One of the largest mortgage lenders in the United States, United Wholesale Mortgage announced this week that the mortgage giant would accept bitcoin payments for home loans before the end of 2021. CEO Mat Ishbia made the announcement during the company’s conference on the company’s quarterly earnings. This call means that the mortgage body will be the first lender in the United State’s mortgage industry to accept cryptocurrency payments.
The Mortgage Lender Has Been Working on it for a While
Matt Ishbia said the mortgage body made some calculations and analyzed several things before concluding to accept cryptocurrency. The CEO said United Wholesale Mortgage was looking forward to being the first in the United States to achieve such a feat, and that also promoted them to make such a decision. He further said that the board has been working on it, and are excited that they can be the first to do that in the United States.
The decision aligns with the mortgage lender’s goals to continue being the leader in technology and evolution. Cryptocurrency is an evolving systematic method of payment for the exchange of goods and services. The company’s plan to tap into the decentralized money market further proves that cryptocurrency has come to stay and is the future of the money market.
UWM plans to start with Bitcoin because it’s widely traded, and one of the most stable coins. Nonetheless, they are considering ether – a token of Ethereum blockchain and other altcoins. The company is hoping to make all these become a reality before the end of the year.
The move by UWM will see other lenders adopt the cryptocurrency approach for payments. Many industries in the United States are yet to accept bitcoin and other cryptocurrencies due to market fluctuations and the volatility of the coins. Plus, mining is costly.
UWM Recorded Massive Volume of Business Deals
In addition to the crypto announcement, the mortgage company also announced business growth, as it recorded a massive volume of mortgage business in Q2. The company recorded a net income of $138.7 million in the second quarter and closed in on mortgages worth $59.2 billion – a record. Despite the record volume of business, the lender’s profit margin contracted because of the inclined mortgage rate and the uncertainties.
The company’s total profit margin declined by 1.38% to 0.81% this quarter from the previous one. The UWM wasn’t the only lender affected in the mortgage industry. Lenders that offer refinancing programs were also affected by the relative rise in mortgage rates and recorded even tighter profit margins. The rates forced the companies to sharpen their pricing and do less business, owing to the forecast that refinancing activities will dwindle.
However, the UWM did more business and recorded higher profit margins than the rest. Refinancing accounted for 59% of all UWM business deals in Q2, down by 16% from Q1. However, purchase activity increased from 25% in Q1 to 41% in Q2.