• Weiss Ratings issued an alert about the dangers of crypto-mortgages.
• Milo is a Miami-based startup that specializes in digital baking.
• Another concern raised by the firm includes Milo’s larger plan to pool crypto-backed home loans and offer them as bonds to asset managers and insurance companies.

Weiss Ratings, an American ratings and research agency, issued warnings about crypto-mortgages. This warning comes amid the current economic environment in America.

One of the companies that the firm placed a spotlight on is Milo – a digital banking startup based in Miami that offers 30-year mortgages backed by cryptos such as (BTC) and (ETH). As collateral, stablecoins may also be used. Milo provides loan rates between 3.93% – 5.95% and zero down payments.

Jon Markman from Weiss released a May 3 report in which he warned against crypto-backed mortgages. He also cited the poor performance of stocks and crypto this year, as well as a US housing bubble, rising interest rates, and the Federal Reserve’s upcoming policy changes in the report.

The report stated “The product seems to be like a win-win, assuming real estate and crypto prices keep rising … except there are signs both bets are unlikely to be winners in the near term. Bitcoin is off by 40% since it reached $66,000 in November 2021.”

Another concern that was raised by the analyst is Milo’s “larger plan to pool crypto-backed home loans and offer them as bonds to asset managers and insurance companies,” and likened it to behavior similar to that which resulted in the 2009 housing market crash.

Markman said, however, not all crypto risk was bad and that it will probably be the same in the property sector. This is before he added that “no matter what the markets are doing, the potential to succeed in cryptocurrencies is real.”

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