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April 11, 2018– The mortgage origination industry, a typically staid area of finance known for mountains of paperwork, lengthy procedures and processes, and no shortage of financial middlemen, is bracing for a seismic shift toward blockchain technology. In what is viewed by many as a natural fit, the evolution of mortgage origination to distributed ledger technology (“DLT”) is easily the largest shake-up the institution has ever seen. Many industries have watched their centers of power move from a small cabal to the public-at-large through the introduction of disruptive technologies in recent years. The mortgage market, forever the province of financial institutions, has begun its move away from Wall Street and toward the people as banks look anxiously on.
The world has taken notice as a number of blockchain startups have announced their intent to democratize various aspects of the mortgage process. We spoke with Viva Network CEO Nick Thomson who discussed Viva’s intent to provide “one-stop shopping” for a suite of mortgage-related products and services. “It’s a no-brainer,” said Thomson, “blockchain technology will make mortgages easier to obtain for less money in a shorter amount of time. And it’s not just the borrowers who benefit. Viva’s platform will give individuals access to high quality, asset-backed mortgage products for the first time. Less money going to financial institutions who are no longer needed to obtain a mortgage means more money in local communities. You could call us the Uber of mortgages in that we bring people together for their mutual benefit. It’s truly a situation where everyone wins.”
Indeed, the benefits of the mortgage migration to DLT are sufficient in number as to make it hard to determine who will emerge as the biggest winner. Michael Reyen points out on American Banker that roughly 75% of the world’s population lives on unregistered land, making it impossible for those people to borrow against their home, bequeath it to their descendants, or otherwise make use of their largest asset in ways that many of us take for granted. Reyen sees blockchain as a key part of the solution to this widespread issue. Thomson agrees.
“Viva has begun to reach out to officials in areas of the world where unregistered land is a systemic problem to explore the idea of Viva helping to legitimize the land ownership of the legions of citizens of the world currently left out in the cold with no property rights.”
Based on the speed with which the financial world has already seen sweeping changes made by upstarts like Wealthfront and Robin Hood, it is anticipated that a meaningful number of mortgages will see a rapid move to blockchain in the next two years. With conservative estimates putting the mortgage market at $31 trillion, the far-ranging implications of mortgage origination to blockchain are just starting to come into focus as the world awaits the first “blockchain mortgage”. Thomson concludes, “we expect to be the first to make it happen”.