The second-largest mortgage lender in the United States, United Wholesale Mortgage (UWM), stopped accepting payments in cryptocurrency six weeks after the launch of the corresponding program. Among the reasons, the company cited regulatory uncertainty and related costs.
Thus, in mid-August, UWM announced that it would allow customers to pay mortgage fees using Bitcoin (BTC). The company wanted to study and test the new tool to determine if it was a faster, simpler, and cheaper solution.
“Thanks to our technology team, these transactions were successful. Due to additional costs and regulatory uncertainty in the field of cryptocurrencies, we have come to the conclusion that at the moment we are not ready to go beyond the pilot program,” the new press release says.
UWM also stressed that testing experience allowed the organization to prepare for the introduction of digital assets. The company will re-integrate Bitcoin payments when “transactions with cryptocurrencies become something that contributes to business development.”
In addition, according to CNBC, as part of the pilot program, UWM accepted six cryptocurrency transactions. And also tested three assets – Bitcoin, Dogecoin (DOGE) and Ethereum (ETH). Moreover, in a conversation with the TV channel, the lender’s president and CEO Mat Ishbia noted; that there was no significant demand for such a service among customers.
Since the Internal Revenue Service (IRS) classifies cryptocurrencies like Bitcoin as property; some participants in the experiment may be presented with tax bills for payments made in digital assets.
Resuming the project in the future
The company announced its plans in conjunction with UWM’s Q2 financial results. Which showed a net profit of approximately $140 million. UWM had not yet released its third-quarter results at the time of writing.
“Many people don’t realize that whenever they pay with cryptocurrency for a cup of coffee or other consumer goods, the action is classified as capital gains”. Explained the head of CoinTracker’s tax strategy department Shehan Chandrasekera.
If enough borrowers show interest, UWM may resume the project in the future.