April 14, 2022
As companies like Milo and Figure announced offerings of new crypto-backed mortgages, homeowners and homebuyers are curious to know how they work.
In a Business Insider article, Richard Levin, partner and chair of the Fintech and Regulation Practice at Nelson Mullins, discusses the risk of these new mortgage offerings, including a potential for homeowners and buyers to bring more money into the transaction than originally planned or anticipated: “Anyone that has a digital asset that is posting that as collateral for their loan should proceed with a degree of caution.”
Due to the volatility of cryptocurrencies, lenders may ask for additional collateral if the value of a borrower’s cryptocurreny drops significantly. Levin said homeowners and buyers should ensure they understand the lender’s rules for situations like this before entering into an agreement.
These materials have been prepared for informational purposes only and are not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Internet subscribers and online readers should not act upon this information without seeking professional counsel.