United Wholesale Mortgage UWMC has announced plans to become the first national mortgage lender to accept cryptocurrency for home loans.
What Happened: CEO Mat Ishbia previewed the Pontiac, Michigan-based company’s expansion into the cryptocurrency realm during the second-quarter earnings call on Monday.
“We’ve evaluated the feasibility, and we’re looking forward to being the first mortgage company in America to accept cryptocurrency to satisfy mortgage payments,” Ishbia said. “That’s something that we’ve been working on, and we’re excited that hopefully, in Q3, we can actually execute on that before anyone in the country because we are a leader in technology and innovation.”
In an interview with the Detroit Free Press, Ishbia offered more details on which cryptocurrencies would be considered in transactions.
“I think we’re starting with Bitcoin, but we’re looking at Ethereum and others,” Ishbia said. “We’re going to walk before we run, but at the same time, we are definitely a leader in technology and innovation and we are always trying to be the best and the leader in everything we do.
“That’s the plan,” he added. “Obviously there’s no guarantees – we’re still working through some details. But absolutely.”
Why It Matters: One of the first homebuying deals in the U.S. involving cryptocurrency took place in 2014 with the $1.6 million sale of land in Lake Tahoe for a home site. The transaction was completed with payment via Bitcoin (CRYPTO: BTC).
However, the heavily regulated and risk-averse mortgage industry hasn’t embraced cryptocurrency. The government-sponsored enterprises that dominate the industry’s secondary market, Fannie Mae FNMA+ Free Alerts and Freddie MacFMCC+ Free Alerts, will not accept any transaction in a digital asset.
If UMC plans to package its cryptocurrency-based loans for secondary market sale, the borrower’s cryptocurrency payment would have to be converted into dollars and the borrower would need to provide documentation to verify ownership of the digital assets as part of the loan underwriting process.