Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Second largest US mortgage lender will accept crypto payments this year

fxstreet.com

Post reply on HN
Print view View original

41–50 of 139 posts

Re: Second largest US mortgage lender will accept crypto payments this year

#41

Post by knownjorbist »

ahnick wrote: post #35
ohazi wrote: post #11

Earlier quoted context omitted.

Yes, money launderers and tax evaders would like to continue laundering and evading -- I think the real question is why are we making this easy for them? Buying property with ill-gotten gains is an extremely common method of money laundering. Having a large hoard of cryptocurrency that you prefer not to liquidate screams "I'm trying to pretend that this isn't a taxable event." We don't let people pay their mortgages…

First, this can already be done using MakerDAO CDP loans. Convert crypto to DAI using a CDP loan and then convert DAI to USD to purchase a property. Second, there are many people that own cryptocurrency that are not money launderers and tax evaders who might like the convenience of paying their mortgage with cryptocurrency.

Also doesn't have to be DAI, any stablecoin works.

People worked up that this would enable money laundering seem blissfully unaware how easy it already was to begin with.

It's so strange to me that Hacker News of all places has a very vocal anti-crypto, anti-decentralization crowd whenever any news like this comes out. In other threads they're unironically complaining about "big tech censorship" or the increasing control banks have over one's life!

Re: Second largest US mortgage lender will accept crypto payments this year

#42

Post by seany »

ohazi wrote: post #11
arthurcolle wrote: post #3

Earlier quoted context omitted.

People with substantial amounts of crypto would like to be able to finance larger purchases directly in crypto without needing to liquidate into fiat first

Yes, money launderers and tax evaders would like to continue laundering and evading -- I think the real question is why are we making this easy for them? Buying property with ill-gotten gains is an extremely common method of money laundering. Having a large hoard of cryptocurrency that you prefer not to liquidate screams "I'm trying to pretend that this isn't a taxable event." We don't let people pay their mortgages…

Sure you can. With enough networth in an account you can do margin LOC in the 1.9-2.5% range.

The whole train of thought is weird though. There are plenty of people who pay all of their taxes on everything, but still deal in largely cash.

Re: Second largest US mortgage lender will accept crypto payments this year

#45

Post by FabHK »

quantumBerry wrote: post #30
Finnucane wrote: post #26

Earlier quoted context omitted.

Given the volatility of Bitcoin it would be real rate risk for the lender. I mean, over decades? There’s no way to price that. During the great bubble, borrowers in Eastern Europe got mortgages in Swiss francs. When the market collapsed and the exchange rate sank, they were completely fucked. Don’t borrow in currency you can’t easily get your hands on.

There is a way to price it, there are perpetual futures market for popular coins. You would pay the premium for those futures but by shorting or buying futures you can lock in value within a few percent. For example, if i expect 1 bitcoin 10 years from now, I sell a future contract promising to sell 1 bitcoin at $45,000. If the price falls 5,000 over 10 years, the value of my contract is now worth $5,000 plus the 40,…

The futures on Bitmex go out less than a year, and on CME until Dec 2022.

I very much doubt they'll hedge with futures - I'd assume they just sell the crypto as soon as they have it. They might put on a position in a future for the short period of time between agreeing on a price and getting paid.

And of course the house will be denominated in USD. So, bottom line, not much more than a marketing gimmick.

ETA: And perpetual futures are basically just spot, with financing baked into a funding rate (which is positive or negative depending on demand, but unpredictable ex ante, and as such does not solve your problem).

Re: Second largest US mortgage lender will accept crypto payments this year

#46

Post by j_walter »

mc32 wrote: post #9

Will people using crypto to buy/finance houses need to provide documentation regarding the provenance of the funds as well as being in the clear around any tax declarations? If not, there would likely be some who see this as a vehicle to clean up some holdings, depending on provenance.

I would really love to use some of my crypto that I obtained from mining to pay my mortgage directly. Much less likely to set off alarm bells...

Re: Second largest US mortgage lender will accept crypto payments this year

#47

Post by FabHK »

aynyc wrote: post #44
axiosgunnar wrote: post #2

Why?

Tax saving for buyers with crypto holding, therefore, increase demand. And probably hefty fees involve.

It would not trigger a taxable event? Oh, that would have real world benefits then.

ETA: according to comments further down, selling your crypto is taxable, whether you get dollar for it or a house. Which makes sense, of course.

Re: Second largest US mortgage lender will accept crypto payments this year

#49

Post by nradov »

ahnick wrote: post #29
mc32 wrote: post #9

Will people using crypto to buy/finance houses need to provide documentation regarding the provenance of the funds as well as being in the clear around any tax declarations? If not, there would likely be some who see this as a vehicle to clean up some holdings, depending on provenance.

Is documentation for the provenance of funds, typically required in all cash real estate transactions?

Generally cash real estate transactions aren't subject to most KYC / AML rules. But the US federal government recognizes that as a problem and is working on tightening enforcement.

https://legal.thomsonreuters.com/en/insights/articles/u-s-re...

Re: Second largest US mortgage lender will accept crypto payments this year

#50

Post by paul_f »

quantumBerry wrote: post #30
Finnucane wrote: post #26

Earlier quoted context omitted.

Given the volatility of Bitcoin it would be real rate risk for the lender. I mean, over decades? There’s no way to price that. During the great bubble, borrowers in Eastern Europe got mortgages in Swiss francs. When the market collapsed and the exchange rate sank, they were completely fucked. Don’t borrow in currency you can’t easily get your hands on.

There is a way to price it, there are perpetual futures market for popular coins. You would pay the premium for those futures but by shorting or buying futures you can lock in value within a few percent. For example, if i expect 1 bitcoin 10 years from now, I sell a future contract promising to sell 1 bitcoin at $45,000. If the price falls 5,000 over 10 years, the value of my contract is now worth $5,000 plus the 40,…

The problem being that I would not trust any crypto futures market to actually payout if prices crash.
Post reply on HN