A prominent mortgage lender in the United States, Newrez, has announced its plans to embrace the cryptocurrency landscape by allowing borrowers to use their digital assets as part of the mortgage application process. This new initiative is set to launch in February and will be applied to its Smart Series suite of non-agency products without the need for borrowers to liquidate their crypto holdings.
Traditionally, borrowers had to convert their cryptocurrency into cash to demonstrate financial capability for loans. However, with Newrez’s innovative approach, individuals can retain ownership of their digital currencies while leveraging their value for asset verification and income estimation, similar to traditional investments like stocks and bonds. This shift aims to provide consumers with more flexibility and control in the home-buying process.
Leslie Gillin, Newrez’s chief commercial officer, emphasized the company’s commitment to recognizing the evolving consumer landscape, as the global cryptocurrency market has surpassed $3 trillion, highlighting the increasing popularity of digital investments. The mortgage lender plans to accept Bitcoin, Ethereum, and stablecoins backed by the U.S. dollar, provided these assets are held in U.S.-regulated exchanges or financial institutions that meet federal standards.
While several smaller lending firms, such as Figure and Milo, have previously ventured into this domain, Newrez claims it is the first among the nation’s top 25 lenders to integrate digital assets into mortgage qualification criteria. The company plays a significant role in the mortgage market, having originated over 52,000 loans totaling more than $16 billion in the previous year.
Newrez President Baron Silverstein noted that current regulatory trends and a supportive political atmosphere make this a prime opportunity for integrating eligible cryptocurrencies into mortgage lending. He pointed out that an increasing number of consumers are including cryptocurrencies in their investment portfolios, prompting major financial institutions to engage more deeply with digital assets.
Furthermore, insights from industry experts indicate that the mortgage sector recognizes cryptocurrencies as a legitimate asset class, particularly appealing to younger generations, including millennials and Gen Z, many of whom are actively investing in cryptocurrencies. Reports indicate that approximately 45% of individuals in these demographics own crypto assets, suggesting a significant shift in consumer investment behaviors that lenders must adapt to.
The movement towards crypto inclusion has received backing from influential figures, including directives from the Federal Housing Finance Agency encouraging the consideration of digital assets in loan facilitation. However, this approach is not without its critics, as consumer advocacy groups have raised concerns regarding the implications of mixing traditional mortgage lending with digital currencies.
Overall, Newrez’s decision to incorporate cryptocurrencies into the mortgage lending process represents a noteworthy step toward modernizing the industry. As financial institutions explore new technologies, the potential for making homeownership more accessible to a broader audience becomes increasingly feasible.