Page 36 - June 2018 Disruption Report Flip Book

TRANSFORMING MORTGAGE LENDING JAJNUUNAERY20210818
Will blockchain technology transform the mortgage lending process?
In Digitally Transforming the Mortgage Banking Industry, James Deitch wrote:
...Blockchain technology is the future, albeit not the immediate future. Like most things defined as the “future”, it is still cost prohibitive for many, unfortunately, and adoption by the average user will take time. It does, however, promise to be an elegant solution to data integrity and introduces the possibility of eliminating “checkers checking the checkers”. It has to be a part of the conversation moving forward in the mortgage banking space.
...What does blockchain do? According to IBM, blockchain is a shared unchangeable ledger for recording the history of transactions. In mortgage banking, these transactions could include the receipt of trusted borrower information, such as bank account data, income data, and related qualifying information. The data comes from a trusted source (such as a bank, the IRS, or payroll service) and never needs to be re-verified.
Blockchain is Distributed. It works as a system of record that is shared among participants of the business network, eliminating the need to reconcile disparate ledgers. It is Permissioned, such that each member of the network has access rights so that confidential information is shared on a need-to-know basis. It is Secured. Consensus is required from all network members and all validated transactions are permanently recorded. No one, not even a system administrator, can delete or change information.
For example, the bank account records (say 24 months of transaction data) can be provided by a bank to a mortgage blockchain regarding a borrower. Same for payroll data. (Data, not images.) Same for credit report data. One now has trusted source data regarding a borrower that is immutable and can be utilized by authorized parties. Same for mortgage payment history, prior credit events, collateral information, etc. This authenticated history
is permissioned, meaning a consumer could grant permission to a lender to access this trusted information. The consumer’s record could also be appended in real time. Meaning once the basis information is created, the ongoing transactional history could be built. Imagine having an authenticated complete history of a consumer’s finances available for
an instant credit decision since all of the information is assembled form trusted parties! No redundant QC. No robotics. Just authentic real-time data.
Access to this information could be granted by the customer to servicers, prospective originators, owners of the underlying loan, etc. This means the party owning the servicing could essentially offer a refinance or additional credit or wealth management services if
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