Our product can deliver inexpensive protection and peace of mind for tens of millions of U.S. homeowners by providing a means to diversify and reduce the PRIMARY RISK to what is often their MOST VALUABLE ASSET – LOSS OF VALUE (equity) in their HOME due to local-market price volatility.
While our focus is homeowners, we serve all the major participants in the residential home finance market by reducing risk and providing tangible benefits – from individuals to lenders, servicers and originators.
This equates to less risk of borrower default (foreclosures), lower origination and servicing costs, increased affordability, the ability to expand loan volume to serve more Americans, and an overall stable home financing market. That’s good for everyone.
Declining home value due to local-market price volatility is a major risk that can hit homeowners at any time. This reduces their net worth and increases their risk of foreclosure and other financial problems. Our product can address and significantly reduce these risks, by as much as 40-percent, respectively. Additional benefits of note:
Beyond the tangible benefits, home diversification will provide homeowners with peace of mind. While hard to measure, the benefits of eliminating anxiety and sleeping well at night are intangible “quality of life” value-adds that homeowners will certainly come to appreciate.
Product provides a reduction in annual servicing cost (2bps or ~$50) per converted loan. They gain a competitive advantage with serviced customers, who surveys indicate want this product. Same holds true for credit partners.
Will benefit from up to 70-percent reduction in credit losses. GSE’s, such as Fannie Mae and Freddie Mac, will advance their mission of enhancing housing affordability (e.g- reduced interest rate or adding stability to the housing finance system) and be able to better meet their mandate of helping expand the homeownership market they serve. They gain a competitive advantage with indirect consumer customers, who surveys indicate want this product.
They stand to benefit from a very substantial increase in first-mortgage volume and market share. And, they also gain a competitive advantage with customers, who surveys indicate want this product.
A failure to diversify one’s home (often the largest asset) can expose a homeowner to home-value risk brought on by volatility (severe price fluctuations) within their local market.
To demonstrate the power and necessity of home diversification, we’ve created a tool incorporating real data that graphically compares local versus national-market home prices over any period dating to 1991.
Try it out using the provided sample and then take it for a spin using your own local market zip code to see how our HDC Agreement would have actually served you during the past 20-plus years.
Graph 1 – National home prices (aqua-colored line) rose more during the 2006 to 2017 period (111%) versus home prices in zip code 20170 (dark blue line), which rose 95% over the same time frame.
Graph 2 – The local market home value (zip code 20170) dropped to $285, 491 from its 2006 value of $300,000.
As a result, If you sold your home in 2017, your HDC Agreement would pay you $47,629. (red line)