Decentralized Mortgages are Here! | Ecency

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Financial institutions hold a lot of power.

A bank serves a very simple task: collect money from savers and lend it to the borrowers--debt is the core of financial services. However, most banks, today, exist as corporate entities that incentivize employees to take incredible risks, thereby merging greed into the functionality of the financial system. Debt serves not just enterprises, but also everyday people who do not have the ability to perform the due diligence before taking a loan.

In fact, in many countries, household debt exceeds corporate debt.

The largest portion of household debt is attributed to mortgages. Thus, financial institutions serving mortgages and mortgage derivatives make up a large portion of the financial sector. Corporate greed among the banks also impacts mortgage debt, and a grand yet tragic example of this is the 2008 financial crisis.

Change is Possible

Any bank, especially those focused on providing mortgages, provide people with mortgage loans by having access to savings of other people. This is innately a middleman service, but in the financial sector, the middleman has managed to acquire a greatly disproportionate amount of power.

Blockchain technology is making it possible to remove the middleman in any interaction. A new project aims to leverage this technology to target the mortgage sector.

Viva Network is developing the Fractional Mortgage Share Protocol (FMSP), which is a disruptive debt access solution for the average household. The key function of this project is to allow anyone to tokenize a mortgage into many tokens that anyone can buy.

Viva Network will allow thousands of people to invest in a mortgage by buying its respective Fractional Mortgage Shares (FMS); this protocol decentralizes the mortgage process.

Banks are well-known for providing hefty bonuses to their executives; all this money could have instead provided additional earnings to savers as a form of greater return on their savings, or it could have eased the lives of home owners by reducing the interest on their debt.

By decentralizing the mortgage market, Viva Network pulls power away from financial institutions and distribute among the people. The FMAP removes the high fees paid for a bank's middleman services. Consequently, the platform will allow savers who lend their money to earn greater returns, while also making it possible for borrowers to access cheaper debt.