Factom Harmony Takes On the Mortgage Industry

Factom Harmony Takes On the Mortgage Industry

Already working with the Department of Homeland Security and the Bill & Melinda Gates Foundation to secure records on their blockchain, Factom has now set its sights on the trillion-dollar mortgage industry. Having launched its new Factom Harmony solution in March, the company hopes to attract big banks and host their sensitive mortgage data. By increasing the efficiency of document management, Harmony will allow a seamless transaction process between lenders and brokers, without them having to worry about lost documents, altered agreements or incomplete records.

Built on the Factom Apollo data management solution, which allows users to store and create immutable digital records, Harmony “works with existing imaging or document management solutions to create secure, transparent, unalterable records for final loan documents.” In the process, every file is secured within a blockchain container, locking in the order of the final documentation, recording each person who accesses files and rejecting duplicate documents.

Factom refers to this system as “a perfected digital audit vault” for each specific loan. Thus the core product behind Factom Harmony is called Digital Vault, which locks into time the most important closing documents and gives a complete history of every file from origination to close.

As an all-inclusive solution, Factom Harmony

  • creates a permanent record and index of final loan documents, making audits smooth by reducing quality control, due diligence and review time;

  • reduces costs by creating a single source that organizes the final documentation and provides cryptographic truth that each document is an authentic copy;

  • provides access control to multiple parties that can collaborate under audit conditions and exceptions, and includes an immutable audit trail of all actions on each document in real-time, giving a true history of every loan;

  • opens a secure audit room or due diligence deal room that can be tracked on the Factom blockchain.

According to Peter Kirby, CEO of Factom Inc., “The Harmony solution and the underlying Factom blockchain provide lenders with something that was fundamentally missing from the industry. With Harmony, a lender is able to create a final set of documents for each closed loan.”

Right now, origination of a loan has underlying costs of about $7,500 per loan — up from approximately $2,500 per loan in 2006. The costs have tripled over the last few years as banks have been forced to step up their efforts to be in compliance with new laws.

Factom Harmony addresses many of the redundancy issues associated with these efforts by permanently documenting the process from the moment documents are first created, and then allowing that data to be quickly shared and verified digitally. Having digital records that can be securely shared and verified also speeds up financial institutions’ ability to settle transaction among themselves. Factom does not claim to move money faster, but it does attempt to allow others to have the confidence in the data they are reviewing and thus speed up the processes.

According to Factom, Harmony is the first practical and effective deployment of blockchain technology in the mortgage industry. Through combining blockchain technology, advanced cryptography tools and a digital fingerprint for each document or data file, lenders can securely store and expose individual loan files or documents to various third parties.

“This technology dramatically changes the approach and reduces the costs for audits, third-party reviews, litigation costs and due diligence costs,” Jason Nadeau, executive vice president of Factom, said in a statement. “The combination of blockchain and digital signature technology within Factom’s solution creates a solution where the benefits of digital signatures and electronic vaulting are now available for all documents without having to deploy any eMortgage or eClosing technology.”

Toni Moss is the founder and CEO of AmeriCatalyst LLC, an advisory firm located in Austin, Texas, specializing in corporate strategy, business development, market intelligence and market positioning for companies engaged in all sectors of the residential real-estate and housing finance industry in the North American market. Moss has advised clients including Citigroup, Goldman Sachs, Deutsche Bank, the European Commission and the Kingdom of Saudi Arabia. Well-known in the U.S. mortgage industry, she is a big fan of Factom Harmony, and had this to say about the blockchain-based solution:

“The industry remains disparate and fractured with regard to the acquisition, management, distribution and protection of data, with a wide variety of third-party providers, proprietary platforms and programming languages. It’s just a matter of time before mortgage data is aggregated into a secure and centralized industry utility — and blockchain [technology] is the most promising catalyst to enable it,” Moss said to Bitcoin Magazine.

“As data becomes more plentiful, accurate, accessible and immutable, investors will have the confidence to return to the mortgage market; processing, servicing and transactional costs (should) decrease; and the market itself will be far more secure and sustainable in the long-term.”

Factom has yet to announce any contracts or partnerships related to its mortgage solution, but the time is right for big banks to start utilizing blockchain technology. In a separate recent development for the company, the Factom blockchain was made accessible to Chinese developers through WanCloud, a product released by Wanxiang Blockchain Corporation to drive progress among Chinese enterprises.

The post Factom Harmony Takes On the Mortgage Industry appeared first on Bitcoin Magazine.

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The Lost Records of Shantou: A Case for Blockchain Tokenization

shantou

In the Guangdong Province of China, Shantou was once a flourishing port city where European traders had their businesses and homes. In the early 1900s, they built a brand new central district near the river in Shantou with consulate buildings, apartments, bars and restaurants. It was a spectacular mix of Victorian English and classical Chinese styles and soon became a mainstay and provincial destination.

The Old Central District in Shantou

Over the years, however, Shantou lost its status as a top commercial hub, as bigger ports emerged in nearby Shenzhen and Guangzhou. As foreign traders left the city, the central district fell into a state of disrepair. Without the once thriving businesses, the local Chinese owners couldn’t maintain their own buildings and, as generations passed, descendants of the owners moved to newer parts of town.

Today, Shantou’s old central district is a dismal, rundown slum. You can still see the charm in the vintage architecture, but facades are falling to the ground and walls are crumbling. As random tourists stroll the lanes taking photographs, they wonder why the owners haven’t paid for renovations or sold the buildings to new owners who could fix them up.

Now Just an Empty Street of Crumbling Buildings 

With No Ownership Rights, Nothing Can Be Restored

汕头2.jpg

Once a Popular Hotel in Old Shantou

Meanwhile, just north of Shantou, Chaozhou has a newly restored and booming old city, with shops, guesthouses, restaurants and people spending money. In other parts of China, old villages and districts like this one have been restored, drawing business owners, locals and domestic tourists.

chaozhou.jpeg   

Gates To The Restored Old City of Chaozhou, Shantou’s Neighbor to the North

Because Chaozhou is a prefecture-level city, the government intervened to restore the streets and buildings. But in Shantou, there have been no renovations because no one in the city knows who owns the hopeless buildings: the deeds to the properties are nowhere to be found. If the deeds still existed, the buildings would be fixed, business owners would move in, and again it would become a busy district of the city. Eventually, just like in Chaozhou, the government will have to intervene with public funds.

But today, with the advent of the blockchain, technology can solve this age-old problem in Shantou. With the digitization (or tokenization) of assets, there will never be a need to keep a deed or piece of paper as records can be safely kept forever on the blockchain.

A Homegrown Solution

Based in Shanghai, Antshares is a Chinese blockchain led by developer Erik Zhang, who has studied Bitcoin and Ethereum, and believes China needs its own, homegrown blockchain solution. Having built Antshares as an open-source protocol, Zhang hopes that people in his country will soon be building apps and digitizing their assets with his technology. And by tokenizing real-world assets such as stock certificates, cars, homes and even people, Zhang believes he can help prevent what happened in old Shantou from happening again in the future.

Bitcoin Magazine interviewed Mr. Zhang about his plans for the tokenization of assets on the Antshares blockchain to find out how it works and what major changes it will bring to the world around us.


Bitcoin Magazine: How will the digitization or tokenization of assets work?

Erik Zhang: We usually divide digital assets into two categories, one for voucher assets and the other for credit assets. Digitizing a voucher asset means that we digitize contracts or licenses, such as the transfer agreement of a company’s equity, stock certificates, a real estate license and so on.

A credit asset refers to the creation of a new digital asset and guaranteeing it as redeemable for a real physical asset in real terms. This can be done with an ounce of gold (or any quantity), a car, a Picasso painting, or as you mentioned, a home. It means creating a digital token that represents ownership of a physical asset, which can be bought, sold, transferred or stored in a secure manner.

BM: How is a digital token created?

EZ: Well, the answer is rather technical and perhaps boring for the average reader. But to do so on Antshares, for example, we would:

  1. Create a numeric identity on the blockchain which can be implemented through a digital certificate. The digital certificate exists on the blockchain with a public key or address;

  2. Use a private key of the digital certificate to register the commitment of the asset;

  3. Safeguard the digital certificate and digital signature on the blockchain;

  4. Allow other people to verify a digital identity through the digital certificate, and confirm the issuer/owner of the asset.

Once an asset is digitized, it can be transferred and traded on the blockchain, and there will be advanced operations that can be performed using smart contracts.

BM: So, in essence, what does this do?

EZ: Basically it records and protects data in a way that can’t be altered or transferred without the owner’s explicit consent. Consent, in these cases, will require a digital signature that can be verified on the blockchain. So if you have tokenized your home, for example, then your legal ownership of the home will be recorded by a digital “token,” and the fact of your ownership can only be changed or transferred when you have provided your private key (password).

In the case of Shantou, or anywhere else for that matter, this will also make it so that lost deeds will never result in such a public dilemma. Records of property ownership will never be lost, destroyed, falsely altered or transferred without consent.

BM: And what will we do with the tokens?

EZ: As far as securing our digital assets, advancements are being made in digital wallet technology so that we can safely store our digital assets. When you want to sell your property, then to complete the sale, you can transfer your token to the new owner digitally on the blockchain.

BM: So, in theory, anything can be tokenized. Do you think that someday we will tokenize ourselves?

EZ: (Laughs) Sure. I believe we will see birth certificates, marriage certificates, diplomas… and entire digital identities on the blockchain. In fact, digital identities are necessary for this whole ecosystem to work. Today, we use so many different types of personal identification: passports, ID cards, driver’s licenses, credit scores. With digital ID’s, people can build a single, comprehensive reputation on the blockchain which can be securely protected and used in any digital transaction. Tokenizing ourselves is a very important part of the future of blockchain technology.

BM: What kind of changes will this bring to the world?

EZ: Well, that is a big question with many implications. But in the case we see here, it will preserve the integrity of data and prevent the loss of ownership rights, such as we see in the case of Shantou. It will also have an impact on the environment as it will almost entirely eliminate the need for paperwork. But again, the implications of blockchain technology are so far-reaching that no one really knows of all the changes it will bring. We have many exciting ideas about it, but for the answer, we will have to wait and see.

BM: When will Antshares begin doing this?

EZ: Over the last year, we have made great progress with our core technology. This can be seen with the recent upgrades to our Antshares core wallet and our code updates on Github. We are a small, dedicated and talented team, and we will be working hard to build a community around our open-source platform. You will be seeing a lot of exciting news from Antshares in the near future.


Read more about other blockchain solutions for land and title registry around the world:

The post The Lost Records of Shantou: A Case for Blockchain Tokenization appeared first on Bitcoin Magazine.

Continue reading…

 

The Lost Records of Shantou: A Case for Blockchain Tokenization

shantou

In the Guangdong Province of China, Shantou was once a flourishing port city where European traders had their businesses and homes. In the early 1900s, they built a brand new central district near the river in Shantou with consulate buildings, apartments, bars and restaurants. It was a spectacular mix of Victorian English and classical Chinese styles and soon became a mainstay and provincial destination.

The Old Central District in Shantou

Over the years, however, Shantou lost its status as a top commercial hub, as bigger ports emerged in nearby Shenzhen and Guangzhou. As foreign traders left the city, the central district fell into a state of disrepair. Without the once thriving businesses, the local Chinese owners couldn’t maintain their own buildings and, as generations passed, descendants of the owners moved to newer parts of town.

Today, Shantou’s old central district is a dismal, rundown slum. You can still see the charm in the vintage architecture, but facades are falling to the ground and walls are crumbling. As random tourists stroll the lanes taking photographs, they wonder why the owners haven’t paid for renovations or sold the buildings to new owners who could fix them up.

Now Just an Empty Street of Crumbling Buildings 

With No Ownership Rights, Nothing Can Be Restored

汕头2.jpg

Once a Popular Hotel in Old Shantou

Meanwhile, just north of Shantou, Chaozhou has a newly restored and booming old city, with shops, guesthouses, restaurants and people spending money. In other parts of China, old villages and districts like this one have been restored, drawing business owners, locals and domestic tourists.

chaozhou.jpeg   

Gates To The Restored Old City of Chaozhou, Shantou’s Neighbor to the North

Because Chaozhou is a prefecture-level city, the government intervened to restore the streets and buildings. But in Shantou, there have been no renovations because no one in the city knows who owns the hopeless buildings: the deeds to the properties are nowhere to be found. If the deeds still existed, the buildings would be fixed, business owners would move in, and again it would become a busy district of the city. Eventually, just like in Chaozhou, the government will have to intervene with public funds.

But today, with the advent of the blockchain, technology can solve this age-old problem in Shantou. With the digitization (or tokenization) of assets, there will never be a need to keep a deed or piece of paper as records can be safely kept forever on the blockchain.

A Homegrown Solution

Based in Shanghai, Antshares is a Chinese blockchain led by developer Erik Zhang, who has studied Bitcoin and Ethereum, and believes China needs its own, homegrown blockchain solution. Having built Antshares as an open-source protocol, Zhang hopes that people in his country will soon be building apps and digitizing their assets with his technology. And by tokenizing real-world assets such as stock certificates, cars, homes and even people, Zhang believes he can help prevent what happened in old Shantou from happening again in the future.

Bitcoin Magazine interviewed Mr. Zhang about his plans for the tokenization of assets on the Antshares blockchain to find out how it works and what major changes it will bring to the world around us.


Bitcoin Magazine: How will the digitization or tokenization of assets work?

Erik Zhang: We usually divide digital assets into two categories, one for voucher assets and the other for credit assets. Digitizing a voucher asset means that we digitize contracts or licenses, such as the transfer agreement of a company’s equity, stock certificates, a real estate license and so on.

A credit asset refers to the creation of a new digital asset and guaranteeing it as redeemable for a real physical asset in real terms. This can be done with an ounce of gold (or any quantity), a car, a Picasso painting, or as you mentioned, a home. It means creating a digital token that represents ownership of a physical asset, which can be bought, sold, transferred or stored in a secure manner.

BM: How is a digital token created?

EZ: Well, the answer is rather technical and perhaps boring for the average reader. But to do so on Antshares, for example, we would:

  1. Create a numeric identity on the blockchain which can be implemented through a digital certificate. The digital certificate exists on the blockchain with a public key or address;

  2. Use a private key of the digital certificate to register the commitment of the asset;

  3. Safeguard the digital certificate and digital signature on the blockchain;

  4. Allow other people to verify a digital identity through the digital certificate, and confirm the issuer/owner of the asset.

Once an asset is digitized, it can be transferred and traded on the blockchain, and there will be advanced operations that can be performed using smart contracts.

BM: So, in essence, what does this do?

EZ: Basically it records and protects data in a way that can’t be altered or transferred without the owner’s explicit consent. Consent, in these cases, will require a digital signature that can be verified on the blockchain. So if you have tokenized your home, for example, then your legal ownership of the home will be recorded by a digital “token,” and the fact of your ownership can only be changed or transferred when you have provided your private key (password).

In the case of Shantou, or anywhere else for that matter, this will also make it so that lost deeds will never result in such a public dilemma. Records of property ownership will never be lost, destroyed, falsely altered or transferred without consent.

BM: And what will we do with the tokens?

EZ: As far as securing our digital assets, advancements are being made in digital wallet technology so that we can safely store our digital assets. When you want to sell your property, then to complete the sale, you can transfer your token to the new owner digitally on the blockchain.

BM: So, in theory, anything can be tokenized. Do you think that someday we will tokenize ourselves?

EZ: (Laughs) Sure. I believe we will see birth certificates, marriage certificates, diplomas… and entire digital identities on the blockchain. In fact, digital identities are necessary for this whole ecosystem to work. Today, we use so many different types of personal identification: passports, ID cards, driver’s licenses, credit scores. With digital ID’s, people can build a single, comprehensive reputation on the blockchain which can be securely protected and used in any digital transaction. Tokenizing ourselves is a very important part of the future of blockchain technology.

BM: What kind of changes will this bring to the world?

EZ: Well, that is a big question with many implications. But in the case we see here, it will preserve the integrity of data and prevent the loss of ownership rights, such as we see in the case of Shantou. It will also have an impact on the environment as it will almost entirely eliminate the need for paperwork. But again, the implications of blockchain technology are so far-reaching that no one really knows of all the changes it will bring. We have many exciting ideas about it, but for the answer, we will have to wait and see.

BM: When will Antshares begin doing this?

EZ: Over the last year, we have made great progress with our core technology. This can be seen with the recent upgrades to our Antshares core wallet and our code updates on Github. We are a small, dedicated and talented team, and we will be working hard to build a community around our open-source platform. You will be seeing a lot of exciting news from Antshares in the near future.


Read more about other blockchain solutions for land and title registry around the world:

The post The Lost Records of Shantou: A Case for Blockchain Tokenization appeared first on Bitcoin Magazine.

Continue reading…