The CEO and founder of an online mortgage platform has revealed that the fintech is looking into how it can utilise blockchain to make the home loan contract process more efficient.
Speaking at the Informa Credit Law Conference, Mandeep Sodhi, the CEO of HashChing, revealed that the platform was looking into the distributed ledger technology for mortgages.
When asked by The Adviser what HashChing was using blockchain for, Mr Sodhi said: “We have been exploring blockchain in the home loan contract, smart contract space and securitisation as well.
“It’s more in the future road map but mostly around how quickly can we exchange a contract, through smart contracts. But also, if you decide to come on with a loan product at a later stage (of course, we’ll distribute it through brokers only), but then, how quickly can you settle that loan as well and securitisation? That’s where blockchain plays a really important role, if you need a securitised [loans] done quickly.”
He concluded: “Start-ups are tapping into AI technology, through Amazon Alexa, Google. It's where banks are lagging, but start-ups are moving fast. That’s what banks need to think about.”
Bank couldn’t beat broker rate
Looking back at the journey of HashChing, Mr Sodhi stated that the idea first came about in 2014, after he found that a major bank, at which he worked, could not match or beat a broker-secured home loan rate.
Speaking at the Informa Credit Law Conference, Mr Sodhi said that he had gotten his mortgage through the bank at a discounted employee rate, but later found that one of his friends had gotten a lower rate for his mortgage at the same bank.
He said: “I was a loyal banker looking for my first home loan and I reached out and said: 'Hey, can I get my staff discount?' And my bank said that they could give me the special staff discount rate.
“I told my friend, Atul Narang (the co-founder of HashChing), about securing this great rate on my home loan and asked him: 'Why don’t you become a banking man?' And he said: 'Well, actually, I’ve secured a better rate than you, also at your bank.' And that left a bad taste in my mouth. So, I took his letter to the bank and asked how he got a better rate and asked them to match it, or at least beat it, because it’s really embarrassing. And they said: 'We can’t do that.' When I asked why, they said it was because he had used a mortgage broker.
“Now, I didn’t think that mattered… I worked for the bank. But they said: 'We can’t match mortgage brokers' rates.'”
It was after this “frustrating experience” that Mr Sodhi said he tried to find the same rate on comparison sites and then through a broker, but still couldn’t (he reportedly didn’t use Mr Atul’s broker due to geographical barriers).
Mr Sodhi continued: “There are thousands of people searching for good home loan rates every day on home loan comparison sites, who are clueless, just like I was. And that’s when we decided to start HashChing — where the journey starts with a negotiated rate that the broker secures from the lender.”
He went on to tell delegates that the majority of fintech start-ups come to market because of “frustrations with the banking system”.
“They’ve seen this opportunity, tried to change it in banking, but have been shut down — and that happened to me as well, so we decided to take it on ourselves.”
Mr Sodhi said that the HashChing platform, which launched in 2015, now has 679 brokers on the platform helping 23,959 borrowers apply for more than $12 billion of loans through more than 60 lenders.