Hello everybody this is Mark Schreier
from century 21 American Homes Real
Estate. With Quentin my mortgage
professional from Movement Mortgage. For
all those people there’s magic term out
there or maybe was always thought of as
a bad term. Cryptocurrency aka Bitcoin is
the more generic name that some people
know about and not everybody. The
question is how does cryptocurrency come
into play when you’re dealing with a
mortgage? If I have most of my assets
which I don’t but if I had most of my
assets in cryptocurrency and I’m
applying for a mortgage how does that
affect the numbers Quentin? That’s a
great question. A tricky question and one
that we really don’t know the full
answer yet. As it is still developing a
few years ago I had a gentleman try to
use Bitcoin to make a purchase and the
problem was that we couldn’t trace it. We
didn’t, and this is years before Bitcoin
is a big hit. That’s maybe seven years
ago or six years ago. I hope the guy kept
his Bitcoin didn’t sell it, but we
couldn’t figure out where the money came
from. The account is in a number not a
name. So we couldn’t even prove it was
really his money. Nowadays there are more
and more ways to do it, but it all comes
down to traceability . Can we show where
the money came from? If you have an
account that has a number only and we
cannot prove that that number is your
account or that you put the money in
there or you took the money out then we
can’t really use that. Not too long under
those a gentleman in Seattle who used
Bitcoin as his 10% down payment. The
lender had to check with Fannie Mae to
make sure this was legit and okay. What
Frannie Mae ruled was as long as they
could see how much he paid to buy the
Bitcoin. The history of what he’d done
and show that he’d now converted the
Bitcoin into US dollars we were fine.
Fannie Mae allowed him to use it for his
down payment. But understand that that
traceability and that tracking the
account had his name on it. He
show account statements of when he
bought it what he paid his cost basis.
All these things most people may not
have that and if you can’t trace it and
prove it that’s the problem. Now part of
what bitcoin was supposed to be was an
ability to have anonymous transactions.
Understand that a bank wants the
exact opposite,
Nothing is anonymous so if you’ve been
trading your Bitcoin and buying your
Bitcoin in an anonymous fashion it most
likely will not be able to be used.
Because we can’t prove that it’s yours,
or if it ever was yours. etc. It was not
used and not purchased and not managing
an anonymous fashion then you might have
a shot at it. That’s all the more
reason to have your loan fully
underwritten upfront because you don’t
want to have a surprise a week before
closing that your down payment doesn’t
count.
Okay great answer.
I pretty much expected that answer.
Bitcoin and cryptocurrency is
still pretty new. The banks if you ask me
are a little allergic to it, but I think
as they realize that more and more
people particularly the younger
generation are starting to get more into
cryptocurrency and it’s going to be more
of a mainstay. Again Mark and Quentin
here and thanks for watching.