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Homelend – a decentralized platform enabling the next generation of homebuyer mortgage financing

Homelend is a decentralized platform enabling the next generation of homebuyer mortgage financing. Homelend creates an interface for direct interaction between borrowers, lenders and other parties involved in the mortgage value chain. By doing so, it enables mortgage crowdfunding using a peer-to-peer model with the security, transparency and automation provided by distributed ledger technology (DLT) and smart contracts.

The Problems

  • Owning housing is unaffordable for most people, especially if they would prefer to make cash payments.
  • Mortgage interest rates are tax-deductible in some locales, but the option to take out a mortgage may not be possible for some.
  • There is a great deal of time-wasting bureaucracy involved in the loan application process, which is compounded the fact that it cannot be done online.
  • Banks often sell mortgages to third parties, therefore making it difficult to discuss and renegotiate terms with their mortgage holders.
  • Potential buyers with low credit scores are often forced to agree to take out mortgages with high, long-term interest rates (sub-prime loans). This increase the likelihood of their defaulting on the re-payments due to unaffordability, especially when the load issuers fail to do proper due diligence before approving requests.
  • Many sub-primers often purchase properties for speculative reasons in the hopes of reselling their property later of when they have improved their credit scores, in order to take out a mortgage on another property on improved terms. However, these strategies failed in the United States leading economic collapse in 2008.
  • The creation of mortgage securities has further exacerbated the bureaucracy and inefficiency of applying for mortgages and negotiating mortgage terms.

The Solution

  • Blockchain technology allows for all data to be stored and contracts secured by means of smart contracts, which are encrypted and distributed across a network of nodes when finalized. As this data is very difficult to alter, these smart contracts allow for the simplification of data sharing, access and authentication, as well as for the traceability and transparency of transactions.
  • The Homelend ICO’s platform will also allow for the automatic verification and reliability of all parties by all parties involved in the mortgage process. One aspect of this includes the platform’s AI technology connecting with accredited information providers and assessing the collected data to establish the applicant’s credit risk.
  • This will allow potential lenders to be provided with accurate credit information and general profile of the mortgage applicant so that the lender will have an accurate assessment of the potential risks and profits involved in investing their money in a given mortgage loan. This will improve the probability of the borrower being able to return the investment capital, should the mortgage be forfeited.
  • All information will be encrypted and issued only upon approval by the data-owner.
  • The smart contracts will underwrite the loan, by recording and distributing all data relating to monetary flows between platform users, thereby ensuring that the transactions are securely stored.
  • In this way, new investors and individuals to enter the mortgage loan investment industry with decreased risk.
  • Mortgage applicants will easily be able to confirm the current progress of their mortgage application.
  • Property value assessments cannot be conducted autonomously and will require the involvement of professional property assessment agents.
  • The reduced overall number of intermediaries will lower overall fees.
  • All aspects of the process can be conducted online, thereby eliminating the need for hardcopy documentation. This would save the time involved in submitting documentation, as well as substantially decrease processing fees.
  • Lenders will have free access to the platform.

Homelend Features and Benefits

Homelend is emphasizing all of the following features and benefits:

Streamlined and Efficient: Today’s mortgage application process is manual and lengthy. Homelend wants to use blockchain and smart contracts to make it streamlined and efficient. Homelend will embed pre-defined business logic into smart contracts, digitizing documentation and eliminating unnecessary processes. Homelend specifically aims to cut the end-to-end mortgage origination process from 50 days to fewer than 20.

Transparent and User-Friendly: Homelend seeks to get rid of today’s ambiguous and clunky mortgage application process and replace it with a process that’s transparent and user-friendly. Homelend will create a lending process that is smart, simple, and fair, allowing borrowers to easily apply for a loan, track their application status at all times, and interact directly with mortgage lenders.

Cost-Effective with No Intermediaries: Homelend will introduce a cost-effective mortgage application process free from middlemen. The blockchain will replace intermediaries, providing a way for two trustless parties to interact with each other. All transaction data will be recorded in the blockchain, allowing borrowers and lenders to maintain maximum transparency throughout the transaction process.

Trusted and Secure: Homelend aims to use blockchain to process mortgage-related data in a more trusted, transparent, and secure way than ever before.

How Do Homelend Tokens (HMD) Work?

Homelend ICO tokens, or HMD, are Ethereum-based ERC20 tokens. A pre-sale for the tokens began on March 1, 2018. As of April 2018, a date has not yet been announced for the crowdsale. There’s a total supply of 250 million HMD tokens. The tokens are priced at a face value of 1 ETH = 1600 HMD. Homelend has set a hard cap of $30 million USD for the token sale. Of the total supply of tokens, 36% is allocated to the public sale, 28% to the pre-sale, 20% to a reserve fund, 8% to advisors and bounties, and 8% to the founders.

For more information,visit the Website or read the Whitepaper.

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