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Second largest US mortgage lender will accept crypto payments this year

fxstreet.com

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

#51

Post by quantumBerry »

TheDong wrote: post #38
quantumBerry wrote: post #30

Earlier quoted context omitted.

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,…

As I understand it, the majority of these future's contracts are on Etherium or another crypto market, and pay out in stable coins at best. That's already too much risk for 10 years out. The chance of etherium having died in the PoS transition, or the chance of any given market-related contract having an exploit that renders it worthless, are both simply too high to actually participate in for a 30 year loan. Do you…

I think the non-KYC exchanges may use stablecoins as collateral due to the inability to service fiat. But Kraken for instance has BTC-USD perpetual futures [1].

Presumably a large mortgage lender would write their own contracts or collaborate with an exchange for a product using their own mortgage contracts instead of USD on margin as collateral for the loan.

[1].https://futures.kraken.com/trade/futures/PI_XBTUSD

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

#52

Post by FabHK »

knownjorbist wrote: post #36
hellbannedguy wrote: post #21

Earlier quoted context omitted.

The ease at which we let foreigners buy our American Real-estate has been bothering me for years. I can't prove it, but it seems like too much foreign capital that is buying our land is ill gotten, and allowing crypto is just going to make it worse. I believe we are the Only country that allows foreigners buy property with a phone call, or email.

It needs to go in the other direction - it should be easy for anyone to buy property anywhere.

Hmmm. It is not easy for foreigners to buy property in most of Asia (except commonwealth-influenced jurisdictions like HK, Australia) from what I gather. It does not strike me as unreasonable. Prices in London for example are hard to afford for the people who actually live there because so much property has been bought by people who don't live there.

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

#54

Post by knownjorbist »

FabHK wrote: post #52
knownjorbist wrote: post #36

Earlier quoted context omitted.

It needs to go in the other direction - it should be easy for anyone to buy property anywhere.

Hmmm. It is not easy for foreigners to buy property in most of Asia (except commonwealth-influenced jurisdictions like HK, Australia) from what I gather. It does not strike me as unreasonable. Prices in London for example are hard to afford for the people who actually live there because so much property has been bought by people who don't live there.

Okay. You're attacking the symptom, not the problem. Make it easier to spend your money how you please.

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

#55

Post by FabHK »

Ekaros wrote: post #33
axiosgunnar wrote: post #2

Why?

Crypto enthusiast are under served market. There is likely enough of them who are willing to pay margin just for sake of using crypto. That is compared to trading for fiat and then using that to pay...

Yes, one reason being that the crypto exchanges charge so unreasonably much, a bit like the good old foreign exchange offices in airports.

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

#56

Post by quantumBerry »

FabHK wrote: post #45
quantumBerry wrote: post #30

Earlier quoted context omitted.

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 per…

It sounds like a fixed term future written by the lender directly may be a better option, I would not expect a large lender to actually trade futures Kraken/Coinbase.

Agreed it is a gimmick, I would imagine everything will be in fiat except at the time of each payment, when the instantaneous crypto value will be credited.

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

#57

Post by squeaky-clean »

wc- wrote: post #32
tablespoon wrote: post #17

Earlier quoted context omitted.

> Better question - why not? Because crypto payments are niche and likely come with more hassle (e.g. volatile value, lender needs dollars and has to take on any risk with liquidating bitcoin/other cryptocurrencies). You might as well ask why US mortgage lenders don't accept payments in RMB or Euros.

Why do you care if this company wants to take on the hassle of converting the bitcoin to $ for the customer? It's an additional source of revenue for them.

Because it's a valid answer as to why would a business not choose to do this?

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

#58

Post by JoshTriplett »

nradov wrote: post #49
ahnick wrote: post #29

Earlier quoted context omitted.

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...

> Generally cash real estate transactions aren't subject to most KYC / AML rules.

That's not entirely true. The bank wants to know enough information to make sure that the cash came from the buyer, and not from someone else other than the buyer, for AML reasons as well as creditworthiness. So they do seek proof of the provenance of the cash sufficient to demonstrate that it actually came from the buyer.

(Source: detailed conversations with bankers when buying a home.)

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

#60

Post by epa »

jonas21 wrote: post #25

> The use of crypto in real estate purchases has a history dating back seven years, with BitPay helping facilitate the sale of a Lake Tahoe property that sold for $1.6 million in BTC in 2014. In case anyone's wondering, it was 2,739 BTC, which would be worth around $127M today. See: https://www.wsj.com/articles/lake-tahoe-property-sells-for-1...

This transaction was actually facilitated by chamath palihapitiya who paid USD cash to a Bitcoin company who bought it and paid out the seller in USD cash. It was a publicity stunt to prop up Bitcoin and it worked.
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