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Redwood Trust is investing in Liquid Mortgage, a patent-pending startup that provides life-of-loan infrastructure to digitize, track documentation, facilitate payments and record additional information on a blockchain. This is the third investment under Redwood's recently launched RWT Horizons venture investment strategy, according to a press release.
Redwood and Liquid Mortgage share a common vision of utilizing blockchain technology within the current market infrastructure, rather than attempting to reinvent it. According to the companies, they have developed an actionable strategy for achievable and beneficial improvements to targeted elements of the mortgage ecosystem.
They are initially focused on how blockchain can improve certain processes in the non-agency mortgage sector, specifically post-close purchase activities, servicing, securitization, and secondary trading. Redwood and Liquid see an overall value proposition to loan holders that may include lower frictional and transaction costs, increased transparency, and execution certainty, with the option to create unique risk profiles through loan fractionalization.
More about Redwood and Liquid's exploration of blockchain technology for the mortgage industry can be found in a recent White Paper publication titled, "Building A Mortgage Blockchain Ecosystem."