Is a crypto mortgage even a thing in 2022?

 

My friend Jeff Taylor who’s the founder of Digital Risk and a Mortgage Bankers Association board member did a good 3-minute drill on crypto mortgage and crypto in housing with Maria Bartiromo today. Link to video below, and here are a few important notes on core themes he covered:

– Despite all the crypto mortgage headlines, you can’t make your mortgage payment in crypto yet

– There are exceptions to this but mainstream mortgages you’d actually want don’t allow it yet

– Why? Because these loans are backed by Fannie Mae and Freddie Mac, which is what gives them safe, long terms at the best possible rates

– As for how crypto mortgage concepts relate to down payments, there are some plays where you can pledge your unsold crypto as collateral to get a low- to no-down home loan

– But these are also niches and total volume on such loans is in the mere millions, which is almost non-existent compared to the $3.9 trillion in new U.S. mortgage loans made last year

– Using crypto for monthly payments or down payments will continue to evolve, but it’s a long way before it’s mainstream

– Then there’s more fundamental blockchain disruption of the entire mortgage market

– Early use cases using home equity lines of credit (HELOCS) have proven mortgage loans can run on blockchain from origination through securitization, saving 100+ basis points in the process

– HELOCs are mostly second-lien mortgages so this is an early use case.

– But if this crypto mortgage use case can be proven in 2022 with first-lien mortgages, then it’s off to the races.

– A November 2021 webinar I did with Figure’s Mike Cagney and Sagent’s Dan Sogorka on How Mortgage Blockchain Will Go Mainstream In 2022 was HousingWire’s most-watched webinar last year, and it holds up well.

– Comment below or ping me with any crypto mortgage questions