The ability to store all the numerous paper documents that need to be exchanged between players on a distributed network, which is safer than the existing process, is what DLT brings to the table.
Fremont, CA: The existing mortgage lending process is well-established. It often takes time and involves the confirmation of evidence by several third parties. And it adds time and cost to each step of the process.
There is vast potential for distributed ledger technology (DLT)-blockchain-to simplify and offer better mortgage lending protection. Ultimately, lenders' extensive adoption of DLT could dramatically reduce costs while providing safe transaction records and computer-age settlement times.
The ability to store all the numerous paper documents that need to be exchanged between players on a distributed network, which is safer than the existing process, is what DLT brings to the table. With current steps in the process that usually takes weeks to achieve it in a matter of seconds, the data will be simpler to access. This sort of network of interconnected knowledge will make certain intermediaries obsolete in the current system.
There are a number of ways blockchain could benefit lenders, allowing them to improve the mortgage process. These are:
Quicker Verifications:
Since all parties use the same "document," each step in the process will proceed more rapidly and freely and with a validated moment in time when changes are made.
Reduced Access Costs:
No single service provider can own information in the blockchain, and thus, fees for accessing information will not add costs to the process. Documentation will still be obtained rapidly and efficiently if entities closed down.
Prevention of Documents Accumulation:
Ultimately, quicker verification of changes would reduce paperwork accumulation, not only minimizing the potential for mistakes to crawl into the paper trail but also reducing the need for physical and digital long-term storage of records.
Transparent Audit Trail:
First of all, DLT is safe and, by its very nature, produces a clear audit trail. Each block incorporated to the chain is an open overview of a data point, which prevents the opportunity for fraud and manipulation of information. Errors can be rectified with subsequent blocks. While access to parts of the chain that satisfy privacy concerns can be filtered, the block itself is permanent and can still be read at a future date.
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