Re: Using Bitcoin as down payment funds to purchase a new home with a mortgage...
Hey guys...I am in the mortgage banking industry. I am currently working on a deal to incorporate bitcoin into the down payment funds for a new purchase home loan.
I haven't seen this done before. Have any of you? I have seen homes sell for 100% bitcoin, but that is the same as purchasing a home with cash.
We are in contact with Fannie Mae, and it looks like it can be done as long as the bitcoins are first converted into US dollars and then deposited into a US bank account. If you know banking guidelines, then you know that most money has to be seasoned for 60 days before it can be used for down payment funds. We may be able to get around this if you can clearly be able to source the ownership of the bitcoins and clearly document the sale of the bitcoins along with the deposit into your bank account (like with a coinbase transaction history).
Do any of you have experience with this, or would you like to hear how it works out?
I haven't seen this done before. Have any of you? I have seen homes sell for 100% bitcoin, but that is the same as purchasing a home with cash.
We are in contact with Fannie Mae, and it looks like it can be done as long as the bitcoins are first converted into US dollars and then deposited into a US bank account. If you know banking guidelines, then you know that most money has to be seasoned for 60 days before it can be used for down payment funds. We may be able to get around this if you can clearly be able to source the ownership of the bitcoins and clearly document the sale of the bitcoins along with the deposit into your bank account (like with a coinbase transaction history).
Do any of you have experience with this, or would you like to hear how it works out?
You are talking about mortgages and you say you are in the mortgage banking business. You should know it better than us. It won't work. Because not a single bank in the world would accept a highly volatile asset as mortgage payments. We are talking about 10 to 30 years at least. If bitcoin becomes too valuable, the dude who owes money won't afford to buy them probably goes bust. If bitcoin loses value, bank gets fucked.
Nope. Won't work.
I am a mortgage bank, I have also been in the industry 15 years. I don't think you are understanding how the bitcoin would be used. The bitcoin would be sold via coinbase, and then those USD would be used for down payment. Generally with down payment funds all non-payroll deposits into your bank account would have to be sourced, which is when the bitcoin deposit would be noticed and disqualified from "usable down payment funds."
We as the bank would not be holding bitcoin at all...we would be using proceeds from the sale of bitcoin.
This is not a bitcoin issue then. It is a money laundering issue.
Coinbase/Tax guys are gonna question the customer to death and will make him mad with their questions. Bitcoin has a big reputation among cyber terrorists/drug dealers/tax evaders.Whoever was trying to make a down payment for his mortgage via coianbase is going to hate to be alive and probably won't succeed.
Since you are talking about coinbase, i assume you live in USA right? If so, it will be just like i expected. Forget it.
It's not money laundering when you are using your own coins/money. Coinbase doesn't question why you are selling your bitcoin. Down payment will come from their personal bank account. Some of the funds in that bank account will come from Coinbase, the majority of the funds will have already been in the account.
If you have purchased a home in the last 2-3 years and obtained financing, you would know what I'm talking about when it comes to sourcing down payment funds. We are talking about the down payment, not monthly mortgage payments.