The process of originating a loan requires a cautious analysis of many factors in order to minimize the possibility of a default. This results in a rather complex and lengthy process, which follows a specific business logic.
What is Homelend
Homelend is a blockchain based mortgage crowdfunding platform
Mortgage Value Chain
The mortgage value chain consists of three distinctive stages or phases:-
- Origination: The process of applying for and closing a mortgage loan.
- Servicing: Involves executing the obligations that arise from the loan during its lifespan
- Securitization: The issuing of financial instruments called mortgage- backed securities
Both servicing and securitization take place after origination has been completed.
Any mortgage loan, to be successfully originated, must follow a pre-determined path.
From the moment when a potential buyer of a property applies for a loan, to the actual closing of the mortgage loan and transfer of the property from the seller to the buyer, a series of business processes take place. These processes are instrumental. They are subordinated to three main objectives, issuing a loan that:
From the moment when a potential buyer of a property applies for a loan, to the actual closing of the mortgage loan and transfer of the property from the seller to the buyer, a series of business processes take place. These processes are instrumental. They are subordinated to three main objectives, issuing a loan that:
- makes possible the purchase of a property;
- can be successfully paid back by the borrower;
- can be recovered to a satisfactory extent in case of default.
Market Problem
- Due to the sheer number of documents and parties involved, mortgage origination is usually a lengthy process, averaging close to 50 days.
- Gathering all the required documents for a mortgage application, (including bank statements, pay stubs, tax returns, etc.) can be very time-consuming for the borrower.
- Filling the application form requires attention to detail, and many applicants aren’t familiar with the terminology or don’t understand many important concepts.
- The complexity of the mortgage origination process cannot be avoided. Each step, document, activity, etc. is there to protect the interests of the lenders and the borrowers.
- The health of the credit system depends largely on the avoidance of defaults and delinquencies. Thus, determining the creditworthiness of the borrower and the value of the collateral are crucial.
The Solution
Depending on the blockchain and smart contracts will change the mortgage system:-
- The distributed ledger, accessible by all parties, would enhance transparency, efficiency and reliability in the access to information contained in the documents handled during mortgage origination. Inconsistencies in the data available to each actor (appraiser/insurer/ loan officer, etc.) would be reduced to zero if all documentation was stored in a distributed database, immutable and equally accessible.
- Storing information obtained from previous documents in an unalterable and consistent way, blockchain technology allows for the processing of transactions, generating records that are immutable and easily accessible.
- All information created and stored would be kept private, only accessible to the parties involved in the origination process, according to their needs.
Homelend Platform
- Homelend P2P platform works by embedding mortgage lending business logic into smart contracts. This is the platform’s core functionality. By creating a set of smart contracts that execute business processes, Homelend allows individuals to borrow money from their peers in a trusted, transparent, and secure way.
- The key idea is that borrowers and lenders are not linked by means of a financial intermediary (i.e. a bank or a centralized P2P lending platform), but rather by smart contracts that automatically execute a pre-defined business logic.
Finally
While numerous blockchain-based P2P lending platforms have been developed for microloans and consumer lending, no such platform exists for the mortgage market. The mortgage industry is especially susceptible from a financial and social perspective.
Loans are considerably larger, and defaulting can create undesirable circumstances for individuals and families, in the case of a foreclosure. For this reason,
the process of originating a loan requires a cautious analysis of many factors in order to minimize the possibility of a default. This results in a rather complex and lengthy process, which follows a specific business logic.
Loans are considerably larger, and defaulting can create undesirable circumstances for individuals and families, in the case of a foreclosure. For this reason,
the process of originating a loan requires a cautious analysis of many factors in order to minimize the possibility of a default. This results in a rather complex and lengthy process, which follows a specific business logic.
Blockchain technology creates new possibilities for P2P lending. It’s now considered the next step in digital ledger technology (DLT), after decentralized money payments surged in the form of bitcoin and other crypto-currencies. Indeed, the immutability, transparency, and security provided by DLT makes it possible to record transactions, among them loans, without banks or other financial entities acting as middlemen.
✅Website: https://homelend.io/
✅Whitepaper: https://homelend.io/files/Whitepaper.pdf
✅Twitter: https://twitter.com/homelendhmd
✅Facebook: https://www.facebook.com/HMDHomelend/
✅Reddit: https://www.reddit.com/r/Homelend/
✅Telegram Group: https://t.me/HomelendPlatform/
✅Bitcointalk ANN: https://bitcointalk.org/index.php?topic=3407541
✅Whitepaper: https://homelend.io/files/Whitepaper.pdf
✅Twitter: https://twitter.com/homelendhmd
✅Facebook: https://www.facebook.com/HMDHomelend/
✅Reddit: https://www.reddit.com/r/Homelend/
✅Telegram Group: https://t.me/HomelendPlatform/
✅Bitcointalk ANN: https://bitcointalk.org/index.php?topic=3407541
Author of article:
✅Bitcointalk username: Erik_Smuel
✅Bitcointalk profile link: https://bitcointalk.org/index.php?action=profile;u=2020517
✅Bitcointalk username: Erik_Smuel
✅Bitcointalk profile link: https://bitcointalk.org/index.php?action=profile;u=2020517
