Bitcoin-Backed Mortgage Product Launched, Collateral to Be Liquidated After 60 Days of Delinquency

A mortgage product backed by Bitcoin (BTC) has been launched in the United States. If loan payments are 60 days overdue, the collateral BTC may be sold. Better and Coinbase announced on August 26 that this product will be made available to the public. The product structure is "two loans, one monthly payment," where a first-lien mortgage is established on the home based on Fannie Mae standards, and the down payment loan is supported by a second lien on the deposited BTC and the home. Better reflects 40% of the BTC value in the down payment and requires collateral equivalent to 250% of the BTC. The Coinbase Help Center indicated that price fluctuations do not affect mortgage conditions, and if delinquency begins, the collateral BTC may be sold after 60 days. The foreclosure process will start 180 days after delinquency. Applicants must be U.S. residents and must have a verified Coinbase account in good standing with sufficient BTC. Better stated that interest rates could be 0.5 to 1.5 percentage points higher than a standard 30-year fixed mortgage. Coinbase One members will receive up to $10,000 in closing cost credits. Both companies reported that the expected loan volume has exceeded $260 million.

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