Our new Disruption by Blockchain series aims to highlight companies that are leveraging the incredible potential of blockchain technology to disrupt and revolutionize their industry. Through one on one interviews, we'll speak directly with industry leaders to cut beyond the hype and get directly to the heart of practical use cases and examples of how it will change the world, one industry at a time.
The following is an interview we recently had with Joe Markham, Founder and CEO of Block66.
1. As Founder and CEO of Block66, what inspired you to create a blockchain-powered platform for the mortgage?
JM: Throughout my career as a broker, I’ve consistently managed multiple sets of clients at the same time. I’ve worked with big banks along with mortgage-specific lenders, MIC (Mortgage Investment Corps), and individual private lenders. One thing I’ve noticed from working with so many people is that each person has their own unique set of needs while lenders have numerous product and lending criteria.
Because of that, I understand how challenging it is to balance the demands of clients with that of borrowers. Moreover, the situation is even worse when those demands are being asked on paper or over the phone, which results in a tedious, paper-driven, time-consuming mortgage process that constantly includes new rates, rules, and regulations to follow.
Based on the difficulties I experienced, I wanted to create a technology that would solve these major pain points and innovate the mortgage industry as a whole. This led to the development of Block66, which is a blockchain-powered platform that will bring a new sense of ease to brokers, borrowers, lenders and all participating in the mortgage process.
2. What pain points does Block66 hope to solve on a day-to-day basis for mortgage brokers?
JM: Block66 will solve a number of issues. However, the biggest problem our blockchain solution will resolve is mortgage fraud. This is a top concern for the industry—but our platform will decrease mortgage fraud by pulling applicants’ information (i.e. pay stubs, tax document, credit information, etc.) directly from the source and storing it on the blockchain. Not only will this prevent applicants from attempting to lie on their mortgage applications, but it will also help brokers verify borrowers’ information to ensure everything is correct before any funds are released.
Besides mitigating mortgage fraud, Block66 ends the paper-driven, time-consuming application process that’s been plaguing the mortgage industry. It usually takes 30-45 days for a borrower to get their mortgage approved and funded—the various steps, criteria, and people involved make this process incredibly slow. And things get worse when the process is driven by paper. Block66, however, will make the approval and funding process more efficient by providing a blockchain-powered platform that gives everyone insight into where an application stands and what information is still needed from the borrower. Essentially, Block66 will be the one stop shop for borrowers, brokers, and everyone else involved.
3. What are the benefits of a platform like Block66 for the mortgage industry?
- An increase in transparency: With a blockchain-powered solution, it’ll be easy and possible for everyone in the mortgage process to check the status of an application, see available products, review the criteria to receive those products, and a get a high-level overview of the approved mortgage compared to others made available to the client. While the mortgage industry has run on paper-driven processes and face-to-face communication, Block66 will transform the approval and funding process by bringing visibility and transparency.
- A viable audit trail: Block66 will also act as a mortgage hub that pulls and stores borrowers’ bank information, pays stubs, tax documents, and other relevant documents. This will result in an immutable audit trail that brokers and lenders can follow to avoid high underwriting costs and the back-and-forth it takes to verify a borrower’s claims. This will also be beneficial for borrowers because they won’t have to wait long periods of time to get their mortgage funded.
- A decrease in mortgage fraud: Writing and submitting fraudulent information in support of your mortgage application is the easiest thing for borrowers to do. Every day, there’s a new story about this being reported. However, Block66 will put an end to mortgage fraud by pulling and storing borrowers’ information directly from the source, making documents safe, secure, and immutable.
4. What are the top 3 trends in the mortgage industry that you see gaining traction by the end of 2018?
- Technology adoption: There is a growing demand from current and potential home owners to be able to complete the entire mortgage transaction online or on mobile. A complete digital transaction will be ushered in by Block66.
- Increased regulation: Since the 2008 mortgage crisis, regulation and guidelines have continued to become more rigid and strict. Lenders are more risk averse—but they are also trying to find solutions to cater to the entire mortgage market. This will bring on more underwriting policies and guidelines, making it harder for brokers, bankers, and underwriters to efficiently place a mortgage in the best mortgage product.
- HELOC (Home Equity Line of Credit) and refinancing: Home values are continuing to increase or have already reached all-time highs. As a result, more home owners will consider staying in their homes to leverage the equity within their home and pay off debt, pay for education, or renovate. As this demand grows, borrowers will be seeking a fast, efficient and secure method of accessing this built up equity.