Can Acre finally crack mortgages on the blockchain?

The idea of putting mortgages on the blockchain is nearly as old as Bitcoin itself. 

The slow, high-value mortgage transaction seems particularly well-suited to a distributed ledger technology which is poorly suited to fast, low-value transactions.

But despite the idea bubbling around since the early 2010s, millions being raised in funding from VCs and from ICOs, and several startups promising to revolutionise the industry… the mortgage application process remains a mire of paperwork, phone calls and waiting.

Enter Acre.

With the backing of £5m from industry heavyweights Aviva and Sesame Bankhall Group, and under the leadership of Justus Brown, the former Head of Product at Brent Hoberman’s Founders Factory, Acre’s pitch is that it will overhaul the existing way mortgages work.

Brown’s company will help traditional mortgage brokers compete against digital mortgage brokers like Trussle and Habito, by creating “one unchangeable ‘record of the transaction’” on the blockchain.

Given its investor, Sesame Bankhall Group (SBG), is the largest intermediary distributor of mortgages and responsible for around 13% of the entire UK mortgage market, and the implication being that SBG will adopt this blockchain technology, Acre says it will become “one of the largest users of blockchain in the UK”.

Speaking to AltFi, the first thing Brown makes clear is that Acre isn’t aiming to transform the industry overnight.

“In the first cut, this is going to look like a better customer management system for brokers, but if you look 2 years ahead… I think this is something the entire industry needs to work together on.”

His example of where blockchain could have transformative changes to the industry would be in something like identity, where at the moment brokers and bank lenders both have to check identities, often with original documents being sent back and forth. 

If Acre’s distributed, trusted ledger were to be adopted by the industry, identity checks could be done once by the broker and then trusted by every other party.

Where other mortgage blockchain startups—Block66, Homeland, Factom—have failed to gain traction, in Brown’s opinion Acre’s advantage is its new investors.

“The ability to firstly take this to market, acquire customers and get volume onto the system, and then shape the conversation around blockchain going forward,” he says.

Indeed, with SBG on board Acre does have the potential to seize marketshare among mortgage brokers and start shaping the future of mortgage broking.

Then again, it wouldn’t be the first startup that’s promised to disrupt a traditional industry with the help of an insider investor.