We Make Homeownership Less Risky

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:

  • Inexpensive – average monthly fee of just $19, based on typical $225,000 mortgage.
  • Enhanced Affordability – savings of hundreds monthly utilizing low-down payment without expensive PMI, FHA or a second mortgage, and/or a lower interest rate. (we plan to introduce)
  • Wealth Management – home (largest asset for many) becomes a more stable investment.
  • Mortgage Coverage – mortgage payments will be paid utilizing a homeowner’s positive balance in defined job-loss scenarios.

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.

What Is Home Diversification?

Sounds complicated, but it’s not. Diversification is a proven economic principle that boils down to reducing risk by spreading assets around. Our Home Diversification Agreement, while technically a hedge product and not a traditional diversification product, yields risk reduction benefits that can be compared in some ways to traditional diversification benefits. Dividing eggs among many baskets as opposed to just one is a classic example – they don’t all break when one basket is dropped.

From one basket…

Same holds true in investing, where the average person purchases mutual fund shares (example – an S&P 500 mutual fund) versus buying an individual stock. Given this is the biggest, most concentrated asset for most people, hedging their home price value is critical – not doing so can severely imperil them financially and destroy their net worth.

We leverage hedging techniques to reduce a homeowner’s local market home-value (equity) risk. That risk exists due to the fact that local market housing prices are traditionally 65-percent more volatile (subject to fluctuations – sometimes extreme) than the national housing market price. That value is comparatively more stable (less volatility), given it’s based on prices from communities across the country.

… to many baskets.

By empowering individuals to hedge their home price value against a nationally weighted price index, a homeowner’s risk of value-loss (equity) in their home is substantially reduced. All at a cost of just $19 per month on the typical $225,000 mortgage – about the cost of three to four lattes per month at the local coffee shop.

Home Value Comparison Tool

A failure to hedge 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 the Home Diversification Agreement, 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 Home Diversification Agreement would have actually served you during the past 20-plus years.

1.Enter zip. Ex: 20170. 2. Enter year you bought your home. Ex: 2006. 3. Enter home value as of that year (no commas). Ex: 300000 4. Click GO

Sample Results Explained

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)

(Note - zip code, start date and value we’ve selected are for illustrative purposes only)
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