Wilmington Trust, the M&T Bank subsidiary, is exploring using blockchain to log mortgage documents that underpin a mortgage backed security, according to the Asset Securitization Report.
The objective is for all parties from the mortgage originator to the mortgage backed security (MBS) investor, to be able to access the originating mortgage documents and to verify they haven’t been changed.
In the case of false representations and warranties, it should change who bears the loss in default. “If a borrower lies on his application that it’s primary residence but never lives there, then the loan should be bought out by whichever institution originated the loan or owned it and put it into a securitization pool,” said Patrick Tadie, SVP for structured finance at Wilmington.
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