He
then

directed

Fannie
Mae
and

Freddie
Mac
to
“consider
only
cryptocurrency
assets
that
can
be
evidenced
and
stored
on
a
U.S.-regulated
centralized
exchange
subject
to
all
applicable
laws.”
Cryptocurrencies
under
consideration
would
not
need
to
be
converted
to
U.S.
dollars,
Pulte
said.

The
signatories
on
this
week’s
letter
include
include
Sens.
Jeff
Merkley
(D-Ore.),

Elizabeth
Warren
(D-Mass.),
Chris
Van
Hollen
(D-Md.),
Mazie
Hirono
(D-Hawaii)
and
Bernie
Sanders
(I-Vt.).

“Expanding
underwriting
criteria
to
include
the
consideration
of
unconverted
cryptocurrency
assets
could
pose
risks
to
the
stability
of
the
housing
market
and
the
financial
system,”
the
lawmakers
wrote.

Proponents
of
crypto-backed
mortgages
argue
that
digital
assets
could
expand
access
to
credit
for
borrowers
who
struggle
to
qualify
based
on
traditional
income
or
credit
metrics.
But
critics
warn
of
the

risks
tied
to
the
volatility
of
crypto
assets,
especially
in
scenarios
where
rapid
price
declines
trigger
margin
calls
—
forcing
borrowers
to
post
additional
collateral.

“To
the
extent
that
historical
volatility
and
liquidity
persists
even
as
the
market
matures,
a
borrower
using
crypto
faces
an
increased
risk
that
they
may
not
be
able
to
exit
a
crypto
position
and
convert
to
cash
at
a
price
that
would
allow
them
to
buffer
against
risk
of
mortgage
default,”
the
senators
wrote.

They
also
emphasized
the
security
concerns.
Crypto
is
subject
to
risks
of
“loss
due
to
scams,
cyber
hacks,
or
physical
theft,
which
could
leave
homeowners
vulnerable
to
losing
their
crypto
assets
with
little
hope
of
recovery,”
the
lawmakers
added.

Companies
that
currently
offer
crypto-backed
mortgages
include
Miami-based


Milo
and
Toronto-based
lending
platform


Ledn.
There
is
also


Figure,
led
by
former


SoFi
CEO
Mike
Cagney,
and


Moon
Mortgage.

The
senators
also
raised
ethical
and
governance
concerns,
pointing
to
a
potential
conflict
of
interest
between
Pulte’s
role
as
FHFA
director
and
his
position
as
chair
of
the
boards
of

Fannie and Freddie.

“While
the
legality
of
your
appointment
as
Chair
of
the
Boards
is
still
in
question,
there
also
appears
to
be
a
serious
conflict
between
your
ability
to
order
and
approve
the
Enterprises’
proposals
as
FHFA
Director
and
to
ultimately
influence
the
development
of
such
proposals
as
Chair
of
the
Enterprises’
boards,”
the
letter
stated.