anggita sari: Homeland

Homeland

In the World today, the mortgage industry has been evolving toward innovative solutions which are capable of dealing with the aforementioned problems and of increasing efficiency, reliability and transparency.

This kinds of evolution will also address the market failures which are derived from a purely economic logic. In this new market environment, Homelend is developing an innovative platform that taps into the power of blockchain technology and will disrupt the mortgage industry.

This will be done by opening a new P2P funding / investment opportunities, better managing information, and automating business processes with the help of smart contracts.

Peer-To-Peer (P2P) Mortgage Lending Mechanism of Homeland

Homelend P2P platform works by embedding mortgage lending business logic into smart contracts and this is the functionality of the Homeland platform. By creating a set of smart contracts that execute business processes, Homelend allows individuals to borrow money from their peers in a trusted, transparent, and secure way. The key idea is that borrowers and lenders are not linked by means of a bank or a centralized P2P lending platform, but rather they are linked by smart contracts that automatically execute a pre-defined business logic.

In Homelend, the flow of financial resources from the lenders to the borrowers (and, ultimately, to the sellers) is executed purely by smart contracts. There is no financial intermediation, control or decision-making by Homelend.

In the Homelend system, mortgage loans are classified according to their risk level.

THE BLOCKCHAIN AND MORTGAGE INDUSTRY

In the world today, many areas in the financial world have been disrupted by revolution of the internet. But however, despite being one of the largest areas, mortgage lending is still generally conducted under the same traditional system.

During the past three decades, the mortgage value chain has grown in complexity due to the trend towards securitization, which has significantly amplified the financial supply. Nevertheless, mortgage lending processes remain mostly paper-based and involve many players, making them to be complicated, tedious and slow.

THE MORTGAGE VALUE CHAIN

The mortgage value chain consists of three distinctive stages or phases: origination, servicing, and securitization.

Origination: This is the process of applying for and closing a mortgage loan. Mortgage origination comprises of all the steps and procedures that are necessary for the request, analysis, offer and formalization of a mortgage loan.

Servicing: This involves executing the obligations that arise from the loan during its lifespan which includes monthly payments of principal plus interests. Mortgage servicing is known as the collection of tax and insurance money from a mortgage loan.

Securitization: This is the issuing of financial instruments called mortgage- backed securities (MBS). Mortgage securitization is the process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors.

Both servicing and securitization take place after the origination has been completed.

Mortgage origination comprises of all the steps and procedures that are necessary for the request, analysis, offer and formalization of a mortgage loan. Specific steps and their precise order might vary depending on the location’s legal regulations and business practices. Each step taken during the origination process has a specific objective.

SMART CONTRACTS

Smart contracts are computing programs that execute specific actions or adopt determinate states when pre-defined conditions are met.

The smart contract, as it is understood in the crypto world since the creation of the Ethereum blockchain platform, has a key added feature and it runs in a distributed, shared platform such that its automatic execution it runs in a distributed, shared platform such that its automatic execution cannot be affected by any single person or group of people. This will make it possible for transactions and agreements to be carried out between disparate parties, without the need for a central authority, legal system or external enforcement mechanism. As a result of this, the transactions are traceable, transparent and irreversible.

The vision of Homelend is that, in the future, the servicing itself will be automated through smart contracts and managed directly by the platform itself.

Homelend is being developed as a blockchain solution that will significantly increase the housing financing possibilities for many individuals and families.

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