefit of blockchain is precision – the chances of having defaults in the loan are lower, Hoffman said, because there is less input along the way and transparency in the process. . “These are the two areas where I see tremendous value,” she added.
While the change is happening slowly – “unfortunately there hasn’t been a lot of progress, unfortunately,” Hoffman said – some companies are already using blockchain or are about to launch new technology incorporating it in 2021. .