The Russian subsidiary of the Austrian lender Raiffeisenbank has run the country's first ever mortgage deal on blockchain. It could be a taste of more to come in the nation. In the transaction, a mortgage contract was issued as an xml document containing all relevant information, including data on the mortgage loan issuer, the borrower, date and place of signing the deal, the total amount of the loan, and the repayment period. The use of blockchain for mortgage loan issuance is set to increase the safety of data storage, cut depository costs, and speed up transactions for both borrower and lender, Raiffeisenbank said in announcing the deal. Normally, after sealing a mortgage deal, the borrower has to visit the bank again to deposit the mortgage contract, while the application of blockchain allows the borrower to do it remotely, also cutting the amount of paper documents.
Global banks that have a large mortgage business are facing pressure internally and externally to upgrade their operating model to save money, decrease processing times and enhance the customer experience – today it can take more than 60 days to complete a mortgage transaction. The pressure is particularly strong with FinTechs like US online lender Rocket Mortgage and UK digital mortgage broker Trussle creating a completely digital experience for prospective home buyers. Banks, therefore, are exploring everything from mature technologies like Optical Character Recognition (OCR) to more leading edge and high-tech solutions based on blockchain and artificial intelligence. While some of these solutions could dramatically impact day-to-day business for lenders and their brokers and customers, blockchain has the potential to completely transform the entire mortgage financing industry. The financial services industry is all about trust – whether relationship based, reputational, authoritative (legal) or transactional – banking today is built on trust.
If this is the first time you've heard the term proptech, it won't be the last. Proptech (also known as real estate tech or REtech) and its subset mortgagetech have been around since 2014. Here's why 2017 is poised to place proptech among the ranks of wealthtech, insurtech, regtech. This year has already been favorable to mortgagetech and proptech companies. SoFi, for example, is about to close a massive, $500 million round, its competitor LendingHome topped $1 billion in mortgage loan originations last year, and RealtyShares has seen over $300 million raised on its platform.
A conceptual image of a businessman offering a Bitcoin to purchase large single family home. It is a seller's market these days for homes across the top U.S. metro areas. Home prices have been rising - up 8% from 2017 - and homes are shifting fast as inventory and days on the market are down according to recent data by 8% and 7%, respectively. That said, home ownership for many remains a distant pipedream. Consequently all this is putting pressure on prospective homebuyers to settle deals quickly before opportunities to purchase dry up.
UK tech startup, habito, has launched the world's first artificially intelligent Digital Mortgage Adviser (DMA) allowing millions of consumers to discuss their mortgage needs from any connected device, 24/7, without requiring a human broker. Built using AI technology and habito's market-leading algorithm, the DMA marries all the elements of a customer's financial life (e.g. The DMA explains the impact consumers' decisions will have on each mortgage configuration as a traditional mortgage broker would, but in a fraction of the time (average 10 minutes). Habito has the ability to search hundreds of products (versus a handful), so once the advice is complete consumers can be sure they're on the best mortgage for them, which can result in savings of thousands of pounds per year*. In designing the new system, habito analysed hundreds of advice interviews in order to understand what consumers needed and what formed the basis of informative advice.