The Evolution of Mortgage Lending: Alternative Due Diligence Data

The promise of emerging technology has provided advocates of disruption plenty of conceptual ideas, a ton hopes and many dreams regarding the art of possible.??Unfortunately, those that control the core processes of mortgage manufacturing and those that know, and actually employ, emerging technology, remain miles apart on any meaningful use cases in the very volatile vertical of mortgage lending.??Then there is the fact that the overarching financial markets are not helping… when times are good nobody has time or desire for change, and when times are bad, nobody has capital or the wherewithal to usher in the fundamental change that will set the stage for meaningful use of emerging technology.

In my humble opinion, meaningful change will never be established by those currently in control of technology in the front-end of the marketplace, and my hopes of invoking meaningful change from the back-end of the marketplace were dashed by the irrational interest rate environment that forced me into a place where I had to sell or shutter my due diligence company.??My hope now is that change comes from somewhere within the mortgage lifecycle… value to be derived from some little pockets of emerging technology backed services that may ultimately work to consume the supply chain through efficiency garnered by automation that results in massive cost reduction in the manufacture, sale and maintenance of mortgages as they enter and exist within the marketplace as digital negotiable instruments.?

A cool, but novel, blockchain based solution emerged this week, and the concept is relatively simple… blockchain based data, documents and images for use throughout the latter of the life of the residential real property or the mortgage.??The complex, vast, and expensive mortgage origination, servicing, purchase and sale, and in some cases, liquidation processes, requires a ton of data from a ton of participants that are not logically connected, nor incentivized, to share data with ease.?A relatively new entrant to the mortgage services space, Consortia [i], has been minting data and image Non-Fungible Tokens (NFTs), representing various elements of the purchase and sale of residential real property.??What Consortia has done is that they have created the ability collect and transfer certain types of data, that may not have been readily available, nor historically trusted or gathered in a cost-effective??manner, to be relied upon in helping the various participants in the ever-growing lifecycle of mortgage.??Mortgage Originators, Servicers, Whole Loan Investors, MSR Buyers, Portfolio Administrators, Due Diligence Technology and Service Providers now have access to what is being coined as Alternative Due Diligence data sets.

Alternative Due Diligence data sets are available for the use of any interested party and these data sets are attributed to residential real property, and specifically permit any interested parties to obtain better insight into the collateral and validate the data that is attributed to the underlying intrinsic value of real property through the use of the Consortia Blockchain and Consortia NFT minting process.??The Consortia Alternative Due Diligence data sets, in this specific use case enhance the data recipients ability to understand the true value of the underlying collateral of your, or your clients assets.???

Consortia obtains the real property related source data directly from the third party service providers and as part of the minting of the data or image NFT, attesting to the authenticity of the data and/or image by making immutable certain Data, Documentation and Proprietary Images (“DDPI”) from events that occur early in the process of the purchase and sale of residential real estate, that permits reliance on the DDPI integrity throughout the lifecycle of the residential real estate regarding the respective collateralized debt that is attributed to said real property.???This DDPI Alternative Due Diligence Data is used to supplement traditional due diligence practices, enhance asset level or portfolio review,??maximizing the value of the verified, trusted, authentic data within the digitalization of the purchasing and selling real estate and real estate collateralized debt.

Residential Home Inspection Reports (Data and Documentation):

Preserving and making available Residential Real Property Home Inspection Reports by a trusted party.??When validated as true, Residential Home Inspection Reports and the ancillary DDPI is hashed onto the Consortia Blockchain, and Consortia provides the Home Inspection Report DDPI that have not always available to loan originators and loan investors (whole loan or MSR) within the traditional analog origination and due diligence processes.??The integrity of the DDPI is preserved, in a secure immutable format on the Consortia Blockchain, and can be made available or verified via API, by any interested parties seeking Alternative Due Diligence Data to compliment or supplement the limited data they currently have, or are traditionally provided, for continuous validation and verification over the life of the real property or debt, regardless of the homeowner or debt holder.?

Home Listing Photographs (NFT Images):?

Residential real property photographs taken by professional photographers are fantastic and are plentiful, only a few are actually used in a real estate listing and there are many left over that never see the light of day after the listing was created.??The use of these residential real property NFT Images now permit the photographers, whom own the rights to the photographic images that they create, preserve their ownership interest in the photographs and permit others to use (rely) upon them in the future, immutably recording the image as authentic, timestamped, and pegged to a residential real property as a true point in time reference.??Interested parties can access an authentic copy of the image and can materially rely upon the veracity of the image for their intended purpose… to see an authentic representation of a photographic image or an array of photographic images associated with a residential real property at a verified point time.???Mortgage originators, insurers, valuation tools, mortgage servicers, investors, due diligence service providers, portfolio administrators… each may wish to understand what the interior of the real property looked like with significant detail.??With a Consortia Real Property NFT Image, originators, insureres and investors can use to verify, and consider as necessary, that a home has reclaimed hardwood flooring, Calacatta marble kitchen counters, a Meneghini Arredamenti Refrigerator (2021) and a Schonbek chandelier… what does that tell you about the underlying value of the home or the propensity of the homeowner to pay their mortgage????

The use Alternative Due Diligence Data is growing, as automation and technology make historically impractical data available and cost effective.???Tapping into emerging technology to get better, trusted, and verified data to make better decisions to enhance your current due diligence processes in order to reduce your risk, enhance your asset value or liquidation strategy, or distinguish the value proposition of your services from that of your competition is the future.…??whether you are on a trading desk, managing a REO portfolio, or providing technology for due diligence services providers, you can find value in this evolving and growing Consortia Alternative Due Diligence Data Set.??

[i]?Of note, I am an advisor to Consortia.??https://reconsortia.com