Mortgage lender Snap Loan announced the minting of its first seven residential mortgages as non-fungible tokens (NFTs) through its Bacon protocol Platform.
What happened: Bacon Protocol’s NFT mortgages are based on what LoanSnap describes as “smart loans” based on a borrower’s full financial experience. The Costa Mesa, California-based company uses artificial intelligence to determine if a borrower is eligible for a mortgage.
According to a CoinTelegraph report, the interest rate on an NFT mortgage ranges from 1.5% to 3.1%. In comparison, the interest rate on a 30-year fixed-rate mortgage as of Nov. 10 was 2.98%, according to Freddie mac (OTC: FMCC).
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What happens next: The Bacon protocol model is based on the Ethereum (CRYPTO: ETH) blockchain and allows owners to exchange a lien on their property for an NFT which represents a portion of the property’s value. These buyers can use NFT as collateral across the entire DeFi ecosystem. Once the NFT is issued, it is sent to the borrower who will make the mortgage payments directly to Bacon Protocol.
“The mortgage industry is not meant to be replaced, but to rely on new technologies,” said LoanSnap co-founder and CEO. Karl Jacob. “NFTs and smart contracts fit perfectly into the lending world as they are similar to many legal arrangements in real estate, with improved technology and functionality.”
LoanSnap did not disclose the location of the properties with its NFT mortgages or the amount of the loans.
Photo: GotCredit / Flickr Creative Commons