Loan originator and servicer Sun West Mortgage Co. Inc. has unveiled the latest version of its proprietary artificial-intelligence (AI) platform, called Morgan, which enables the lender to convert pre-approved, property-specific home loans into tradable non-fungible tokens (NFTs).
The NFT is property agnostic, backed by real dollars and guaranteed by Sun West, which is one of the largest nonbank mortgage companies in the country, licensed in 48 states with a network of some 80 retail branches. It puts homebuyers holding the NFT in the position of making an all-cash offer to a home seller, according to the Buena Park, California-based lender.
The blockchain-based Morgan AI platform makes use of Sun West’s TRU Approval loan platform and is powered by its fintech sister company, Celligence.
“What we traditionally call a homebuyer is now a seller of their unique, credit-qualified non-fungible token (NFT),” said Sun West CEO Pavan Agarwal. “If the trade value (the price of the home) is accepted and agreed to by the NFT seller and property owner, the transaction is openly recorded.
“To ensure the NFT is traded as agreed, the NFT seller (homebuyer) has two choices. They may close the transaction and transfer the NFT, or if they choose to not honor the trade, they forfeit their earnest money deposit, as customary in any standard real estate purchase.”
The approach creates wider opportunities for both buyers and sellers and empowers both parties to the home sale “to present and accept offers with certainty and without open-ended financing contingencies,” the lender’s announcement of the new NFT loan option states.
Sun West has been testing Morgan’s real-world performance since its recent soft launch. Morgan has reviewed and resolved within two hours some 99% of the thousands of daily loan conditions presented to Sun West, according to the lender. In addition, Sun West said more than 30% of the loan conditions received were reviewed within 30 minutes.
“The result is a 100% success rate in properly underwritten and guaranteed Tru Approval loans,” Sun West states in announcing the launch of the NFT product.
“Since our founding in 1980, the landscape [through] which we obtain a mortgage has changed,” Agarwal said. “The multi-trillion-dollar real estate market is based on countless singular person-to-person transactions.
“It was once wonderfully simple but, over the past decades, has become unnecessarily complex. The invention and mass adoption of blockchain-based technology has brought us a new opportunity to streamline this process, and Morgan is designed to redefine the way we trade real estate while simplifying and correcting this over-complication.”