A Review of Use Cases for Blockchain in the Mortgage and Real Estate Industries

This paper discusses several areas in the real estate and mortgage industries that a blockchain could be applied to and grow from. Blockchain is a distributed ledger technology that contains a ledger recording transactions hosted on the platform of tokenized assets, which smart contracts govern using transaction protocols. After interviewing many players in the mortgage industry, it is apparent the mortgage industry is centralized around institutions like Freddie Mac and Fannie Mae. However, the point of sale, home closing and ownership processes are somewhat disconnected from these behemoths. This paper discusses interviews and a customer survey that garner the efficiency and cost problems the mortgage industry is currently facing. These problems include manual processing of documents, time consuming information verification, lack of privacy, communication issues and lack of technological systemization in the recording process. This paper proposes solutions handling document and information verification for Loan Applicant Report creation and uploading to the LOS. It discusses simplifying real estate transactions themselves with the blockchain. It lastly discusses the idea of forming a land registry on a blockchain because many countries do not have access to sufficient land records. This paper finds that all three are good use cases for a blockchain application, but blockchain technology could start and grow from one of these applications. A blockchain-based mortgage system should be made to connect credit information verifiers, banks and homebuyers, process their documents and make the mortgage process faster.