UWM not quite ready to commit to cryptocurrency payments

Regulatory questions and incremental costs mean the wholesale lender will stick to a pilot program for now

United Wholesale Mortgage is testing the waters with cryptocurrency, announcing today that it accepted its first-ever cryptocurrency mortgage payment in September.

According to UWM, five more cryptocurrency mortgage payments were evaluated and accepted in October.

The Pontiac-based wholesale mortgage lender said that the transactions were used as models to “better assess scaling cryptocurrency payments for consumers.” But don’t expect UWM to jump aboard the crypto train just yet.

Mat Ishbia, president and CEO of UWM, said that by launching the pilot, the company looks to “[innovate] for the long term.” However, due to “incremental costs and regulatory uncertainty in the crypto space” the lender decided to keep this initiative in the pilot phase for now.

“As we said last quarter, we were going to look into accepting cryptocurrency and test it to see if it’s a faster, easier and cheaper solution and thanks to our innovative technology team members, the transactions were successful,” Ishbia said.

The lender noted that the “test-and-learn process” helped the company become the first to make this type of transaction happen and once crypto makes it through regulatory hurdles, it will be used to “propel the organization forward.”

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“UWM will continue to monitor cryptocurrency, the use of blockchain technology, and opportunities for future use,” the company added.

The cryptocurrency universe, worth over $2.4 trillion as of Wednesday, has been the talk of the finance world this year. Some investors have even posed the question as to whether crypto should become its own asset class. Still, lack of regulatory clarity and fears of volatility have kept the currency from becoming fully integrated into the financial services space.

Additionally, the lender said in their press release that their innovations in technology are ongoing and have been highlighted by the most recent roll-out of BOLT, an underwriting system announced in late September.

Ishbia added that the platform “[changes] the mortgage game in a significant way moving forward.”

“Our team of nearly 1,200 technology experts will continue to build out elite, state-of-the-art tools that will help independent mortgage brokers win,” he said.

Bolt provides the ability to get an initial approval for a qualified borrower in just 15 minutes, an “end-to-end online mortgage experience without wet signing any documents,” the lender claims.

In August, Mike Cagney-led Figure Technologies and Homebridge Financial Services announced that they would be merging. The merger essentially represents a proof of concept for blockchain technology – which underpins crypto – in mortgage.

Figure and Homebridge are betting that in a few years, blockchain will create efficiencies that allow them to grow far beyond the top-30ish mortgage lender level they’re currently operating at. 

Long term, the blockchain technology would allow Homebridge and Figure to handle mortgage transactions through cryptocurrencies instantly. Instead of dollars being wired into escrow accounts, one could use a token that has value, say 30 Bitcoins, for example, and have instant liquidity from player to player. 

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