One of the main use cases for decentralized finance (DeFi) has been lending. This typically involves crypto investors using their holdings as collateral to take out a loan to (often) invest in more crypto. This is all done programmatically via smart contracts but it has all seemed far removed from traditional finance. But in April, we had the world’s first real estate transaction conducted via DeFi.
The housing market continues to be hot. There is huge demand for homes of all kinds as many people have decided to move, often as a result of the pandemic. This is good news for real estate lenders, including those offering bridge loans to property investors, as they are seeing record loan demand right now.
The pandemic has touched all niches within lending but there has been a wide disparity on the impact on individual platforms. In the fix and flip lending space originations went to virtually zero fairly quickly and have been slowly climbing the last several months.
The mortgage industry has been through a lot this year. From a liquidity crunch to booming demand to record low rates along with mandatory work from home orders and digital closings. Many mortgage lenders have struggled to adapt to this new normal amid record loan demand.