Crypto (decentralised) Financed Mortgages?

Anyone heard of or thought about a mortgage industry without a bank involved? I would be interested in articles or links on to how this could work with blockchain infrastructure? Could you imagine the time and $$$ we could save?

 

APRA will be the problem.

 

More importantly, logistically how would it work ?

 

I can't imagine borrowing using crypto currencies. Far to volatile, it would be insane to do this.

The banks have been looking at block chain technologies to track transactions. It's probably a long way off but some sort of implementation is likely coming.

 

I cant see speculators who like bitcoin lending their coin to get returns less than 2%

 

No. The going rate is around 6% returns on lending your bitcoin

 

Non-bitcoin Defi crypto possibly. Visa, Mastercard, along with Paypal are already onboard the crypto train. Soon enough paying for your everyday online purchases with crypto could be the norm.

The rudimentary proof of concept has been illustrated by that Nissan dealership in Florida accepting Dogecoin for new car purchases. But they hedge against price volatility by asking for 25% more than the current market price (in crypto); so if someone were to convert their dollars to Doge just to purchase a car for the novelty factor they'd be essentially paying 25% more on the price. It rewards the long term holders who may have bought Doge when it was well under current market price and could buy a new car with say something that cost them only $1000 3 years ago.

I can't speak for others, but I'm currently in the crypto sphere in order to build up a deposit to purchase my next property; so I definitely see the appeal of developments in this sector. Heck, I daydream about being one of the first to list a house for sale, with the price in ETH or BTC only. Ignore/block any enquiries asking what the equivalent price is in AUD - I'm not interested in fiat currency. Crypto only. Way of the future!

 

You can list a sale asking for BTC or ETH. If you want few willing buyers.. But as an additional sale payment basis - sure why not. You could also list it and ask for payments in cattle, steel or coffee beans. I question why anyone whould seek to sell a major asset and limit the means of payment to something that few own and no lender will settle on. Crypto isnt "currency" as such. Its a form of stored value that can be converted to cash after some effort and some costs and risks of + / - in value. You could also ask for payment in Swiss Francs but that too will limit purchasers and complicate matters.

I also question what is the contract consideration ? With cash its well accepted that the value today and in 45 days is largely identical. With cryto there may be variance and it could be material. Some states (eg QLD, SA) may restrict the consideration to cash or gold. You are committing a transaction to your choice. If you want BTC you can always take the cash and buy BTC / ETH as you wish. Thats your choice and trying to find a counterparty to a property who has an opposing view on the movement in BTC over the 45 days and who doesnt need to borrow and who understands BTC are a lot of maybe's. And then maybe the agent wont play the game . Or the solicitor. And at the end of the day the sale will need to be converted to "money" for tax purposes anyway.

This is why "money" make a excellent basis for transacting and barter is less favoured.

 

Pioneering Aussie engineer refinances home loan using DeFi in a single day

A software engineer has taken decentralized finance to a new level of practicality, by paying off his mortgage with Commonwealth Bank of Australia and refinancing the loan through fixed-rate lending protocol Notional Finance.

The move marks a major step for the fledgling DeFi sector and more fixed-rate lending protocols in DeFi may attract additional users seeking mostability in longer-term investments and loans, such as mortgages. Currently, the ecosystem is largely populated by yield farmers looking for quick gains on their crypto collateral.

The DeFi engineer attempted the process through TradFi by seeking an offset loan, which directs a savings account’s interest towards paying down a mortgage.

PS: DeFi and crypto in general is extremely risky, #buyerbeware

 

Thanks Legend..... This is exactly what i was pointing to.... lots of potential here...