Biggest US purchase lender pulls plug on crypto payments
United Wholesale Mortgage announced they were no longer offering a crypto payment option. The news comes about a month and a half after they launched a pilot program for digital assets. The second-biggest mortgage lender in the US is not accepting cryptocurrency for home loans.
In August, they announced they would start offering crypto payments to probe demand for this service. They were the first company in the mortgage industry to do so.
United Wholesale Mortgage tried Ethereum, Bitcoin, and Dogecoin, CNBC reported at the time. They also worked with several different borrowers to assess the crypto lending process. Reportedly, just six homeowners took part in the program.
UWM CEO Mat Ishbia said in a press release:
As we said last quarter, we were going to look into accepting cryptocurrency and test it to see if it’s a faster, easier and cheaper solution. Due to the current combination of incremental costs and regulatory uncertainty in the crypto space we’ve concluded we aren’t going to extend beyond a pilot at this time.
In September, the largest wholesale and purchase lender in the country endorsed and accepted the first-ever cryptocurrency mortgage payment in history. In October, they accepted five more cryptocurrency mortgage payments from loan recipients.
UWM tried BTC, ETH, DOGE
The Pontiac, Michigan based company used these payments as a model to improve evaluation of scaling cryptocurrency payments for borrowers. They were listed on the New York Stock Exchange in January after undergoing a merger worth $16.1 billion. This was the valuation for UWM and Gores Holdings IV, a SPEC (special purpose acquisition company), as a combined entity.
No demand for crypto as money replacement
Ultimately, UWM found the demand simply wasn’t there. According to the company’s CEO, borrowers liked the option and “said it was cool”, but it didn’t emerge as a driver for their business. According to analysts, this development proves a lot of crypto community members treat the digital currency as an investment. They don’t see it as something that can actually replace money.
Most investors adhere to HODL principle
Cryptocurrency is rarely used to transact in physical goods although the prices of most coins continue to rise. Most investors seem to be hodling the asset in the hopes that its value will increase. The strategy has paid off for most: Bitcoin’s price has increased fivefold since last year, and Ethereum’s – tenfold.