The company, founded by the «father» of the securities market, mortgage-backed, announced a partnership with blockchain startup Symbiont with the aim of making changes in the industry of mortgage lending.
Ranieri Solutions was created by Lewis Ranieri (Ranieri Lewis) — a former bond trader of Salomon Brothers, who first began the development and use of securities with mortgage collateral in 1970-ies. Now his company will work with the smart contracts platform Assembly startup Symbiont.
One of the statements last week, Ranieri said that the industry of mortgage lending «continued to fall behind from a technological point of view, working inefficiently, which affects mortgages throughout their life cycle».
«By partnering Ranieri Solutions with a Symbiont, one of the pioneers of the industry of the blockchain — we will be able to introduce this revolutionary technology to guarantee the efficiency, transparency and security on the markets of mortgage loans,» he said.
Mark Smith (Mark Smith), CEO of Symbiont, said in an interview that the mortgage market «is an excellent choice for solutions based on the blockchain». He said: «the market has a lot of different parties» — with reference to banks, borrowers and brokers, as well as companies such as Fannie Mae, Freddie Mac, that will benefit from doing business in a single network.
He also claims that the platform Symbiont allows you to group the mortgage loans in a «very transparent pools that can be securitized». Transparency needed by this market. Securities, mortgage-backed, was accused of provoking a financial crisis at the end of 2000-ies, as «undesirable» status of certain loans were hidden in large opaque pools. These pools has been rated investment grade, despite the hidden risks.
While Ranieri was among those who was to blame, the groundwork for this crisis. However, Smith notes that such practices were in Vogue even before Ranieri was involved in the creation of securities with mortgage collateral.
«This excellent product has turned into a Frankenstein other market participants», — he said.
Smith also noted that the reaction of regulators to the crisis was wrong – they «increased centralization» that have led to the re crisis.
«There had to be a decrease in the concentration due to the decentralization. Blockchain technology and smart contracts are really the first opportunity to introduce decentralization and ensuring the effective work of the traditional markets,» he said.