Crypto loan comparison site offers lead-gen opp for lenders

Better and Coinbase's partnership has brought crypto-backed mortgages into the mainstream, but opportunity still remains for lenders who have been slow to embrace digital assets.

Just 8.6% of mortgage inquiries on Sypher Capital Management's Borrow on Bitcoin platform proceeded to a mortgage lender, a significant decline from the 29.6% recorded on general bitcoin-backed loan searches. This represents a gap mortgage providers could fill.

"We've been trying to talk to mortgage lenders about taking a more prominent role in the space, providing us with more real-time information, and there are many that are interested," Michael Song, co-founder of Borrow on Bitcoin, told National Mortgage News. "The lender that really grabs the bull by the horns will, at least on our website, and especially on the internet in general, put themselves in a pole position."

READ MORE: Better closed first Fannie-supported loan backed by Bitcoin

Sypher announced the public launch of its new independent comparison site for bitcoin-backed loans and mortgages last week. The company aims to provide more continuity to a fragmented sector of lending and be a vehicle for lenders to inform users on their offerings, similar to the services Bankrate and LendingTree provide, Song said.

"It's a good initiative to help consumers at least look at" crypto-backed mortgages, Josip Rupena, founder and CEO of crypto mortgage lender Milo, told National Mortgage News. But Rupena is still skeptical of its immediate impact on the market, given the current rate environment.

The company shared additional early data from May 14 through Aug. 17, which showed borrowers researching bitcoin-backed mortgages requested an average of $317,023, more than three times the $104,289 average requested for general bitcoin-backed loans. The median mortgage request was $250,000, according to a press release. Borrow on Bitcoin also recorded $74.2 million in requested loan volume, representing roughly 4,099 Bitcoin of collateral.

Better and Coinbase's partnership has been a driving force behind Borrow on Bitcoin's development and digital assets in the mortgage space as a whole. 

READ MORE: Crypto-backed mortgages test risk and reward for lenders

General availability for Better and Coinbase's token-backed mortgage product opened Aug. 12, when the company had about $260 million in projected loan volume on its waitlist. Most of the borrowers on the waitlist said they plan to buy a home within the next six months, not immediately, but the expected volume remains the same, a Better spokesperson told National Mortgage News.

"When you have name-brand entities, whether its Better or Coinbase, putting a lot of product market development behind this, and then especially a player like Fannie Mae, it really helps validate the thesis that Bitcoin is an asset that's here to stay and can be used in the most typical loan in America, which is the home mortgage," Song said.