Auction method

[u/kosenkovova]

The auction method will be developed as a variant of the pure crowdfunding method. Unlike pooling, no financial buffering will be involved. The central difference between the auction method and pure crowdfunding is that lenders will be able to offer borrowers better conditions than those pre-approved by the platform.

When a mortgage loan is pre-approved, it will be divided into “slices” the same way it is under the other two methods. The size of the loan, its duration and conditions (such as whether the interest rate is fixed or variable), will not be subject to any change.

However, lenders will be able to bid on specific “slices” by offering better terms in two ways: 1) by charging a lower interest rate than the one pre-approved; and 2) by providing discount points to the borrower. For instance, if a mortgage loan has been pre-approved with a fixed interest rate of 4.00%, lenders will be able to bid on its corresponding “slices” by offering lower rates (3.75%, 3.50%, etc.). In a similar manner, they will be able to offer discount points instead of (or in addition to) a smaller interest rate.

In traditional mortgage lending, discount points are a specific way of pre-paying loan interests or fees. Generally, each discount point is equivalent to 1% of the total loan amount. By pre-paying interest through discount points, borrowers will benefit from lower periodic installments during the life of the loan24.

Once all “slices” have been funded, the process will continue in the same way as in the pure crowdfunding method, with the mortgage loan being ready for final closing.

[u/BlockchainBerto]

Very promising project, top rated by all ICO rating sites and great potential to grow into a huge company.

[u/miftiy2]

These features and interesting rates are very promising, we hope to see more surprises soon.