Fannie Mae challenge

What it does

To understand mbs’ lets go behind the scenes on what happens. As you can see in this diagram, you can see that there is a person. Lets say that he wants to buy a house for 500,000 dollars but only has $200,000. This means he has to go to the bank to get a $300,000 loan. The bank gives him three hundred thousand at a 15 year, $1715 a month loan agreement. This number includes a 3% interest rate. Now the bank needs three hundred thousand dollars to give out so they go to Fannie Mae to get that money. Fannie Mae then gets money from an investor. Then Fannie Mae gives the bank the money and expects an extra payment from the bank so that they make a profit on the transaction. Now the person pays the bank the $1715 which takes a small portion of that money to make a profit and then passes on the majority of the money to pay back fannie mae. Then Fannie Mae will take the money and give most of it to the investor and will take some of it for themselves. In this system that we use today, it seems that everybody is happy because everyone gets what they want and/or recieves a small commission for their work. Unfortunately, what happens behind the behind the scenes is that the federal reserve is profiting off of every transaction and is taking away from the money that these banks could make. Another downfall of the system is that the period of time that it takes to complete these transactions can range from 30-60 days, which is incredibly innefficient in as fast-paced of a world we live in today. The final and most grave of all is that if there was every a terrorist attack of some sort on the federal reserve, the entire system would crumble because all the documentation has to be approved by the Feds. Without them there is nothing.

The benefits for moving to the blockchain are large. It would also make a lot of sense as cryptocurrency is growing in popularity by the hour. We recently saw some of the potential of cryptocurrency with the spike in bitcoin. Although haters may say that the bitcoin spike would show the reason on why we shouldn’t invest such a vital system of the economy into an unstable market, I find that bitcoin had to fall in order to remain constant, it was a simply market destabilization. Even with the spike and drop in price, bitcoin still added 8 thousand dollars in value over the course of 5 short months. The benefits would be that every aspect of the system would be making more money and the person taking the loan would potentially be paying lower interest rates. This change over would also spur the cryptocurrency economy as miners would be processing hundreds of thousands of more algorithims and would make a lot more cryptocurrency due to it. This new system would involve all of the same moving parts but in the more secure and more advanced system of blockchain.


How we built it

With Solidity. Tried and failed to make a working UI

Challenges we ran into

The really weird UI language (and making it in Java before realizing there was a premade platform for blockchains)

Accomplishments that we're proud of

Finishing it (except for the UI)

What we learned

Javascript to us are subjunctive semi-deponent verb forms to a 1st year Latin student

What's next for Mortgage Smart

A working UI

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