The U.S. housing sector may be heading towards a recognition of mortgage underwriting encryption, but Redfin’s chief economist has called for caution.
Daryl Fairweather warns that the risk of Crypto posing may not be fully acquired by traditional financial models. “There is an unknown risk with the code and it probably won’t be fully explained,” she said.
Her comments order Fandie Mae and Freddie Macs to study whether digital assets held on US regulated exchanges can be considered in mortgage risk assessments and follow a new directive from the Federal Housing Finance Agency (FHFA).
This review is early on and does not change existing rules, but presents a meaningful step in government consideration of crypto within the housing finance system.
Currently, borrowers need to settle their cryptocurrencies a few months in advance for use in their mortgage applications. If future rules allow them to count as reserves without conversion, long-time holders will retain their assets and still qualify.
This directive applies only to centralized, US regulated exchange cryptography, except private wallets and offshore holdings. Formal changes will require approval from both Fannie and Freddie Board and FHFA.
