In my last blog post, Largest mortgage buyers required to use cryptocurrencies. There was a clear consensus of whether the government should or should not be embracing crypto. But the responses were thought provoking and the results were not as clear cut as I had thought. Thank you to everyone for your responses and insight, it is invaluable. Below I’ll share the details.
About my email list
My email list is large and all organic that includes realtors, appraisers, property owners, assessors, various real estate media, etc… It is a diverse group from a realtor in Atlanta focusing on 400k houses to a realtor in Telluride that just sold a 50 million dollar home. The viewpoints are diverse based on geography, specialization within real estate (title company versus commercial property owner), etc… This allows a unique cross perspective on real estate trends.
What was the question in the survey?
Should the federal housing agencies that insure mortgages (Fannie Mae and Freddie Mac) in the United States accept crypto as an asset for underwriting?
Yes
No
Please explain why the US government should either accept or decline crypto assets for the purpose of underwriting.
What were the results from the crypto survey?
I was amazed at how resounding the responses were.
- 65% said the government should not accept crypto as an asset for a mortgage
- 35% said that the government should accept crypto.
I also asked what the reasons behind the choices were and here are the top 5 responses
- If one can use stocks why not crypto at this point?
- The global economy is witnessing the convergence of three huge technologies, robotics, AI, and blockchain/cryto. Our world is moving into a more digital world. With the signing of the Genius Act, and the United States government positioning the US to be the leader of cryptocurrencies, especially with the adoption of stablecoins, this administrative shift signals the adoption of digital assets.
- DECLINE because it is such an unstable and volatile “currency” secured by nothing other than wishful thinking, it has no intrinsic value. If a borrower cannot convert their crypto currency into enough actual money for a partial or full payment for real estate, the public should not be on the hook to convert an unstable asset into real estate. An unsecured promissory note has a more stable value.
- Crypto is extremely volatile, price transparent, and liquid. This makes it similar to certain public market equities—like micro-caps. Seems like the underwriting guidelines for equities should apply to crypto. I’m no crypto fan, but I were a lender, I’d prefer to see crypto over assets like art or small company equity. —great newsletter topics, thanks!
- Taxpayers will be on the hook for huge losses as there is no way to accurately value crypto today with the huge volatility it it too speculative
Summary
Thank you everyone for your participation and insights in my survey. The overwhelming sentiment (65%) feels that crypto should not be used for mortgage underwriting, but 35% think just the opposite with some valid responses comparing crypto to small cap stocks which is likely true from a risk perspective. Stay tuned for future surveys and results.
Additional Reading/Resources:
https://www.fairviewlending.com/largest-mortgage-buyers-required-to-use-cryptocurrencies/
https://www.fairviewlending.com/will-real-estate-fall-to-2020-values/
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Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. I’m not an armchair reporter/writer. We are an actual private lender, lending our own money. We service our own loans and own commercial and residential real estate throughout the country.
My day job is and continues to be private real estate lending/ hard money lending which enables me to have a unique perspective on the market. I don’t accept any paid sponsorships or ads on my blog to ensure accurate information. I’ve been writing this for almost 20 years and have over 30k subscribers. Please like and share my blogs on linkedin, twitter, facebook, and other social media and forward to your friends . I would greatly appreciate it.
Fairview is a hard money lender specializing in private money loans / non-bank real estate loans in Georgia, Colorado, and Florida. We are recognized in the industry as the leader in hard money lending/ Private Lending with no upfront fees or any other games. We fund our own loans and provide honest answers quickly. Learn more about Hard Money Lending through our free Hard Money Guide. To get started on a loan all we need is our simple one page application (no upfront fees or other games).
Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
