United Wholesale Mortgage, the second-largest mortgage lender in the U.S., announced it had plans to accept cryptocurrency as payment for mortgage loans last week. The company expects to accept bitcoin as soon as Q3 2021, and is looking into possibly accepting ether and other cryptocurrencies as well. However, it is unclear if the company will hold the cryptocurrency collected as is.
Mortgage Lender to Take Bitcoin Payments by Q3
United Wholesale Mortgage will start taking crypto payments sometime in Q3, according to statements made during its earnings call last week. The company will start taking bitcoin payments first, and is researching in consideration of adding ether and other cryptocurrencies later. Its CEO, Mat Ishbia, stated:
We’ve evaluated the feasibility, and we’re looking forward to being the first mortgage company in America to accept cryptocurrency to satisfy mortgage payments.
The company, which emerged as a result of a SPAC merger in January, is not directly connected to customers. Instead, it uses brokers to link customers and loans. The company didn’t explain if the cryptocurrency received would be kept as such or exchanged for fiat money.
Crypto Payment Options on the Rise
If the company manages to achieve its goal, we might see mortgages paid in crypto before the end of this year. The cryptocurrency payments space has been warming up all this year due to the heightened interest in digital assets. In March, one of the biggest payment processors, Paypal, introduced a new feature called “Checkout with crypto,” which enables users to pay with cryptocurrency in millions of online stores.
However, there is still a roadblock for the adoption of cryptocurrency payments in the U.S. Cryptocurrency can be considered property in the country, and paying with crypto can be considered a sale. This means that depending on the buying price, crypto holders might have to pay capital gains tax even when using bitcoin to pay for their mortgage loans.
In other countries with less stringent regulations, crypto is already used for real estate payments. This is the case in Venezuela, which recently recorded one of its first public sales of a property paid for with cryptocurrency. This payment method is said to have many advantages such as not depending on the approval of banks, cutting paperwork, and slashing processing times from two weeks to just hours.
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